Mann was arraigned before the Honorable James A. Murphy, III in Saratoga County Court on a felony complaint and entered a plea of guilty to Money Laundering in the First Degree, a class B felony. Mann faces up to 8 to 24 years in state prison.
As part of his global resolution with the New York State Attorney General’s Office and the United States Attorney’s Office for the Northern District of New York, Mann will be ordered to pay over $100 million in restitution to his victims, including distribution of over $47 million to Mann’s victims at the time of his federal sentencing on December 10, 2020. The Attorney General requests that all clients defrauded by Mann and his entities who have not yet been made whole contact the New York State Police Financial Crimes Unit by email at FCU@troopers.ny.gov.
“As Michael Mann spun his widespread web of deceit, employees and employers throughout the state of New York paid the price,” said Attorney General James. “This conviction serves as a clear reminder for all those who attempt to steal money for financial gain: My office will continue to be relentless in the pursuit of anyone who takes advantage of New York’s people and businesses. I thank the state police for their partnership in bringing accountability and justice to this intricate scheme.”
“Michael Mann put greed ahead of his customers, developing a scheme that ultimately put employers out of business and left employees without paychecks,” said State Police Superintendent Keith M. Corlett. “I commend the Attorney General and her office for their partnership on this case. We have zero tolerance for those who break the law and enrich themselves at the expense of others.”
Today’s conviction is the result of a year-long investigation conducted by the Attorney General’s Office in conjunction with the New York State Police, with assistance from the New York State Department of Labor and New York State Department of Financial Services. The joint investigation, captioned “Operation: ValueWise, Dollar Foolish” revealed that Mann engaged in a sophisticated money laundering scheme over the course of three years in order to defraud employers, employees, financial institutions, and financing companies out of tens of millions of dollars.
Mann owned or operated over a dozen entities, including payroll service companies such as ValueWise Corporation and MyPayrollHR.com, LLC, which were primarily based in Clifton Park, Saratoga County, New York. As part of his guilty plea, Mann admitted that from at least January 2016 to September 2019, he laundered monies embezzled from these payroll companies by diverting the stolen monies through numerous business accounts he controlled. He committed this fraud in an effort to repay millions of dollars in fraudulently obtained loans and in an effort to continue defrauding employers, financial institutions, and financing companies by stealing additional funds. In September of 2019, one of Mann’s banks became suspicious and froze a number of his accounts, ultimately exposing his fraudulent conduct. Hundreds of businesses that entrusted their payroll to Mann’s entities, along with thousands of employees, were left in the lurch. Some businesses were forced to cease operations as a result. In August 2019, over 800 employers paid over $28 million in payroll that Mann diverted for his own benefit. This money was intended for employees, including those working at ambulance corps, health care providers, religious institutions, pre-schools, restaurants, and hotels.
According to statements by the prosecution and documents filed in Saratoga County Court, Mann laundered over a billion dollars in the month leading up to the collapse of his scheme, and admitted similar conduct dating back to January 2016. An audit of over 35 accounts controlled by Mann revealed he conducted hundreds of transactions on a near-daily basis in order to move stolen funds through shell and shelf companies, in addition to legitimate or quasi-legitimate businesses he ran, in order to continue his criminal activity and fraudulently obtain millions of dollars from employers, financial institutions, and financing companies. Several so-called shell companies provided Mann with a vehicle for business transactions without having any significant legitimate assets or operations. Shelf companies are entities that are created and left with no business activity, and subsequently used at a later point in time without the need to go through the procedures of creating a new entity.
Mann’s plea today resolves additional crimes uncovered by the Attorney General’s Investigation, for which the defendant could have been charged, including Grand Larceny, Falsifying Business Records and Scheme to Defraud, related to Mann’s role as an owner and operator of various businesses, including: ValueWise Corporation d/b/a Apogee, d/b/a Optix Consulting, d/b/a Primacy Search Group and d/b/a Lincoln Academy; MyPayrollHR, LLC a/k/a MyPayrollHR.com LLC; Cloud Payroll, LLC; Pro Data Payroll Services, Inc.; Southwestern Payroll Service, Inc.; Ross Personnel Consultants, Inc.; Weitz & Associates, Inc.; Viverant, LLC; Kaningo, LLC; Hire Flux Holdings, LLC; TrueConsulting Corp.; TrueHR, LLC; Create Force, LLC; Always Live Holdings; Heutmaker Business Advisors, LLC; and FocalPointe Group, LLC. These crimes include:
- Stealing payroll funds held in trust for client employers in order to fraudulently inflate company assets and to repay stolen funds from other clients;
- Providing materially false information and/or concealed material information in order to secure millions of dollars in commercial financing;
- Providing fictitious invoices to financial institutions to fraudulently inflate assets as collateral for his entities and to repay stolen funds from client employers; and
- Wrongfully withholding millions of dollars from at least two Automated Clearing Houses (“ACH”) by redirecting ACH payments to accounts controlled by Mann.
On December 17, Mann is expected to be sentenced to a minimum of 5 to 15 years and a maximum of 8 to 24 years in state prison. As part of a parallel investigation by the United States Attorney’s Office for the Northern District of New York, Mann previously pleaded guilty on August 12, 2020 in the United States District Court for the Northern District of New York 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.
The Attorney General thanks New York State Police and the Financial Crimes Unit for their invaluable assistance investigating this case. The Attorney General also thanks the New York State Department of Labor and Department of Financial Services for their assistance on this case.
This case is being prosecuted as part of Attorney General James’ Combatting Upstate Financial Frauds and Schemes (“CUFFS”) Initiative, led by Director Philip V. Apruzzese, an Assistant Attorney General in the Criminal Enforcement and Financial Crimes Bureau. The CUFFS Initiative was implemented by Attorney General James in an effort to assist local law enforcement and District Attorney’s Offices in the investigation and prosecution of complex financial crimes and money laundering cases.