Ex-owner of Harrisburg payroll company will serve jail time for stealing from clients

HARRISBURG — A former Dauphin County business owner will serve up to 30 months in state prison and will have to repay $4 million in restitution after pleading guilty to stealing millions from 266 clients who entrusted their payroll funds and administration to his company, Attorney General Josh Shapiro announced Wednesday.

William Sullivan, 45, pleaded guilty in Dauphin County Court to theft by failure to make required deposition of funds, Shaprio said in a press release. Sullivan admitted to stealing $5,737,948 from his clients between 2006 and 2011. As part of his plea, he will have to pay approximately $4 million in restitution.

Sullivan’s company, Net Pay Solutions, went bankrupt in 2011.

Dauphin County Judge William Tully sentenced Sullivan to 15-30 months in prison, to be followed by 54 months of probation. The sentence will run concurrently with a federal sentence Sullivan received earlier this month for similar crimes.

Net Pay Solutions had clients in Pennsylvania, Maryland, and New Jersey, Shaprio said in the press release.

“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 non-profits, 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 sentence today will ensure justice is served.”

Authorities began investigating Sullivan’s business in 2013, after receiving a tip from the Pennsylvania Department of Revenue.

Net Pay Solutions was contracted to process payroll and handle unemployment compensation the filing of taxes for its clients.

Investigators learned Sullivan stole the $5.7 million by making false entries in a tax-tracking software program, then manually reversing them out to make it appear as though the funds had been remitted to various taxing authorities — even though they were not.

In earlier bankruptcy proceedings, Shapiro’s office said, Sullivan testified that his company was operating at a loss. But records showed that from 2009 to 2010, the company brought in 131 new clients without disclosing its mounting financial problems.

Sullivan also admitted to co-mingling Net Pay Solutions funds with his personal accounts, Shapiro said.