Payroll company accused of diverting $35M from employee accounts

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NEW YORK (CBS) The FBI is investigating a payroll company that abruptly shut down, leaving more than 250,000 employees across the country without paychecks.

New York state-based My Payroll HR allegedly diverted about $35 million from employee checks and accounts. It left many accounts with negative balances and employers scrambling to pay workers.

"It hurts. This isn't something that we were prepared for," Tanya Willis said.

Willis says her animal rescue shelter is nearly at a standstill after her payroll company abruptly shut down.

"All of their phone lines were down and all of their social media accounts were wiped off," she said.

Last week, some of Willis' employees called frantically after finding recently deposited paychecks just vanished from their accounts.

"Between all of the employees, there was over a million-thirteen-thousand-dollars deducted between eight checking accounts," Willis said.

The Associated Press says Willis is one of about 5,000 business owners scrambling to pay workers after a company that worked with My Payroll HR diverted an estimated $35 million from employee accounts. Some accounts had multiple withdrawals, leaving many employees with negative balances.

Willis says one of her employee's accounts was overdrafted nearly $1 million.

"She had less than a thousand dollars in that account, so we want to know how is that even possible?" Willis asked.

My Payroll HR and its CEO, Michael Mann, haven't returned calls to CBS News, but Cachet Financial Services, a company that worked for My Payroll HR, claims it is a victim of fraud by the company and that Mann or someone at My Payroll HR manipulated account numbers and moved workers' money into a personal account.

Willis' shelter rescues about 200 dogs a year, but she can't take in any more until they get the money back to fund it.

"I hope there's a better answer other than somebody intentionally stole money and ran away with it," Willis said. "I hope there's a better answer."

The FBI is asking for more potential victims to come forward.