Prosecutors seek 22 years in prison for Mann in $ 101 million pay fraud
ALBANY – Prosecutors are calling on a federal judge to send Michael T. Mann to jail for 22 years when the perpetrator of one of the biggest financial fraud schemes in Capital Region history appears in court on Wednesday him to be condemned.
Mann’s defense attorney, on the other hand, asks the judge to deviate from guidelines that provide for 21.5 to 26.5 years in prison, and instead sentences the Edinburgh resident to just a few years behind bars, with a recommendation for a minimum security institution.
For about six years, Mann and his companies maintained a Ponzi scheme through lies, fraud and flying checks, the sums snowballing to the point where it was moving millions of dollars a day when Bank of America and then Pioneer Bank froze its accounts in late August and early September 2019.
As a result, wage funds sent to Mann’s Clifton Park-based MyPayrollHR by hundreds of small and medium-sized businesses evaporated, leaving thousands of workers unpaid, panicked and furious.
Mann pleaded guilty negotiated in August 2020 to aggravated identity theft, bank fraud, filing a false tax return and conspiring to commit wire fraud.
He is due to be sentenced Wednesday morning by US District Court Judge Lawrence Kahn in Albany.
Immediately following his federal conviction, Mann will be sentenced on state charges in Saratoga County Court to five to 15 years and eight to 24 years in prison, to be served concurrently with his federal sentence.
Total damage is estimated at $ 101 million. Lawyers who are prosecuting and defending Mann have both said he did not have the money to make the restitution that should be ordered as part of his sentence.
Defense attorney Michael Koenig and the United States Attorney’s Office for the Northern District of New York submitted sentencing notes last week that paint two different portraits of Mann on the verge of making recommendations very different sentences.
Koenig – who calls his client “Michael” in his memorandum – begins with a strong emphasis on his client’s extraordinary and timely cooperation with investigators and his guilty plea on August 12, 2020.
Koenig also states:
- Mann voluntarily asked his lawyer to contact the authorities just days after his scheme collapsed and, at the resulting meeting, provided detailed information on what he had done; he did so without any promise of clemency and he authorized the search of all his electronic devices without a warrant.
- “Draconian” sentencing guidelines are unduly harsh and punitive and do not take into account all of the circumstances.
- Mann is a first-time offender and, without attempting to downplay his misconduct, has accepted responsibility and shown remorse, Koenig wrote.
- His cooperation and guilty pleas in state and federal courts spared state and federal governments the need for investigations that would have taken years and cost millions.
- Mann has also cooperated fully with the parties in the numerous civil suits that have been filed over the past 22 months.
- A more lenient sentence than the guidelines require would send a positive message to other criminals about voluntary cessation of their actions and cooperation with prosecutors.
- Kahn should follow the precedent of judges who strayed from sentencing guidelines – one citing “the utter parody of justice that sometimes results from the fetishism of directives with abstract arithmetic ”- and give Mann a prison sentence modeled on the 42, 60 and 84 months of sentences handed down for equally egregious financial crimes.
- Mann was a charitable and caring person prior to his arrest, has continued to live productively since his arrest, and has returned wherever possible; he can never make any other compensation if he is convicted under federal directives.
- Mann should be allowed to report to jail in late September or early October, to give him time to sort out his personal affairs, and the judge should recommend a minimum-security prison for him.
The US attorney’s office takes a different spin on the same set of facts.
In his memorandum, he begins with a description of what happened to one of Mann’s hundreds of victims: a New Hampshire restaurant owner who had to leave her dying mother’s bedside to face non-payment of his employees because Mann’s accounts were frozen.
She ultimately spent $ 30,000 of her own savings to replace her employees’ missing wages and payroll taxes, leaving her with no financial cushion when COVID-19 hit six months later and caused her business to shut down.
In support of their recommendation, the prosecutors’ note also states:
- Mann had the mentality of a riverboat player, trying to recoup his losses with ever bigger bets, but playing with other people’s money instead of his own.
- Mann was spending hours a day managing his project and always trying to work it out when he collapsed; he thought he could make it work if he could keep it going for another year or two, an idea he called misguided in retrospect.
- Mann’s decision to immediately confess to authorities when his scheme imploded saved the government months of investigative and litigation work; however, it was not a sign of honesty but of desperation after his accounts were frozen and all other options were gone. An admission even two weeks earlier could have avoided tens of millions of dollars in losses for hundreds of corporate customers and thousands of their employees.
- Federal guidelines call for 24 months in jail for the identity theft charge, to be served consecutively after 235 to 293 months for the remaining 11 counts to which Mann pleaded guilty.
- Kahn is expected to order Mann to serve 264 months in prison followed by 36 months of supervised release and order $ 101,038,793.31 in restitution to the victims.
- Letters from victims to court span hundreds of pages. A victim attempted suicide after the destruction of his business. Others speak of massive layoffs, panic that a missing payday causes in those living on paychecks, death threats from employees and even embezzlement of money used to care for sick and abused animals. in an animal shelter.
- Mann has no hope of being able to reimburse his victims for their financial losses, nor for subsequent expenses such as loss of income and legal and accountant fees; there is also no way to reimburse them for their stress and anxiety.
- A 264-month sentence would protect Mann’s public and serve as a deterrent to the many other payroll companies operating in a lightly regulated industry.
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