ALBANY – Pioneer Bank of Colonie may be the biggest loser in Michael Mann’s $101 million bank fraud scheme that landed the mysterious Clifton Park payroll company owner in federal prison last fall to serve a 12-year sentence.
Not only did Pioneer lose roughly $35 million in the elaborate scam, but the bank has also had to defend itself from an onslaught of expensive civil litigation filed by former clients and customers of Mann seeking millions of dollars in payroll tax deductions that Mann deposited with Pioneer just before his scheme unraveled following Labor Day weekend 2019.
Mann owned several payroll services companies, including MyPayrollHR and Southwestern Payroll Services, that became embroiled in his downfall. He was diverting payroll deductions from his clients for his own use at various times.
One of the plaintiffs in those civil cases is the U.S. Department of Justice, which claims Pioneer is withholding $7 million in payroll taxes from Mann clients that are due to the IRS
Pioneer has denied any wrongdoing, arguing it was within its rights to seize roughly $16 million in deposits Mann had with the bank to cover nearly $19 million in overdrafts from Mann’s various accounts with the bank.
There also is an investigation by the state Department of Financial Services, one the most powerful regulatory agencies in New York.
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