The FBI and the New York State Department of Labor are investigating allegations that a payroll company has transferred millions of dollars of employees to their own bank account, officials said Thursday.
An FBI spokesman confirmed the investigation following the inauguration of Albany, New York, office tweeted that it "was about information from business owners who may be suffering financial losses from the alleged activity of MyPayrollHR and its affiliates have suffered ".
A spokesman for the US Department of Labor MyPayrollHR, based in Clifton Park, New York, apparently closed operations last week after direct-in-payment company Cachet Financial Services claimed it had diverted up to $ 26 million in small business paychecks on one of his bank accounts. Cachet handles direct deposit transactions for numerous payroll companies.
Last week, MyPayrollHR told customers on the KrebsonSecurity website that "we can no longer handle further payroll transactions."
In some cases In some cases, small business employees did not receive regular direct paychecks at the end of August, and their normal salary was debited twice from their accounts. The second withdrawal was the result of a technical bug that has since been resolved, said Wendy Slavkin, General Counsel of Cachet did not respond to a request for comment.
Olivia Braund, who works for marketing for the Shafran Realty Group in Carlsbad, California, told her that she had received a text message from Chase Bank after informing on pay day that the exact amount was in her account Expired from her usual check.
Her boss, Alan Shafran, was kind enough to cover the amount, she said, adding that she soon realized the entire office had the same experience.
Chase reversed the allegations, Braund said, and she paid her boss, but she eventually opened a new account to make sure it did not happen again.
"It was one of those things where all the crawling answers," she said. "We now have a new payroll company."
About 4,000 companies using MyPayrollHR were affected by the situation, Slavkin said.
The incident occurred just before the Labor Day weekend, when MyPayrollHR, which has been working with Cachet for about 12 years, provided the usual data files for the last employee pay period, she said.
The files would normally place employer's funds on an Employee Benefit Account, but the codes were changed, diverting the funds to an account at Pioneer Bank controlled by MyPayrollHR, Slavkin said.
Before the diversion was caught, Cachet had made direct payments to employees of companies using MyPayrollHR, she said. But the money was not there.
Cachet did not realize exactly what the problem was and tried to reverse the Pioneers' deposit. On 4 September, however, he found that the account had been blocked.
Reverse direct payments to employees, but after the company found that the original request contained the wrong code, it made a second request, Slavkin said.
Both requests were accepted, which led some workers to find that they not only did not get paid, but twice their normal salary was cut from their accounts, she said.
Cachet has worked with the workers' banks to correct the chargebacks and will cover the paychecks until they can recover funds from the Pioneer Bank or MyPayrollHR.
Basically, it's Cachet's money used to pay thousands of employees across the country, "said Slavkin.
The company also introduces new protocols that would prevent external parties from redirecting funds.
19659002] It's not clear what's going to happen I deposited money with the Pioneer Bank, a spokesman for the institute referred NBC News to a US Securities and Exchange Commission that filed $ 19 million of deposits Wednesday and "potentially
"The company is working with relevant law enforcement agencies on this matter," the SEC said in the report.
The FBI has already heard of potential victims across the country, an agent said Ministry of Labor oversees the investigation and is ready to help, said a spokesman.
Michael Kosnar and Jay Varela contributed.