U.S. District Judge Lawrence E. Kahn on Wednesday sentenced the former chief executive officer of MyPayrollHR's parent company to 12 years in prison for running a bank fraud scheme that caused more than $100 million in losses and misappropriating millions of dollars entrusted to payroll companies he owned, the U.S. Department of Justice announced.

Michael T. Mann, 51, also must pay $101,038,793 in restitution to victims, forfeit more than $14.5 million and 30,000 common shares of Pioneer Bancorp that were seized by the government and serve three years of supervised release, according to the U.S. Attorney's Office and Federal Bureau of Investigation (FBI).

“Today’s sentence holds Michael Mann accountable for his despicable crimes," Acting U.S. Attorney Antoinette T. Bacon said. "This case should be a deterrent to businesspeople who would seek to lie, cheat and steal their way to success.”

Mann operated ValueWise Corporation in Clifton Park, as well as MyPayrollHR.com LLC and other subsidiary companies. Last August, he pleaded guilty to conspiracy to commit wire fraud, aggravated identity theft, nine counts of bank fraud and one count of filing a false tax return.

Prosecutors say Mann admitted to engaging in a fraudulent scheme to deceive banks and financing companies into loaning his companies tens of millions of dollars from 2013 to September 2019. Unable to repay the loans, he expanded the fraud by stealing and diverting millions of dollars that were entrusted to his payroll companies, and engaging in the daily kiting of millions of dollars among bank accounts he controlled, according to Bacon and Janeen DiGuiseppi, special agent in charge of the Albany FBI Field Office.

Mann’s scheme collapsed late in the summer of 2019, when one bank froze his accounts, setting off a chain of events that left his payroll companies unable to process payroll and tax payments for hundreds of small business customers nationwide.

"He played a dangerously deceitful game with the paychecks of thousands of hard-working Americans trying to make an honest living," DiGuiseppi said. "Not only were thousands of employees impacted, but some small business owners lost their livelihoods when they went out of business due to Mann’s criminal scheme."

Mann is the first person to be sentenced in connection with the case.

A co-conspirator, former Optum employee Luke E. Steiner, 33, of Minneapolis, Minnesota, pleaded guilty in February 2020 to conspiring with Mann to defraud two financing companies out of millions of dollars, prosecutors said.