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Former owner of Dauphin County payroll firm sentenced for stealing $5.7M from clients

A former Dauphin County business owner has been sent to state prison for stealing nearly $6 million from hundreds of business and nonprofit clients over a five-year span.

Attorney General Josh Shapiro announced Wednesday that 45-year-old William Sullivan Jr., the owner of former payroll company Net Pay Solutions, was sentenced on felony theft charges to 15 to 30 months in prison, followed by 54 months of probation.

Sullivan pleaded guilty to theft by failure to make required disposition of funds, a first-degree felony. He stole more than $5.7 million from clients between 2006 and 2011. Investigators said 266 clients, many of them small businesses and nonprofits, were affected by Sullivan’s actions.

As part of his guilty plea, he also was ordered to pay nearly $4 million in restitution to victims. The state sentence will run concurrent to a federal sentence Sullivan received earlier this month for similar crimes in western Pennsylvania.

Net Pay Solutions, which filed for bankruptcy in 2011 and is no longer in business, had clients across Pennsylvania, as well as in Maryland and New Jersey.

Sullivan, the firm’s chief executive, took funds allocated to pay his clients’ taxes and unemployment compensation claims and used them to pay his company’s operating expenses and financial obligations. He also used client funds to cover personal spending on vehicles, travel and home renovations, investigators said when he was arrested in 2016.

To cover his tracks, Sullivan allegedly made false entries in payroll accounting software to make it appear as though money was being used for legitimate payroll and business expenses. He would then send emails and documentation to clients who believed their tax payments were paid or pending.

As he picked up new clients, Sullivan used their money to pay unpaid tax liabilities for existing clients, investigators said.

“Sullivan badly hurt Pennsylvania businesses by not paying their federal, state and local tax returns for five years – as he promised to do under agreement for his clients,” Shapiro said. “These were small businesses and nonprofits – some of which were forced to close their doors because of his repeated thefts. He violated their trust and stole their money. His guilty plea and sentencing today will ensure justice is served.”
 
Dan Ryan of Harrisburg-based Information Network Associates, who lost $112,391 to Sullivan’s scheme, echoed Shapiro’s sentiment.
 
“His thefts and deceit negatively affected my business and employees,” Ryan said in a statement included in Shapiro’s news release. “I am grateful that Attorney General Shapiro and his office are working to protect Pennsylvanians like myself from such a horrendous criminal scam.”
 
Sullivan’s defense attorney, Paul Muller of the Dauphin County Public Defender’s Office, said the guilty plea at the state level was advantageous for Sullivan, given the federal case he was facing.
 
“I think both sides were glad to resolve this short of going to trial,” he said.

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