Small businesses inoperable after fraud by payroll company

On Behalf of | Sep 13, 2019 | White Collar Offenses |

When businesses in Tennessee entrust aspects of their operation to a third-party, they often have specific reasons for doing so. They may be looking to streamline their processes, reduce busywork or expedite the efficiency with which they operate. However, they must rely on these third-party entities to uphold their portion of the agreement in order for everything to continue to function seamlessly. 

For a handful of small businesses throughout the nation, a payroll company’s deceiving decision to steal money from their clients in a classic case of fraud has left many of the small businesses scrambling for solutions. According to investigators, the dishonesty came to light when a direct deposit company recognized that the payroll firm had transferred an alarming $26 million into their personal account. When questioned, it was discovered that other, similar, transfers had taken place in the past. 

The discoveries led to the payroll company being shutdown indefinitely without any prior notice. Several of the firm’s customers are now scrambling to figure out their next steps as nearly 250,000 employees across the affected companies are now without a paycheck. The Federal Bureau of Investigation is now involved in the case and is conducting an investigation into whether or not there have been more discrepancies against the firm’s clients. Currently, some of the businesses that have been impacted are at a temporary standstill as they are working to reestablish payroll structures. One company expressed disbelief as a situation of this magnitude was never something that they anticipated. 

If people have been involved in white-collar crime and are beginning to see just how serious their actions were, they may wish to work with an attorney to minimize the impact their choices have on their life and career. With the proper time and commitment, people may have a chance of recovering from the mistakes they made. 

Source: Fox News, “FBI investigates payroll company accused of stiffing $35M from small businesses,” Barnini Chakraborty, Sept. 12, 2019