Mypayrollhr case spawns 2 more probes

IRS, Financial Services look into bank fraud as Mann awaits sentence

The Internal Revenue Service and the state Department of Financial Services are investigating the Mypayrollhr bank fraud case as the Clifton Park firm’s CEO, Michael Mann, awaits sentencing after pleading guilty to 12 felonies last month.

It is unclear which aspects of the case that the IRS and DFS are looking into. The DFS regulated the now-defunct firm, which shut down a year ago as bank executives uncovered Mann’s decade-long fraud, estimated at more than $100 million.

Mann not only defrauded several banks out of millions of dollars in loans using faked financial documents, but he also diverted client payroll money and tax payments to his own accounts in an attempt to keep his banks from uncovering the scheme.

An attorney for one of Mann’s companies, Southwestern Payroll in Tulsa, Okla., revealed the twin investigations in a separate civil court case against Pioneer Bank, which had extended a $42 million line of credit to Mann’s various companies just weeks before the fraud was uncovered.

Southwest Payroll’s attorney, Andrew Jayne, declined to reveal what the investigations were about when contacted Tuesday by the Times Union. Neither the IRS nor the DFS responded to requests for comment.

Shortly after Mypayrollhr collapsed last September, Gov. Andrew Cuomo ordered the DFS to investigate Mann and Mypayrollhr. It is unclear how far along the agency is in its investigation.

Mann faces anywhere from 17 to 32 years in federal prison under sentencing guidelines, although his attorney Michael Koenig will argue for a much shorter time.

Mann will also be ordered to pay $101 million in restitution to his victims.

Mann pleaded guilty Aug. 12 to

12 charges, including bank fraud, wire fraud, identity theft and filing false tax records, as part of an agreement with federal prosecutors. The 50-year-old Edinburg man agreed to waive his right to have the case presented to a grand jury.

Mann is scheduled to be sentenced in December in federal court in Albany.