ValueWise CEO to serve 12 years in prison for $100M fraud

ALBANY, N.Y. >> Michael T. Mann, 51, was sentenced to 12 years in prison for running a complex scheme that caused more than $100 million in losses to banks, financing companies, and other businesses, and also involved his misappropriation of millions of dollars entrusted to payroll companies that he owned.

The announcement was made by Acting United States Attorney Antoinette T. Bacon and Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).

Senior United States District Judge Lawrence E. Kahn also ordered Mann to serve three years of post-imprisonment supervised release, pay restitution to victims in the total amount of $101,038,793.31, and to forfeit assets already seized by the Government, including $14,522,474.90 contained in bank accounts and 30,000 common shares of Pioneer Bancorp Inc.

“Today’s sentence holds Michael Mann accountable for his despicable crimes,” Bacon stated. “For years, instead of growing a legitimate business in Clifton Park, he grew a fraudulent scheme. Mann inflicted major losses on companies that loaned him money. He also stole the paychecks of thousands of hard-working people, and the tax payments of hundreds of small businesses, across the country. Mann caused immense stress for small business owners and fear among employees living paycheck to paycheck, and he justly deserves the term of imprisonment imposed today.”

“Michael Mann’s intricate fraud scheme allowed him to manipulate the system to the tune of $100 million,” DiGuiseppi added. “He played a dangerously deceitful game with the paychecks of thousands of hard-working Americans trying to make an honest living.”

Mann operated ValueWise Corporation, based in Clifton Park, New York, as well as subsidiary companies including MyPayrollHR.com LLC. He admitted that from 2013 to September 2019, he engaged in a fraudulent scheme to deceive banks and financing companies into loaning his companies tens of millions of dollars. Because Mann could not repay the loans with legitimate business revenues, he expanded the fraud, by stealing and diverting millions of dollars that were entrusted to his payroll companies, and engaging in the daily kiting of millions of dollars among bank accounts he controlled.

Mann’s scheme collapsed in late August and early September 2019, when one of his banks froze his accounts, setting off a chain of events that left his payroll companies unable to process payroll and tax payments for hundreds of small business customers nationwide.

On Aug. 12, 2020, Mann pled guilty to one count of conspiracy to commit wire fraud, one count of aggravated identity theft, nine counts of bank fraud, and one count of filing a false tax return

Mann is the first person to be sentenced in connection with this fraud. A co-conspirator, former Optum employee Luke E. Steiner, 33, of Minneapolis, Minnesota, pled guilty in Feb. 2020 to conspiring with Mann to defraud two financing companies out of millions of dollars.

This case was investigated by the FBI, as well as Internal Revenue Service-Criminal Investigation, and was prosecuted by Assistant U.S. Attorneys Michael Barnett and Cyrus P.W. Rieck.