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The CEO of a New York payroll company was arrested and charged on Monday for a $ 70 million banking fraud scheme that left hundreds of small businesses across the country in shambles, federal officials said. .
Michael Mann, 49, has reportedly obtained millions of dollars in bank loans and lines of credit over the past decade, to the benefit of dummy corporations, the New York District District Attorney General said in a statement. a statement.
Mann was the CEO of MyPayrollHR, a payroll company that shut down on Sept. 5 after Mann's suspected fraud banks froze its accounts, authorities said.
Authorities said the company was managing the payroll of about 1,000 companies in the United States.
The owner of one of them, a Southern California real estate company, told NBC San Diego earlier this month that he was "panicking" after the sudden closure of MyPayrollHR.
Alan Shafran, owner of the Shafran Realty group, told the chain that his company's 15 employees were receiving their paychecks as usual – and that their money was gone from their bank accounts. He then received a notice from the Mann company stating that he needed to find a new payroll processor.
Shafran paid his employees himself, he told the station, although the money was also withdrawn after the banks froze Mann's accounts.
The Federal Bureau of Investigation has created a web page for companies losing money in alleged fraud, while Governor Andrew Cuomo has called on the state's financial services department to investigate and provide responses to victims.
"It's not how we work in New York," he said.
Mann did not plead Monday, said his lawyer, Michael Koenig, at NBC News.
Koenig said in a statement that Mann had voluntarily met with federal prosecutors and cooperated with the authorities "to detail thoroughly and accurately what had happened".
Mann faces a prison term of up to 30 years, a fine of up to $ 1 million and five years of post-release supervision, officials said.
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