NY Payroll Company Vanishes With $35 Million

MyPayrollHR, a now defunct cloud-based payroll processing firm based in upstate New York, abruptly ceased operations this past week after stiffing employees at thousands of companies. The ongoing debacle, which allegedly involves malfeasance on the part of the payroll company’s CEO, resulted in countless people having money drained from their bank accounts and has left nearly $35 million worth of payroll and tax payments in legal limbo. Unlike many stories here about cloud service providers being extorted by hackers for ransomware payouts, this snafu appears to have been something of an inside job.

Nevertheless, it is a story worth telling, in part because much of the media coverage of this incident so far has been somewhat disjointed, but also because it should serve as a warning to other payroll providers about how quickly and massively things can go wrong when a trusted partner unexpectedly turns rogue. Clifton Park, NY-based MyPayrollHR — a subsidiary of ValueWise Corp. — disclosed last week in a rather unceremonious message to some 4,000 clients that it would be shutting its virtual doors and that companies which relied upon it to process payroll payments should kindly look elsewhere for such services going forward.

Source: krebsonsecurity.com