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NY Payroll Company Vanishes With $35 Million

posted by Fnord666 on Friday September 13 2019, @10:56AM   
from the who-needs-a-payroll dept.

upstart writes:

Submitted via IRC for SoyCow2718

NY Payroll Company Vanishes With $35 Million

This communique came after employees at companies that depend on MyPayrollHR to receive direct deposits of their bi-weekly payroll payments discovered their bank accounts were instead debited for the amounts they would normally expect to accrue in a given pay period.

To make matters worse, many of those employees found their accounts had been dinged for two payroll periods — a month’s worth of wages —leaving their bank accounts dangerously in the red.

The remainder of this post is a deep-dive into what we know so far about what transpired, and how such an occurrence might be prevented in the future for other payroll processing firms.

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Original Submission

• Bigger problems. (Score: 0) by Anonymous Coward on Saturday September 14 2019, @02:14AM

  by Anonymous Coward on Saturday September 14 2019, @02:14AM (#893954)

  The ability to cancel a mistaken deposit isn't necessarily a bad thing if there are reasonable limits and basic fraud protection. There are much bigger problems here. From the article I read yesterday:
  
  1) MPHR used a faked authorization to transfer payroll funds from the employers to an account they controlled instead of the authorized escrow company's account.
  2) They then payed the employees from this account.
  3) They then issued chargebacks against the employees multiple times. In once case they charged back $1,000,000 against a single paystub.
  4) They then emptied their fake escrow account and walked.
  
  1 made the scam possible in the first place. 3 meant they were able to steal far more than what the employers were taken for. Both indicate major problems in the underlying banking system.

  Parent