We have added some updates to our post following the recent scandals involving payroll outsourcing companies IOIPay and MyPayrollHR.
Breaking News: Capital Region payroll company, MyPayrollHR, has left countless employers and employees around the nation with negative balances following an unexpected closure. We’ll update this post with new information as it continues to be released to the public.
Previously Released News: According to reports, Interlogic Outsourcing Inc. (IOI) is now seeking federal bankruptcy protection as the company struggles with the financial fallout of the wire fraud lawsuit filed against the company last month. With numerous companies suing IOI and owner Najeeb Khan, the company’s newly installed interim president Daniel Wikel is seeking relief as they work to keep the business afloat and preserve nearly 200 jobs.
Also revealed in the bankruptcy filing, experts are now suggesting the total losses resulting from the fraudulent activity could total $340 million. Unfortunately, the bankruptcy filing may make it difficult for IOI’s customers to get much of that money back, as it was also revealed that IOI does not have insurance policies to cover these losses. The best chance to recoup losses now is for IOI to sell or from a likely civil suit against former CEO Najeeb Khan, who the company is placing sole blame for the fraud.
In response to this whole fiasco that has shaken the payroll world, Netchex’s CFO recently issued a statement outlining our company’s strict system of checks and balances that protects our clients’ money at all times, including audits and oversight, separation of duties, reconciliation and balancing, and full transparency at all times. Read the full statement here.
**ORIGINAL POST (9/18/19)**
Last week, news broke that sent shockwaves through the world of payroll, leaving businesses that outsource their payroll confused and nervous. Fortunately, Netchex clients have nothing to worry about.
According to a federal lawsuit, Interlogic Outsourcing, Inc (IOI), a payroll processing company serving over 6,000 clients nationwide, is accused of initiating wire transfers worth $122 million without having the money to cover said transactions.
The civil suit filed by KeyBank of Cleveland states that IOI CEO Najeeb Khan knew there were insufficient funds to cover the transfers, but proceeded anyway, making his actions and those perpetrated in the name of IOI as “willful breaches and fraudulent conduct.”
“While we can’t comment on the details as the investigation continues, we believe that this is an isolated incident,” said Jeff Kew, a spokesman for KeyBank.
As KeyBank assures its clients and shareholders that this was an isolated incident, it is also crucial for customers of other payroll process companies, including Netchex, to understand that as well. This type of misleading (and illegal) financial dealing is not common or tolerated within the payroll industry.
While we understand the uneasy feeling it might give others who outsource payroll processing, Netchex goes to great lengths to ensure our clients’ payrolls are processed quickly and accurately, while following ALL local, federal, and industry mandates.
“Trust is a major component in our relationship with clients,” states Will Boudreaux, co-founder and CEO of Netchex. “With payroll processing, clients entrust us not only with their business’ finances, but also their employees’ well-being. It is something we take very seriously and would never do anything to jeopardize.”
At Netchex, we are also aware of the difficult situation this puts the customers of IOI. Should any need our service, the Netchex team is here to help with a quick turnaround payroll process and transition, backed by award-winning customer service and support.
We offer flexible pay options depending on your needs, including unlimited direct deposit, live checks, and paycards. With almost two decades of industry experience and satisfaction, Netchex is a company you can trust and depend on for your payroll services and more.