From New York to Florida and now Memphis, thousands of employees are trying to get out of red after their paychecks essentially vanished from their accounts.
This all started when a New York-based payroll processing company called Mypayrollhr.com abruptly shut down last week.
The aftermath left thousands in limbo as they try to get their money back.
FOX13 talked exclusively with one of the companies in Memphis that was affected by this closure.
Less than a week after Ben Green got paid by Homeaway Construction, he got an alert from his bank.
It said he was in the negatives for more than a thousand dollars
“I was really distraught at first. I didn’t know how I was going to pay my bills,” said Green.
Green is one of the thousands of people nationwide who had their direct deposits reversed not once but twice in the same week.
The payroll processing, Mypayrollhr.com out of New York, didn't give employers an explanation for the sudden closure.
Green said his job received this email from the company:
“We still don’t understand why this happened or how it happened,” said Green.
FOX13's Kirstin Garriss called mypayrollhr.com three times and emailed them. FOX13 even reached out to its parent company, Valuewise but we didn't get a response from any of them.
Cachet Financial Services was contracted by Mypayrollhr to complete the direct deposits for the company's client employers but Cachet's general counsel told FOX13 that didn't happen this time around.
"Money that we take out of the employers account didn't go into our settlement accounts that we control it was diverted into a Mypayrollhr account," said Wendy Slavkin, Cachet Financial Services general counsel. "Cachet funded the payroll for these employers and consequently paid these thousands of employees that they have no relationship without of their own pocket."
Now Slavkin said Cachet is out $26 million and Mypayrollhr owes them because of the payroll fiasco.
Slavkin said they’ve contracted the 100 banks involved and asked them to release those funds so employees can get paid.
Green said his account is still frozen, but he’s out of the red.
He said his boss took money from his account and wrote paper checks for his employees, so they could get back on their feet.
"It's disheartening to know that somebody is able to you know electronically reach back into your employee's pockets and take the money out that they have rightfully earned," said Rowdy Legg, owner of Homeway Construction.
The FBI’s Albany Bureau is investigating what happened. The agency tweeted out a message asking businesses affected by this payroll fiasco to email them.
Better Business Bureau of Upstate New York has received a spike in consumer complaints regarding mypayrollhr.com, a Clifton Park, NY based payroll processing business. BBB said please file any complaints with them at BBB.org/complaint and with the NYS Attorney General's office at 518-474-7124 or online at ag.ny.gov.
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