Банк Chemung получил 2,9 млн долларов в рамках урегулирования спора с Pioneer Bank по делу мошенничества Майкла Манна

ALBANY - Chemung Canal Trust Co. is recovering an additional $2.9 million from its fateful participation in funding a $42 million line of credit for jailed local businessman Michael T. Mann nearly a decade ago. Chemung, which operates in the Albany area as Capital Bank, disclosed in a U.S. Securities and Exchange Commission filing last month that it was dropping a civil lawsuit it filed against Pioneer Bank in 2020 over a $42 million line of credit Pioneer had with Mann and his various businesses, including his Clifton Park payroll processing firm, MyPayrollHR. The Albany Business Review first reported the news Tuesday. More: Read previous coverage of the MyPayrollHR scandal. The collapse of MyPayrollHR happened just after Labor Day weekend in 2019. That is when Mann's years-long effort to defraud Pioneer and a handful of other banks out of tens of millions of dollars in ill-gotten loans was finally exposed. After one of Mann's banks froze his account over the long holiday weekend, Mann's payroll firm clients, small businesses located across the U.S., were not able to make payroll, leading to a chain reaction of lawsuits and bankruptcies. Mann, who pleaded guilty to a dozen federal crimes related to bank and wire fraud and identity theft, obtained massive loans and lines of credit from unsuspecting business lenders using false financial reports and fake invoices involving Mann's various firms, some of which were simply shell companies that had no business activities. In addition to being sentenced to 12 years in federal prison - he has served out nearly half of his sentence at a low-security federal prison near Trenton, N.J. - Mann was also ordered to pay $101 million in restitution to his victims. Pioneer was the single-largest victim, having lost $36 million, which was how much Mann and his firms had outstanding on his $42 million line of credit at the Colonie-based bank. Pioneer had sold off pieces of Mann's loan to Chemung and Berkshire Bank, now called Beacon Bank. Chemung had the smallest piece at $4.2 million, according to previous disclosures by Pioneer Bank. Pioneer previously paid out $2.1 million to Berkshire and Chemung, with Chemung getting about $500,000.  In its Aug. 6 SEC filing, Chemung Financial Corp., the parent company of Chemung Canal Trust, said the bank will get $2.9 million in a settlement that will end the lawsuit and its claims against Pioneer. The settlement came after the two sides entered mediation, according to previous filings in the case updating the judge on settlement talks. Lawyers for Chemung filed paperwork discontinuing the lawsuit in state Supreme Court on Aug. 14, a week after the settlement was reached. The Times Union reached out after hours Tuesday to spokespeople for Pioneer and Chemung, but has yet to hear back. The victims of Mann's payroll firm, meanwhile, have pointed out that they have not been paid anything in connection with the fraud scheme. The case to recover money for victims was recently assigned to a new judge. There's more to Albany with the Times Union. Subscribe today for just 25¢. This article originally published at Chemung Canal Trust Co. reaches $2.9 million settlement with Pioneer Bank.