FBI Launches Fraud Investigation After Payroll Provider Closes

A payroll service provider is under investigation for possible fraud by the FBI and New York state agencies after closing unexpectedly, cutting off about $35 million in wage-payment transactions to its clients and leaving employees with negative bank balances from withdrawn direct deposits.

MyPayrollHR of Clifton Park, N.Y., and its parent company, ValueWise Corp., are under criminal investigation, the FBI said in a statement. The payroll-service provider, which conducted business across the country, abruptly ceased operations about Sept. 5, the agency said.

MyPayrollHR, with about 4,000 clients, allegedly diverted about $35 million in wage and tax payments from accounts, ...