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Michigan business owner allegedly withheld funds from employee paychecks

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Posted at 8:53 AM, Aug 29, 2019
and last updated 2019-08-29 08:53:28-04

LANSING, Mich. (WXYZ) — A Lansing small business owner was given 13 felony charges in the Michigan attorney general's first payroll fraud case.

According to a news release, Camron Gnass's allegedly withheld more than $52,000 from employees' paychecks for deferred retirement contributions but did not deposit the funds into their accounts and pay the employer match.

“Employees putting money aside for their retirement shouldn’t have to think twice about whether that money made it into their savings accounts,” Nessel said in a news release. “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.”

Gnass' business, Traction Partners, a small branding and design studio firm in Lansing, started in 2010. Before Traction, Gnass was the owner and operator of Vision Creative, which opened in 2007 and was dissolved in 2012. Traction is currently still open in Lansing with five reported employees, including Gnass.

The U.S. Department of Labor turned over an investigation of Gnass's business practices to the Michigan Attorney General's Office in July 2019. The investigation determined that between 2008 and 2017, Gnass reportedly did not place money in at least two employees' retirement accounts even though the money was deducted from their paychecks.

Gnass allegedly put the withheld funds into the business' account and then used the funds for his own personal gain, officials say. In 2017, Gnass paid a portion of the money to the affected employees, but remains significantly short on the amounts allegedly withheld, plus the employer matches and lost investment gains.

He was charged with the following:

  • Four felony counts of Larceny by Conversion (more than $1,000 but less than $20,000) — a maximum sentence of five years in prison and/or a $10,000 fine for each count. (One count for each year of withheld funds from an employee within the six-year statute of limitations.);
  • Four felony counts of Larceny by False Pretenses (more than $1,000 but less than $20,000) — a maximum sentence of five years in prison and/or a $10,000 fine or three times the value obtained (whichever is greater) for each count. (One count for each year of withheld funds from an employee within the six-year statute of limitations.);
  • Four felony counts of Receiving and Concealing Stolen or Converted Property (more than $1,000 but less than $20,000) — a maximum sentence of five years in prison and/or a $10,000 fine for each count. (One count for each year of withheld funds from an employee within the six-year statute of limitations.); and
  • One felony count of Conducting a Criminal Enterprise — a maximum sentence of 20 years in prison with a maximum fine of $100,000.