Payroll is essential to running your business. However, payroll fraud can end up costing you big, not to mention hurt the employees who count on you for a living. Unfortunately, unscrupulous types are out there looking to con vulnerable businesses. Below, we will show you how one payroll fraud cost thousands of workers a collective and whopping $35 million.
How the Payroll Fraud Began
The payroll company of MyPayrollHR suddenly abandoned its offices in Clifton Park in New York early in September of this year. It left its approximately 4,000 clients an automated message communicating it was not going to “process any further payroll transactions.” They blamed unforeseen circumstances and advised clients to find alternative payroll options.
It doesn’t sound so bad. You just find other payroll services. But then thousands of workers found they had automatic payroll deposits withdrawn from their accounts. Some of them even found there were multiple unauthorized withdrawals from these accounts. In some instances, many had their bank account balances reduced to $0 or even in the red.
The Reaction
The governor promised to take action and “not allow these bad actors to take money away from the hard-working people.” Pioneer Bancorp became aware of the activity associated with MyPayrollHR. They filed with the SEC as they may be responsible for $16 million of the $36 million it had loaned. This is in addition to $19 million of sketchy deposit activity and potential exposure. They assured the public they have enough capital to cover all expenses. As for the payroll fraud company, they are nowhere to be found, and its CEO is missing.
Read More on The New York Post.
How to Avoid Payroll Fraud
The company seemed legitimate at first but was still relatively unknown. We recommend going with someone who offers payroll services that has been around for a while. You should also chose someone who is local to your area. This way you can feel secure that your payroll is being handled by someone who knows what they are doing, has been doing it for a long time, and can be physically traveled to in a short period of time. We also recommend reading online reviews or asking a trusted business professional who they use for their payroll needs.
Payroll Fraud in Houston
Feel free to contact us if your business needs help with bookkeeping to avoid this and other types of payroll fraud.