ALBANY — An associate of MyPayrollHR CEO Michael Mann pleaded guilty Wednesday to a charge of conspiracy to commit wire fraud, admitting he worked with Mann to defraud two finance companies out of nearly $13 million during a six-year long scheme, according to federal prosecutors.
Court documents in the case against Luke Steiner, 31, give new insight into how Mann allegedly orchestrated a years-long, multi-million-dollar bank fraud scheme that ultimately led to the collapse of his Clifton Park payroll company. Authorities said Steiner admitted that between 2013 and 2019, he helped Mann “and others known and unknown” conspire to fraudulently obtain millions of dollars in loans for Mann’s companies.
Mann has not yet entered a plea to the bank fraud charge he faces. So far, Mann and Steiner are the only people the government has publicly accused of taking part in the scheme.
Assistant U.S. Attorney Michael Barnett of the Northern District of New York declined to comment when asked whether the reference to other individuals in the announcement about Steiner’s plea indicated additional charges could be filed against more people connected to the collapse of Mann’s company.
Steiner, of Minneapolis, was an employee of Optum, a division of UnitedHealth Group Inc. One of Mann’s companies, ValueWise Corp., performed consulting services for Optum and UnitedHealth until about May 2017.
While ValueWise and Optum had a business relationship, Mann allegedly orchestrated the scheme by falsely claiming that some of his other companies, including FocalPointe Group, LLC, and Weitz & Associates, Inc., were owed money by Optum.
“The object of the conspiracy was to fraudulently obtain millions of dollars in loans from financing companies … by falsely representing that fictitious invoices from companies owned and controlled by Mann were legitimate and payable by Optum/(UnitedHealth),” authorities wrote in court documents.
Prosecutors said Steiner, acting in his role as an employee of Optum, “regularly represented to the financing companies that the false invoices submitted by Mann were due and payable by Optum/UHG, when, as Steiner then well knew, the invoices were false.”
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In return for his role in the scheme, authorities said Steiner was paid by Mann in more than $11,000 worth of Amazon gift cards. The two finance companies — one based in New York and the other based in Colorado — were not named by authorities.
The case against Steiner appears to be just one thread of the massive $70 million bank fraud scheme Mann is alleged to have to have committed for at least a decade until early September of last year. Authorities said Mann admitted during an FBI interview that he created several companies with no other purpose than to be used in the fraud, and wrote checks to and from his various bank accounts using money he did not have.
In an attempt to alleviate debts owed to his bank, Mann allegedly poured about $36 million into his personal bank account — funds that his legitimate payroll company, MyPayrollHR, was supposed to disburse to its clients. That decision, authorities claim, was the start of a process that culminated in the company’s collapse, leaving thousands of workers across the country with missing or reversed paychecks.
Mann’s lawyer, Michael Koenig, did not respond to a request for comment Thursday, nor did James C. Knox, Steiner’s lawyer. A message left on Steiner’s cell phone was not returned.
Optum/UnitedHealth said it was cooperating with the investigation, but declined further comment.
In October 2014, Steiner received an email from a representative of one of the bilked finance companies asking for confirmation of a $4.6 million invoice showing payment by one of Mann’s companies to Optum/UnitedHealth.
Minutes later, Steiner forwarded the email to Mann with the message, “FYI.” Mann responded by sending Steiner a fraudulent confirmation message that Steiner pasted into his response to the finance company.
Another email chain showed that Mann was apparently still invested in the scheme just a week before MyPayrollHR’s collapse. On Aug. 27, 2019, Steiner received a message from the same finance company, this time with a $3.6 million invoice from a Mann company to Optum/UnitedHealth. A day later, Steiner alerted Mann about the invoice.
“This looks good,” Mann responded. Steiner then sent an email to the finance company fraudulently confirming the invoice.
Steiner faces a maximum of 20 years in prison and up to three years of supervised release once he’s sentenced by Senior U.S. District Judge Lawrence E. Kahn, authorities said. Steiner is scheduled to be sentenced on May 27.
He’s required to pay a total of $12,986,505.22 to the two finance companies.
He will also be required to forfeit the $11,300 — the same amount he received from Mann in Amazon gift cards.
Read the information federal prosecutors filed against Luke Steiner:
Read Luke Steiner’s plea agreement with federal prosecutors:
Michael.Williams@timesunion.com or 518-454-5018.
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