“Over the course of just a few years, Michael Mann laundered more than $1 billion on the backs of thousands of employees and businesses in New York and across the nation,” said Attorney General James. “While his unlawful and heartless Ponzi-like scheme left his innocent victims devastated, let this man’s sentence serve as a warning that this kind of mass deception and fraud will not be tolerated. My office remains committed to holding accountable anyone who greedily exploits New Yorkers and sows financial chaos for their personal profit. I thank the state police for their partnership in holding accountable this criminal.”
“Michael Mann put together a fraudulent scheme that had a terrible impact on hundreds of small businesses and thousands of employees nationwide,” said State Police Superintendent Bruen. “I want to thank our members and commend the attorney general and her office for holding Michael Mann accountable for his actions.”
Last August, Attorney General James filed a felony complaint against Mann that detailed his elaborate money laundering scheme. As part of a resolution negotiated by the Office of the Attorney General (OAG) and the U.S. Attorney’s Office for the Northern District of New York, Mann was ordered to pay more than $100 million in restitution to his victims, including distribution of more than $47 million to Mann’s victims at the time of his federal sentencing last year. Earlier today, Mann was sentenced to 12 years in prison for his earlier federal guilty pleas 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. These sentences will run concurrent to each other.
Today’s sentencing is the result of a year-long investigation conducted by the OAG in conjunction with the New York State Police, with assistance from the New York state Department of Labor and the 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 otherwise operated more than 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. Mann admitted during his plea 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 that 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 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 more than $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.
The OAG alleged that Mann laundered more than $1 billion in the month leading up to the collapse of his scheme, and admitted similar conduct dating back to January 2016. An audit of more than 35 accounts controlled by Mann revealed that 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 created and left with no business activity, and subsequently used at a later point in time without the need for overhead costs or the creation of a new company.
Mann’s conviction and sentencing resolve additional crimes uncovered by the OAG investigation for which he 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 trusts 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.
The OAG wishes to thank the New York State Police and its Financial Crimes Unit for their invaluable assistance in investigating this case. The OAG also thanks the New York state Department of Labor and the Department of Financial Services for their assistance on this case.
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