Employers Scramble After Payroll Company Allegedly Diverts $35 Million From Employees

The FBI is investigating a payroll company that abruptly shut down, leaving more than 250,000 employees across the country without paychecks. New York state-based MyPayrollHR allegedly diverted an estimated $35 million from employee checks and accounts.

MyPayrollHR and its CEO, Michael Mann, haven't returned calls to CBS News. But a business partner for the company, Cachet Financial Services, claims it is a victim of fraud by MyPayrollHR and that Mann or someone at the company manipulated account numbers and moved workers' money into a personal account.

It left many accounts with negative balances, and employers scrambling to pay workers.

"It hurts," Tanya Willis said. "This isn't something that we were prepared for."

Willis says her animal rescue shelter is nearly at a stand-still after the payroll company shut down. 

"All of their phone lines were down and all of their social media accounts were wiped off," Willis said.

Last week, some of Willis' employees frantically called after finding recently deposited paychecks just vanished from their accounts.

The AP says Willis is one of about 5,000 business owners scrambling to pay workers, after a business partner to MyPayrollHR said the company diverted the estimated $35 million from employee accounts. Some accounts had multiple withdrawals, leaving many employees with negative balances.

Willis says one of her employee's accounts was overdrafted nearly $1 million. 

"She had less than a thousand dollars in that account so we want to know how is that even possible?" Willis said.

Willis' shelter rescues about 200 dogs a year, but she can't take in any more until they get the money back to fund it. 

"I hope there's a better answer other than somebody intentionally stole money and ran away with it," Willis said. "I hope there's a better answer, but right now I just can't think of one."

The FBI is asking for more potential victims to come forward.