True Payroll Crime Stories

[00:00:00] Welcome to our podcast, Its About Payroll. We're your hosts Brian Escobar and Walter William Duncan III. Whether you're new to the payroll game or a seasoned veteran, we have something for you. Welcome back folks, this is episode 1, I wrote it down somewhere, 113. Episode 113 and we

[00:00:35] got a, goodness gracious, we've been like on a little before I get into all my rants. What's up Walt, how you been doing sir? I've been good man, no complaints to move with what was successful from Georgia so I'm here. It's like my first week.

[00:00:50] Georgia, GA chapter, look out for your boy coming soon in Atlanta. I already joined the chapter. Oh yes, that's what I'm talking about. Yes, hey shout out to Ainsley, shout out to John, Christine Scope, Amy, gosh there was enough people here.

[00:01:12] So many, no not only that because I want to segue right into talking about payroll Before we get into it and to the rest of it, we just got a lot of great things to talk

[00:01:21] about some nice pay news. We haven't recorded in a while a lot like this. We've been sharing some like lost tapes and stuff like that. And for those who don't know lost tapes is at one point we were building, we still have our website so go check

[00:01:35] out it's about payroll.io anytime our stuff is there, great content, great fun things. But at one time we were doing like shows behind a paywall and then it just didn't work out. We need more followers to get the subscribers that we

[00:01:50] need. So we said instead of holding that content back, let's go ahead and share it. It's lost tapes right? So that's what the lost tapes are folks. They're a bunch of episodes we recorded that nobody's ever heard and

[00:02:01] it's really it's not dated because a lot of the things that we do are evergreen right? So those are lost tapes but this is a new new episode. We went to Payroll Congress in what is that May? May, early right?

[00:02:12] Where are we now? June, early May so it's about a month ago and just our first time in Payroll Congress and before I keep ranting how did what tell us what was your experience of Payroll Congress? What did you think

[00:02:24] of it? What was the what's your feedback? The biggest takeaway for me was the people honestly. Just meeting everybody in person meeting Gerard. Oh that was so much fun. Meeting everyone, Sarah, Jody, everybody that we met Max, Hard, everyone that we connected with. I just keep

[00:02:43] rattling off names here but everybody had their own story to share. Everybody was welcoming to us. Everybody was just for me I realized that everybody loves Payroll, but they also love people. They also love making those connections. Nick Day we met him. Everybody just has

[00:03:04] a love for everyone and Laurel, Sarah, me and Gerard. We connected with her after 15-20 years of working together. We previously worked together like 15 or 20 years ago and reconnected with her and seeing how she's just blossomed and how she's just become this awesome Payroll pro.

[00:03:23] Her passion for people. That's what it was for me. Just reconnecting with people and meeting people in person. That's the biggest takeaway for me. What about you?

[00:03:34] I'm trying to get like all the names. Pete, Aaron and Chris in person. Again a lot of the guests we've had on. Tiffany. Oh my gosh Tiffany Gray. It goes on and on. There's one more. There's one with Gerard introduced us really. It was so much.

[00:03:51] Again it was our first time there. I had been to another Payroll, not Congress, but a Payroll conference by a Lucian. Lucian is like a higher ed software and it was very similar but nothing compares.

[00:04:05] What does Pete call it? Is it Pete? The Super Bowl of Payroll conferences. I agree. It was just the vendor hall was amazing. You can really see the presence that these different vendors have

[00:04:19] and the commitment that they want to bring to Payroll. It was just, yeah no blessing man. It was amazing. It was an amazing experience. I can't wait to go back next year. It's going to be a little closer to both of us now next year.

[00:04:33] It'll be in Orlando. They already know. I guess my biggest takeaway is if you're a Payroll professional and if you've never been to Payroll Congress

[00:04:41] you have to try your best to go. I know it could be a little pricey, could be a little expensive, but it is all education for the whole time that you're there.

[00:04:51] There are classes that you can take, nine to five. You can justify to your company, hey this is absolutely a training week, a learning week.

[00:04:59] You can even pick out the courses and the sessions that you want to sit in with your boss, with your company to be like, hey look at what they're going to cover.

[00:05:09] You can really justify the expense as a business. It is absolutely a business expense. It's a learning experience, opportunity. What can I say? Education. While we talk about education is one of the most important things for us and it has to be recurring.

[00:05:23] You cannot get into Payroll and not have recurring education. It was inspiring. It was great to be around all these folks that just love Payroll also.

[00:05:34] We did a couple of interviews of not why, don't tell me how you got into Payroll. Tell me why you stood in Payroll.

[00:05:42] Just continuing to go off that fuse that Jody lit for us. Don't tell me why you got into it. Tell me why you love it. Tell me why you stood. Man, it also, I don't know if you said the word but it was also fun. Yes.

[00:05:59] It just wasn't educational. It was really fun. It was really fun. It was really a great time in my opinion and it just shed light on, for me it shed light on the awesomeness of Payroll and the people in Payroll. It's a lot of fun.

[00:06:17] Yep. Yeah, absolutely. And what we learned going over here because we weren't sponsored to go, we bootstrapped at Me and Wal ourselves and it was absolutely worth the expense.

[00:06:28] Gerard told us that it's worth it. And when he said it I was like, alright cool, because we were on the fence for a while. We were like, I don't know, it's a lot of money.

[00:06:36] But look out for, they have one day, two day, three day passes. So you don't have to go for the whole five days. Especially if you're funding it yourself, yeah.

[00:06:46] Especially if you're funding it yourself and you want to go, and it is that serious. As we tell you on this or as we share, I don't want to say we tell you, no.

[00:06:55] As we suggest and urge you on this show, invest in yourself as much as you need to and possible. This is one of those opportunities that if your company is simply not doing it.

[00:07:06] One, I would quietly start looking for another company to work for because, no for real, because if they can't support your educational, the growth of your position, come on, what are they doing?

[00:07:17] What are they doing? So if they don't, I would suggest you do a one day pass, do a two day pass and just boost, use your PTO. It's absolutely, maybe they'll just give you PTO on that. Figure out a way it's worth it. And the people are amazing.

[00:07:34] It was like three to three thousand payroll professionals, HR professionals, people who do payroll, wherever department you fall in, finance, accounting, whatever.

[00:07:43] And there's classes for everyone. Some of them are packed sessions. If I have a complaint, my only complaint is that you can't take every single session offered because they overlap them because they have to.

[00:07:56] It's just like they want to get all this content out. They want to make it worth your while. And so that's my only thing. I want to take everything.

[00:08:02] But the good thing is that they have those, I forget the name, the specific name of them, but they have those little like the breakdowns or the PDFs.

[00:08:12] The presentation, the decks, right? They have those that you can download and review the classes. So there was a course you couldn't miss. It was the same time as this one.

[00:08:23] Yeah, it's not the same. But yes, yeah, that is true. That's true. I forgot about that. You can get all of the information from all of the sessions to just cover it.

[00:08:34] But yeah, it was an amazing experience. Can't wait to do it again. Orlando Live. And yeah, Orlando 25 will be there again. And that's yeah, I guess that's about it.

[00:08:44] As I think about things randomly, put them out there. Again, shout out to Chris and Aaron from Hey Active for hanging out with us and Broke Red and just what great folks, man, great dudes.

[00:08:57] And we had some great laughs. And one of the biggest things that from that conversation that I do want to share is that what they said was that what they've learning is that a lot of leaders don't really understand the earn wage access product.

[00:09:12] And that's a shame because it doesn't cost the employer anything. And it absolutely improves the employee experience. So I urge you, if you're a leader that doesn't understand earn wage access, please smarten up.

[00:09:27] Please go and research. Please ask experts, some trusted people what it's about, how it can help your organization. Go ask Pay Active, man. My boys Aaron and Chris over there.

[00:09:36] Talk to them, get some information because it is about the employee experience. You're not hurting your employee. You're helping them in a world where 80% of the Americans live paycheck to paycheck.

[00:09:47] Earn wage access is a help, is a tool to get into a better place. Yeah, that was it. And then we got some pay news. This is a true payroll crime episode. We haven't done one in a while.

[00:09:59] They're always great info and fun to talk about these type of things. And before we get into that, as always, we have some pay news updates, some payroll news updates for you.

[00:10:10] Yeah, well is up first because your ways is diligent about getting his work done first. So he goes first most of the time.

[00:10:19] I just love busting your chops. Yeah, man. All right. So the first article I have is a 2020 LinkedIn article from Renee Broft, who's the owner of Paytech. And she discussed some red flags and payroll processes that could indicate potential fraud.

[00:10:37] So I'm going to go through these key points. I may not elaborate so much on deep so deeply into things just going to go through some key points and some prevention measures that could have been done to help with this.

[00:10:51] So the number one key point is unusual overtime patterns. So you see significant fluctuations in overtime hours or sudden spikes that aren't consistent, that could signal some fraudulent activities.

[00:11:05] You know what I'm saying? Just falsifying those time records or having unauthorized or unapproved time off. The next one is frequent manual adjustments. If you see a lot of excessive manual adjustments to employee time cards or records, especially without the necessary documentation or approvals, that could indicate attempts to manipulate payroll data, fraud purposes.

[00:11:33] Number three is you have high employee turnover rates. This one was interesting to me, right? Because I'm like, man, like some industries naturally just have those high higher employee turnover rates anyway.

[00:11:46] But I guess maybe that could be a breeding ground for those ghost employees. You know what I'm saying? Like in those because I've seen that I've been in industries that have had those high turnover rates and there was situations where people had creative turnover rates.

[00:12:02] There were situations where people had created ghost employees. So that could be a sign of potential fraud too, man.

[00:12:10] Number four, unexplained payroll discrepancies. So these are where you have some expected discrepancies, which could be somebody didn't sign a time card in time or somebody didn't submit a PTO request in time. Those may be expected human nature. Those things happen naturally in payroll and everything.

[00:12:29] So you might see something, but where you may see discrepancies that is between the actual what's been paid versus what the actual payroll expenses are.

[00:12:40] And so that's why finance and accounting is always looking for us to do those reconciliations at the end of the year. So they're going to look at the benefit contributions. They're going to look at tax withholdings.

[00:12:51] Number five, employee complaints or whistleblowers. So I shared this story. I think you and I share our own stories about where whistleblowers that come forward about a situation.

[00:13:12] My story was where someone said called me and asked about overtime and said, hey, I think they're doing something wrong or shady here. We don't know. We're trusting our manager. She keeps telling us that they're good.

[00:13:23] So that could be potential fraud or theft or whatever it may be. So those things shouldn't be dismissed. You should do prompt investigations when those things occur because it could be somebody that's even if it's unknowingly.

[00:13:36] Most times not. But even if they're doing something unknowingly like thinking they're doing, it could be actually it could be ignorantly as well. Ignorant. Yeah. Yeah.

[00:13:47] What are some of the prevention measures that you could do? You could implement those internal controls segregation of duties, duties in a silo within the payroll process to prevent unauthorized access or manipulation of payroll data.

[00:14:03] Keep your keep us payroll folks honest and conduct regular audits or review payroll records to identify and detect those anomalies and ensure compliance. And we should do that ourselves, right?

[00:14:16] A good payroll pro is going to check ourselves. We're going to check ourselves before we wreck ourselves. So number three is provide training and awareness programs for your employees to recognize and report those potential payroll errors or frauds or irregularities.

[00:14:33] Right. Number four, establish channels for anonymous reporting of suspected fraudulent activities. Encourage whistleblowers to come forward without fear of being retaliated against. So you want your employees to break something forward.

[00:14:49] You want to and that's not the payroll pro. You want to encourage people in your entire company to come forward and say hey I don't think this is right.

[00:14:57] And then the last one you want to utilize technology solutions, payroll software that there's some payroll softwares that have built in fraud detection features and automate those processes and they can enhance the accuracy of payroll and reduce the risk of having somebody human mess it up or for manipulate the data or whatever.

[00:15:19] So that's pretty much all I have. What about you? Nice. Pretty much. That's a dope little segment there, buddy. And I just want to call out something. The reference to Paytech is not the magazine. This business owner, Renee Profd, owns a business named Paytech Inc.

[00:15:36] So just to separate because there's also Paytech magazine from payroll org. Just yeah, just to clarify that and then my little comments for I want to shout out Edna Mendez from our LinkedIn.

[00:15:48] She commented on one of our prior episodes about how to catch fraud just so amazingly timed that you actually give her the ways to find these fraud things right.

[00:16:01] So shout out to Edna Mendez. I hope you see this episode so that you can learn more and I encourage you just to keep listening, watch the entire episode, listen to the entire episodes and boom, you got some more there.

[00:16:13] Yeah, I'll try to ping her. Do you know her personally? Yeah, she used to work with me. If you remember, ping her and let her know this episode 113 is going to have what she needs.

[00:16:25] And then what I love is these real, these when the you could almost say when life meets art with this right because we're reporting this is our show.

[00:16:34] But I'm actually going through the same real life examples where time sheets and payroll registers aren't matching and things like that. We got to what's the solve and what's the solution here? Why are they off?

[00:16:47] They'll put the process in place going forward to make sure it doesn't happen. This happens all the time folks where especially in two.

[00:16:54] Yeah, especially in where systems where it's two system, meaning you got a tech stack of your time and attendance system that even if it's integrated with your payroll system, it's two different systems.

[00:17:08] Things can be lost in transition. And also, and this is where the ignorance comes in ignorant managers and the word sounds so bad, but it just means you don't know yet. You don't know what you don't know.

[00:17:20] And managers may be doing things in a way where it's not transparent, where the auditors might look back or payroll folks like myself may look back at the data and say, oh wait, there's a difference here.

[00:17:32] And why? And there's no there's no notes. There's no documentation of why it's happening. So I love when it pulls all these things together that we always talk about documentation, auditing. This is all real stuff, folks.

[00:17:46] It happens in real time. And what fraud again, like Walt said and called out in his prevention measures, knowledge is the key to the offense.

[00:17:56] You got to know you got to stay just refreshing and keep on top of these things so that you are able to combat against it. Absolutely. My article is from or about cloud pay.

[00:18:12] The quote here by one of their officials is that technology allows for the integration across HR, payroll and payments to create one seamless modern pay experience. Absolutely. Companies who capitalize on this opportunity will unlock even greater efficiencies across the business from a gentleman named Grant Tasker at Cloudpay.

[00:18:36] Here's what I like, right? Here's the meat of it. Right. Globally, issues per 1000 pay slips. So right pay issues per 1000 paychecks. Some folks call it place pay slips have fallen for the second consecutive year and the rate is now 35 percent lower than it was five years ago.

[00:19:00] So that's a great thing for payroll. The technology is helping to decrease the errors per 1000 pay slips.

[00:19:08] Okay. Data input issues, the proportion of issues caused by mistakes in data input out of all issues affecting payroll also declined slightly down 1.1 percent year over year and is now 10.1 percent, 10 percent lower than when the report was first published in 2019.

[00:19:28] While these numbers reveal a higher quality of data overall, almost two thirds, 63 percent of all payroll issues are still caused by data input mistakes.

[00:19:40] Yep. Huge. And that's what we, yes, that's what we talk about. We talk about this all the time and it's real like in our real life, real work, not the show all the time.

[00:19:50] So in the United States, first time approvals, the percentage of payroll runs that are approved at the first attempt and don't require any changes are at 69 percent, which is really good.

[00:20:04] But it's compared globally, it's a little short compared to only 74 percent. This leaves much room for improvement in the U.S. in the areas of data accuracy and workflow.

[00:20:15] So U.S. payroll professionals, we still have a ton of work to do, right? We're doing amazing work. But look at that opportunity there that we still have to clean up those issues. What's that? I don't want to I don't want you to lose your thought. Go ahead.

[00:20:29] So you said that 63 percent of the errors that happen are from data entry. Yes. But that's two thirds. Yes, that's what I said. That's what I said. Almost two thirds, 63 percent of all.

[00:20:44] Of course. Now it says data input mistakes. So I do want to I don't want to exclusively say it's data entry by humans data input. I guess you're right.

[00:20:54] Yeah, trying to allow a little grace there. But yes, I mean, it could be. Yeah, it's data input mistakes. That's what it is. Right.

[00:21:02] I get what you're saying, though. I get what you're trying to say, because it could be an integration. It could be like an API connection. That's an input. So I don't want to say, oh, it's only human error. But that's something that we talk about all the time.

[00:21:13] We talk to our leaders about it all the time about, hey, we can do this process. And folks, this is a great article to support your cases when you're going to your leaders and your stakeholders about why human entry shouldn't be part of the payroll process.

[00:21:30] Right. We need as much automation as we can get. We use leverage the systems because often you'll get a situation where folks are like, oh, can we can you do X, Y and Z?

[00:21:41] And meaning some payroll input. And we would be like, yeah, but it's going to require manual human entry, which is now exposure. Exposure means you're exposed to error. Right. You can have your right for error.

[00:21:59] Just an amazing article, little nugget that I found late at night looking from my stuff and I'm like, oh, my goodness, what a gem. And then and this is all by the way, this is all part of cloud pays global payroll efficiency index.

[00:22:16] So the show this will be in the show notes, folks, if you want to go dig in more that whole global payroll efficiency index is out there and check that out. So yeah, that's the there's more in the article. But I think that is the call out.

[00:22:31] That's the biggest call out. Right. Pace lists, things like that. So yeah, man, that's that's it from cloud pay. I do have another one. If you don't mind, we have a new update from a word from our sponsors.

[00:22:44] And I thought, hey, why not do it live in the show? Are you good with that?

[00:22:48] Effective July 1st, 2024, a final rule that expand expands overtime protections for millions of the nation's lower paid salaried workers by increasing the salary thresholds required to exempt a salary bonafide against the salaried workers.

[00:23:02] The salary thresholds are increased to the equivalent of an annual salary of $43,888 and the increase to $50,660 on January 1, 2025. It's almost a 40% increase there. 15 to 15,000. That's almost a 40% increase there.

[00:23:33] So this means that millions of additional workers will be required to track time and attendance now because of that, whether they are new to time tracking or looking to make a change.

[00:23:45] Time track goal provides a simply better solution that you can have up and running in a matter of minutes. If you follow the link in our episode notes, you'll also get your first month free. So don't miss out to take advantage of the special offer.

[00:24:00] Use the link in the show notes to start your 14 day free trial in the month of June to qualify for your first month free. Let's go. Great. Yeah. And check that's a great sponsors over at time track. Go. Great folks. It's a great product.

[00:24:17] And yeah, check it out. You can get the first month free. They're extending it. They did it for small business month last month and they're extending it another month as they as folks prepare for these new changes in time tracking.

[00:24:31] You could have now an increased population because of this rule that changes. And we'll talk more about that because that is another developing story in the payroll world that will impact payroll pros. So definitely more to come about the salary threshold.

[00:24:47] I'm sure all of the payroll pros know about it. But if you're new and you're or you just haven't you're so in the weeds and you haven't realized it, it's happening folks because they sometimes they tease this right though. Oh, we're going to do this.

[00:24:58] And then it doesn't happen. They go back on it. Yeah. But yeah, so quick word from our sponsors. Thank you for that. And then yeah, it was let's get into the meat. The whole point of this. Nitty gritty.

[00:25:10] Nitty gritty of the payroll true payroll crime and will always procure some really interesting cases stories payroll fraud. So go ahead, take us through, sir. I find it interesting that thank you for sharing the update with especially with the salary increases.

[00:25:27] I think that's really important for the time. Try go. Yeah, no for that to be happening and so. So yeah, shout out the time. Try to go for that. But we did some research a couple of episodes ago, a little while ago.

[00:25:38] We found out which industries have the highest are more sick are which have more are more susceptible to payroll fraud or payroll crimes and construction was one of those. So this is the construction story here. And it's basically like a shell company. What comes together? Yeah.

[00:25:56] So shell some shell company operators were sentenced to a multimillion dollar payroll fraud scheme. So Chief United States District Court Judge Timothy J. Corrigan sentenced to Honduran nationals Omar Wilkins Santos Calix and Oscar Renee Santos Santos Santos to 24 months in federal prison for wire and tax conspiracies.

[00:26:24] Santos Calix must pay a little over three million dollars in IRS restitution and almost a million dollars in money judgment. While Santos owes 1.7 million in IRS restitution and a little over a little under half a million dollars in money judgment. So what happened right?

[00:26:46] So here are some of the key points. Santos and Santos. They established a fake construction company to perpetrate their scheme. Right. So that's what that was the shell company. They acquired minimal workers comp insurance and rented it to work crews.

[00:27:01] The duo cash payroll checks issued by contractors deducting a 6% fee before distributing cash to the crews totaling approximately ready room room please. $19 million. Neither the shell companies nor the contractors reported wages to the authorities are paid payroll taxes resulting in a $5 million tax liability.

[00:27:30] The scheme evaded higher insurance costs by purchasing policies for $21,000 instead of the required 2.5 million. That's a lot of savings there. The investigation and prosecution were conducted by Homeland Security investigation. Investigations HSI the IRS criminal investigations and the Florida Department of Financial Services. So of course this happened.

[00:27:58] Yeah, of course. Exactly. Florida man. I think it's a shame that we still have this issue in the construction business, but it seems like there needs to be some type of I know we have the government.

[00:28:13] I know we have these agencies who catch these things like these these guys are caught. Shouldn't there be in your opinion and I may be getting in the weeds here before we get to the preventative measures.

[00:28:23] But don't you think there should be a way for when these companies are getting set up like that for those things to be caught ahead of time instead of being so reactive like this. Yeah, it's good that they were caught right. Yeah.

[00:28:35] But it's easy for me to say on the outside looking in, oh, could have caught this beforehand. Exactly. But the government probably didn't know their intent. Exactly. Yeah. Yeah, exactly.

[00:28:46] I think I think it's going to be cases like this that make it like put will continue to have construction on the radar for these agencies. But there's really I don't know.

[00:28:58] I'm going to say there's no way I'm going to say that there's not a lot of ways to do it in advance because you want to give these companies a chance to try to do the right thing. Right. In the beginning, you don't know they're gonna fraud.

[00:29:09] You don't know they're gonna fraud till later. Right. What was that stat you caught 18 months before they that they went on 18 months. Payroll frauds. Payroll frauds. 18 months, man. And guess what? They only forget how they caught it in there.

[00:29:22] But there are times they probably may not even catch it. So if you're not intentionally looking for something, you may not even catch it. And that's the thing with these shell companies and the construction business.

[00:29:32] It just makes such a bad name for the folks who are trying to do the right thing and earn a living and build a life and build a company and do something great. Yeah, it's tough. It's really tough. Yeah. You want to do the preventative measures? Sure. Sure.

[00:29:47] Yes. So the preventative measures here for this are number one, implement thorough background checks on individuals involved in establishing businesses and issuing workers compensation assurance. Yeah. Yep. That's yes. That's a good one.

[00:30:01] Conduct regular audits and inspections of business financial records and tax filings to identify fraudulent activities and enforce tax laws and regulations more strictly with collaboration between government agencies, law enforcement to deter similar fraudulent activities in the future. Yeah, it's so tough though. These are correct measures.

[00:30:25] But it's like when does this happen? How does it happen? What triggers these things? And in this case, these guys aren't going to do that. Exactly. So they're probably processing the payroll themselves. They were doing all the stuff themselves.

[00:30:39] They didn't have a payroll pro like you or I on to do this stuff and check this stuff and say hey and call it out to them. Yeah, so it's to your point. You're absolutely correct. Yes. These are correct but only in an ideal situation. Yes. Exactly right.

[00:30:55] Thank you. You articulated it perfectly because I'm like nobody's doing this. When they set up their workers comp insurance, the brokers, you pay the money. Here you go. You got workers comp insurance and inspections of business financial records and tax filings.

[00:31:09] If you're paying your taxes and you're filing on time, it's going to take a while for them to catch up if at all and then enforce the laws and collaborate with the government law enforcement. Who's doing that? Not the company.

[00:31:23] And then it makes it makes me think, wait, this could lead to a point one day where I don't know. I'm going way payroll police. Yes, that's kind of what I'm it's kind of on the lines of what I'm thinking or you force these companies.

[00:31:37] Hey, you're gonna have this business. You have to hire a payroll pro from this organization because then we'll know that as long as this person does this company does your payroll, then you're allowed. But I like that. I like that idea.

[00:31:52] I would love for there to be some type of firm with payroll pros accountants and stuff. I'm sure there is that you have these accounting firms that do these checks and balances.

[00:32:01] I'm sure they have payroll experience and backgrounds like that, but it will be nice if payroll org or somebody like that had an arm that did these checks and balances on businesses and stuff like that would be nice. All right. The IRS added an arm to that.

[00:32:16] Just an idea. That is that's a good that's a good idea. It's a good idea.

[00:32:20] Yeah, that and again just we keep continue to highlight the fact like these different industries like you said, we call it out and you know it's it's this should arm if you're in a big construction company and a payroll and you got legitimate payroll department.

[00:32:38] You got legitimate type of setup. Then these are the things you want to look for.

[00:32:42] If it's a small company again they or if you're like an auditor and they don't have a payroll person that's a red flag right these construction companies that don't have a CPA firm doing their payroll. That could be their first question. Hey, who does your payroll?

[00:32:55] Oh, we do it ourselves. Oh, red flag. We're going to order you. Yeah, we got to come in and audit your breath. Yep. Come and check it. So I love how we just it evolve. It elevates the whole payroll industry. You know, payroll is an industry.

[00:33:10] You know what I mean? Yeah, that's it folks for the payroll. Opo payroll. Yeah. And then as we move into our safe talk segment to close out the show. The question is why oh wow that's a good one. I didn't read that I'm thinking of the other payroll.

[00:33:28] The other one. Anywho, why do you think payroll crimes are so enticing to people? It's temptation. We've seen so time and time again. We see it in and it's always at the highest level right? It's not it's harder for the payroll pros and bigger companies to do.

[00:33:47] That's a good pattern that we're seeing right? It just hit me. Most of the cases are for people that start at the highest level, meaning the criminal. Right? Yes, it's the owner. It's the VP. It's those people.

[00:34:01] It's not necessarily there's only been a few cases what we've done. I think the first one Michael. Mike Mike. Yep. Mr. He had a museum. He was like really one of the one of the only few people that were payroll pro. Yep. Yep.

[00:34:17] So look at that and that really so it's and it becomes the temptation of things. It's the temptation that it's like even you know and I temp part temptation because they're malicious and in this case they just set out to do crime and this shell companies

[00:34:37] their whole their whole intent was to defraud. But then there's another part of it where there's probably people who are struggling companies that are struggling to just make ends meet and they know the payroll is always going to be 40 to 50 percent of your revenue. Okay?

[00:34:52] And that's a big hit when people are like gosh I got to pay 50 percent of what I make to my to but hey if it's payroll that means you're paying it to your staff to the people who are actually helping you stay in business and if you

[00:35:04] really want to be intentional pull the levers and do the things be a good business operator to reduce that expense. Yeah. But they get so tempted because as we all know payroll taxes the company has to

[00:35:20] match the Social Security and the Medicare FICA basically have to match FICA and it's 7.65 percent of gross so that's a biggest it's in the millions right could be in the million better your company the more that is and it's not like another part of it

[00:35:41] is even the employees part of it where like the way this works folks is the government doesn't direct debit your account every time payroll runs. We're responsible as a company as companies as employers to deduct the right

[00:35:58] amount and to send that money to the government what they'll do is not only not match but in some cases they don't even send the initial dot the employees portion over because they might they play with it like oh wait I

[00:36:12] could save a million dollars right now if I just don't send this payment. You know what I mean? What do you think? No man I totally agree with you. You articulated it very well. I think they are tempted because they are in those higher positions and for some

[00:36:28] of those people we realized that they had money made them greedy and they had like certain lifestyles they want to have. I'm able to get this car. I'm able to get this take on this by myself a yacht and do this and do

[00:36:40] that and do this and it's just that temptation like you said that entices them is like hey I can do this. I have control over these numbers or I'm in a position where I can dictate or manipulate the data to favor the outcome that I want.

[00:36:56] Even if it's wrong they're like hey money people what is that saying? Money changes you. Oh yeah. You know what I'm saying? Not to get religious or anything like that on you but shout out to my mom here on this one. No doubt. Shout out.

[00:37:11] But like the love of money is the root of all evil right. That's right. Like what the Bible says in the Bible. So that is that enticing because having money like if you had if you were

[00:37:21] able to get a hundred thousand dollars more dollars right now and they told you oh you might have to do some a little shady. Some of us might consider it. Absolutely. It's the thought. You know what I'm saying?

[00:37:36] It's the thought okay you're going to pay me a quarter million dollars and all I got to do is just submit this late or just fudge it a little bit. Most of us in the payroll industry have that integrity and we're not going to do that right. Yeah.

[00:37:48] But some people just to be honest some people would consider it like oh man. Of course. Of course. And that's what entices you because they're struggling. Yeah. 80% of Americans are paycheck to paycheck. And today's climate and economy a lot of us are struggling so

[00:38:04] that extra 50,000 can change a lot of money. Absolutely. And look folks I'm human guy. I don't I'm super hearing is whatever Brian's full of it but I'm only coming from a place that because I've had I have a close understanding what prison looks like.

[00:38:22] I've never been there but I have a close understanding as a personal statement whatever that means to you it is a little I can't be too can't tell you all my stuff but right. So I ain't trying to go. Yeah.

[00:38:37] I don't care how much money is not worth being away from our family. It's not worth doing that time shoot just go watch. I just saw a series called Blackbird awesome series and but this show prison life gives you an idea what prison life is like and go

[00:38:53] watch Oz that whole HBO show Oz from back in the day. That's what honestly before I even had personal experience with it that show scared the life out of me. Yeah. I was like oh hell no. Like. I'm scared straight. Scared straight. Oh you know what I mean.

[00:39:08] Yeah. I'm good. See I think I think is sometimes it's when I find it interesting right because these people that are already high earners their VPs yes whatever they are already are high earners in the company. But then you turn around and do something like this like why.

[00:39:31] You know what. Yes. Thank you for saying it because you know what if they use their power for good you could make legitimate. Yes. If you use that intelligence the scheming that you because they're smart they're all pretty smart people that are doing

[00:39:47] this scheming absolutely like if you just used it for good you be successful you would have money you would have ventures you invest your money in time you know what I mean like negotiate come on negotiate something for yourself and your agreement or your contract.

[00:40:00] Hey I want some stock options. I want some equity some company equity. Let me get some of that as we see it it's mostly the owners and the V for the high ups take that take it already like

[00:40:09] you said you already a high earner takes you want to make more invest in something else especially now like this we have more millionaires in the world than there ever been in history right. The Internet and AI and technology is making it possible

[00:40:26] more folks than ever can be more comfortable. I'm not going to say wealthy and rich rich yes but not wealth. I always think about Chris Rock he did a back in a day he said rich you can blow on you can spend you can lose

[00:40:47] rich on a good summer and a coke habit wealth wealthy you cannot spend like wealthy. So there's definitely a difference but rich can become wealthy if you're diligent. I mean so it's I don't know if there's so much

[00:41:00] opportunity in the US and it doesn't have to be shady grimy type of thing just as nowadays is enough money and even fast money because if this folks making fast money and you know how to tap into that you can make fast money too and legitimately illegal.

[00:41:15] I don't know I we because we're payroll professionals because we're beyond reproach we think about these things like oh I would never do that but like you said there's plenty of people who are succumb to the temptation

[00:41:26] of it all or in a bad place and they need it and things like that so yeah. Before we end that like there's a thing that I just looked up I just type in the question in Google right now why are people enticed to steal? Oh gosh.

[00:41:42] It said that stealing may cause the brain to release dopamine a transmitter that cause these pleasurable feelings so stealing stimulates a pleasant sensation that pushes you to do it repeatedly. So like some of these people it's an addiction almost to them so especially if they're gambling some people

[00:42:05] like to gamble some high earners a lot of high earners like to gamble buy more money to gamble away I'm taking this gamble by doing this. You're gambling for sure. So it's something that may hit that dope. I believe it. I believe it. Great call out.

[00:42:21] Thanks for that. So that's it folks for today. Hope you enjoyed the show. Check out next week's show as we continue to bring you more payroll. We're trying to line up some great guests. We do have a few guests. I don't know exactly who's going to be.

[00:42:34] Oh no we're recording well next week this after this I always get thrown off because we're recording in a rear. But we got the wonderful Melissa Vcio so coming back on. We got Brittany Furr coming on. We're trying to we're going to. Tiffany Gray agreed to come on.

[00:42:54] We don't know yet. We haven't scheduled anything yet but we definitely that's in the works and shout out to every country. So all the folks that we talked that payroll all want to come on the show or just got to schedule it in this. We're coming.

[00:43:05] I'm going to reach out soon folks. But yeah just got great probably do another good run of guests having some awesome guests come on. But those are the ones we do have scheduled for sure. And yeah look out for more. Yep. All right.

[00:43:19] So the next time folks we love you. Peace. Peace. Before we sign off here are a couple quick things. Don't forget to follow it's about payroll on LinkedIn and it's about your paycheck on Facebook and TikTok. Thank you for being part of our payroll

[00:43:46] community and thank you for being a part of this journey with us until the next time. Keep learning. Keep growing. And most importantly keep going.