AG charges Lansing business owner with payroll fraud
The Michigan attorney general has charged a Lansing business owner with payroll fraud after an investigation found he allegedly withheld money from employees’ paychecks for nearly a decade.
The probe targeted Camron Gnass, the founder of Traction Partners, who described the matter as a payroll system error he has been working to resolve.
Traction is a small branding and design studio firm in Lansing. Knass also owned and operated another company, Vision Creative, which opened in 2007 and was dissolved in 2012, state officials said in a statement Wednesday.
The investigation determined that between 2008 and 2017, the businessman "failed to place money into at least two employees’ retirement accounts — even though the money was deducted from their paychecks. (He) is alleged to have instead placed his employees’ withheld funds into the business’ account and then used the funds for his own personal gain," according to the release.
The amount was more than $52,000, state officials said Wednesday.
Authorities allege Gnass in 2017 paid part of the amounts withheld in an attempt to make them whole but "remains significantly short on the amounts allegedly withheld, plus the employer matches and the lost investment gain."
In a statement, Gnass said the charges stem from “what amounts to an error in our payroll systems” and said he would “never do anything that would be harmful to my employees” or risk tarnishing a reputation that includes community volunteer work and fundraising for local projects.
“Neither the affected employees, my bookkeeper nor independent CPA firm noticed until it was brought to my attention by a former employee,” Gnass said.
“I have been working diligently to repay this debt ever since that time. The former employees have been a part of the reconciliation and we’ve worked within the guidelines of the volunteer correction program with the IRS to rectify. I value each one of my employees and the work they do for our clients and our community.”
The attorney general's office has charged Gnass with 13 felony counts, including conducting a criminal enterprise, and receiving and concealing stolen or converted property. He is slated to be arraigned in Ingham County's 54A District Court.
“Employees putting money aside for their retirement shouldn’t have to think twice about whether that money made it into their savings accounts,” Michigan Attorney General Dana Nessel said in a statement.
“When businesses exploit their workers by cheating them out of their hard-earned money, families have less in their pockets and an uncertain future. This has gone on for far too long and Michigan isn’t waiting any longer to crack down on payroll fraud crimes.”
The charges are the first resulting from the Payroll Fraud Enforcement Unit that Nessel launched in April.