Clifton Park

FBI confirms investigation into Clifton Park payroll company MyPayrollHR

Also Wednesday, Pioneer Bancorp discloses potential loss of millions to federal regulators

CLIFTON PARK — The Federal Bureau of Investigation on Wednesday confirmed via Twitter that it is investigating Clifton Park payroll company MyPayrollHR, which abruptly closed last week.

The FBI’s Albany office early Wednesday afternoon tweeted a request for information from businesses owners “who may have suffered financial loss due to the alleged activity of MyPayrollHR and its affiliates.”

Some payments that had been credited to the employees of companies using MyPayrollHR were reversed late last week, dropping some accounts into a negative balance.

Rich Matthews, executive chef at The Shop, a restaurant in Troy, told The Daily Gazette on Friday that he essentially hadn’t been paid for two weeks’ work. All of The Shop’s nearly 30 employees were impacted by the payroll problems, some seeing their accounts used for direct deposits go into negative balance, Matthews said then.

Matthews said The Shop uses Dalle, a Watervliet-based accounting-services firm, to help manage a handful of financial transactions, and Dalle subcontracted the payroll services out to MyPayrollHR. Matthews said Dalle informed him that MyPayrollHR’s assets had been seized by Pioneer Bank over the past week due to a pending investigation.

On Wednesday, Pioneer Bancorp filed a disclosure with federal regulators about a recent incident involving an unnamed client of its subsidiary Pioneer Bank that might cause losses.

In the 8-K report to the U.S. Securities and Exchange Commission, Pioneer Bancorp said it recently became aware of potentially fraudulent activity in the quarter ending Sept. 30, 2019, by an established business customer of Pioneer Bank.

It did not identify the customer, and said its investigation of the matter was continuing. It said the potential exposure includes a $16 million piece of a $36 million commercial loan to the customer, plus $19 million of deposit activity.

Pioneer Bancorp said it is working with law enforcement agencies in the matter and is pursuing all potential avenues of recovery and reducing the impact of the loss. It also said the company has sufficient capital to absorb the loss, if it can’t be reversed.

Pioneer Bank was founded in 1889 and operates 22 branches across the region, managing more than $1 billion in assets. Pioneer Bancorp, based in Colonie, became a publicly traded company in July. Its most recent 10-Q filing with federal regulators indicates a $4.78 million net income in the quarter ended March 31, 2019.

The FBI provided an email address — [email protected] — and asked those impacted business owners to email contact information, number of employees and the estimated financial impact to the business and its employees.

The U.S. Department of Labor also issued a statement Wednesday on MyPayrollHR:

“The U.S. Department of Labor is aware of the situation in Clifton Park where a payroll service provider has ceased to do business, leaving some workers without their pay. New York State is investigating and responding to this situation. Because of the potential magnitude of the situation, the Wage and Hour Division will continue to monitor the situation and will be prepared to coordinate with our state counterparts should they be unable to resolve the matter expeditiously.”

The payroll company apparently shuttered its offices at 855 Route 146 as of Friday morning, and notified clients in an email Thursday that they would no longer be able to process payroll payments. Calls to the company seeking comment were not answered Thursday or Friday.

The effects of MyPayrollHR’s financial seizure appeared to cascade across the country last Thursday and Friday, as employees and business owners from as far away as Texas joined a Facebook group set up for people impacted by the closure. The Facebook group, called Victims of MyPayrollHR, quickly became a clearinghouse of advice for those impacted by the payroll problems. People purporting to be clients of the payroll company also posted that they were abruptly terminated this week and also were struggling with payment problems.

The problems had been reported to both state and federal law enforcement agencies by Friday afternoon, according to multiple posts on Facebook.

Categories: Business, News, Saratoga County, Schenectady County, Your Niskayuna


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