Payroll Company Owner Accused of Fraud, Money Laundering

Federal prosecutors say the owner and president of a payroll processing company defrauded more than 50 clients out of more than $5.6 million.

John Scholtz was due to make his initial court appearance Tuesday.

The 57-year-old Winslow man is charged with wire fraud, money laundering and fraud against a local government receiving federal funds. The latter charge stems from funds he allegedly misappropriated from the city of Trenton.

Scholtz owned and operated Innovative Payroll Services LLC. His clients included municipalities, educational institutions and small- to medium-sized, privately held companies.

The firm's clients would routinely deposit funds to pay for payroll taxes into an IPS bank account. Prosecutors say that since at least last June, Scholtz withdrew funds from that account to pay for personal expenses, including a deposit on a $1.8 million house in Florida.

Copyright AP - Associated Press
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