A Philadelphia homeless shelter and a jewelry store are among the small businesses left with surprise tax bills after an Indiana payroll processor was accused of a multimillion-dollar fraud.
IOI Payroll, also known as Interlogic Outsourcing, took payroll tax money from its clients but failed to forward much of it to the government, according to victims and court records. The shelter’s director, Rachel Falcove, said the nonprofit was out $4,015.49 plus $78.74 in penalties after the Internal Revenue Service demanded payment for taxes that had already been withheld.
“We are a small nonprofit agency, raising most of our funds from foundations and individual donations. This will hit us hard since almost every dollar we raise goes to direct support of vulnerable families,” she said.
Coming Attractions Jewelers, a tenant of the Lehigh Valley Mall, said the company failed to deliver $3,600 owed to its employees. The owner said checks began bouncing last month and that a payroll account ran empty. “IOI stole from me and from the IRS,” he said.
KeyBank sued IOI in federal court on July 9, charging that the company sent more than $120 million in wire transfers without the money to cover them. The Cleveland-based bank’s parent, KeyCorp, put its exposure from the fraud at up to $90 million and later said the overdraft had cost it $123 million.
The FBI has told affected businesses to call 1-800-CALL-FBI or file a tip at tips.fbi.gov. The company’s chief executive has not been seen publicly since the alleged fraud came to light.
Sources
- Philly homeless shelter bilked by IOI Payroll fraud of over $4,000
- Good News Outweighs the Bad for KeyCorp | The Motley Fool
