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NY Payroll Company Vanishes with $35M

krebsonsecurity.com

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Re: NY Payroll Company Vanishes with $35M

#81

Post by londons_explore »

apacheCamel wrote: post #27
gregmac wrote: post #11

This was confusing to understand, because multiple bad things happened. Normally: * Step 1: Transfer funds from each Employer's account to Cachet's holding account * Step 2: Transfer funds from Cachet's holding account to each Employee account Both of these steps are handled with an 'instructions file'. --- The crime (or horrible mistake that really looks like a crime): Step 1's file was changed so that the funds wen…

Thank you for explaining it, you did a great job at helping me understand what happened. The whole process seems way too convoluted for something as serious as paychecks. It really relies on everybody acting in good-faith and in the proper fashion. By Cachet working Step 2 before Step 1 and possibly assuming Step 1 was going to happen, they already were too far gone and only made the situation worse for them and a bu…

There are lots of multi-day delays in the ACH system. It's common to pay money out of an account on the expectation that a matching amount of money will be paid in the same night.

Re: NY Payroll Company Vanishes with $35M

#82

Post by londons_explore »

antaviana wrote: post #18

In the US anyone with your bank account number can debit your account irreversibly? In Europe (with SEPA Core) we have 8 weeks to reject any debit even if the entity issuing the debit has a signed mandate to debit the account.

In the UK, direct debit (the equivalent to ACH) allows a consumer to request an instant refund of any payment they believe to be in error. The bank must refund first, and ask questions later.

As you might imagine, some people use that to steal money...

Re: NY Payroll Company Vanishes with $35M

#83

Post by londons_explore »

dsfyu404ed wrote: post #51
isostatic wrote: post #43

Earlier quoted context omitted.

California Civil Code section 2080.1 for example "the person saving or finding the property shall, if the property is of the value of one hundred dollars ($100) or more, within a reasonable time turn the property over to the police department of the city" https://codes.findlaw.com/ca/civil-code/civ-sect-2080-1.html

I'm sure that'll make for some great "well we can't get them on anything else" prosecutions in a few decades as inflation works its magic. Hard coding dollar amounts into law is beyond stupid. At least it's a civil infraction so you should only get a fine in most cases. (I'm making the charitable assumption that having the amount decrease over time was not intended).

Hardcoding dollar amounts into law isn't so bad because future laws can update them. For example, a future law might say "All dollar amounts put into law more than 10 years ago are hereby doubled".

The UK has a similar system for fines. Laws are written that if a particular offence occurs, a "Band A fine shall apply", and a separate bit of regulation says what each band of fine or punishment entails.

Re: NY Payroll Company Vanishes with $35M

#84

Post by londons_explore »

kaikai wrote: post #69
JJMcJ wrote: post #42

Besides the banking issues, when do the people get paid? If the disappeared payroll company got money from employers, it's possible some employers may not have enough cash to pay a second time. Then they out of business, or close to it. The old businessman's phrase "You've never had to meet a payroll" is really meaningful here, the scramble to pay everyone.

The article said that Cachet is covering the transactions, even though they haven't been paid. The companies will have to find a new payroll provider before their next payroll, but not have to come up with the extra cash.

If I were Cachet's shareholders, I wouldn't be happy about that...

Re: NY Payroll Company Vanishes with $35M

#85

Post by isostatic »

dsfyu404ed wrote: post #79
tptacek wrote: post #72

Earlier quoted context omitted.

"Well, if we can't get them on anything else, we'll get them on theft" seems OK to me.

Writing catch-all laws especially ones that require law abiding people to go out of their way in order to follow them seems pretty darn dystopian but I see how one could turn a blind eye to it if it's used for something they want.

How do you have to "go out of your way" to follow a law which says "don't take stuff you don't own"?

Re: NY Payroll Company Vanishes with $35M

#87

Post by notfoss »

londons_explore wrote: post #84
kaikai wrote: post #69

Earlier quoted context omitted.

The article said that Cachet is covering the transactions, even though they haven't been paid. The companies will have to find a new payroll provider before their next payroll, but not have to come up with the extra cash.

If I were Cachet's shareholders, I wouldn't be happy about that...

If I was one of their shareholders, I would be happy instead, as they seem to have come out as the real good guys in the whole story (unless they were legally obligated for covering the mess).

Re: NY Payroll Company Vanishes with $35M

#88

Post by dsfyu404ed »

isostatic wrote: post #85
dsfyu404ed wrote: post #79

Earlier quoted context omitted.

Writing catch-all laws especially ones that require law abiding people to go out of their way in order to follow them seems pretty darn dystopian but I see how one could turn a blind eye to it if it's used for something they want.

How do you have to "go out of your way" to follow a law which says "don't take stuff you don't own"?

Read the cited law. It says you are obligated to report anything you find over $100 to the police. If a bartender finds a wallet with $150 in it, sticks it behind the bar and doesn't report it and the patron comes back alleging it had $200 in it he/she could get screwed. I'm sure you could come up with other examples. The point is that using a specific dollar amount is stupid. Give it some time and $100 will be a lot more like $50. Sure, the law can be changed if the relative value gets too low but there will never be any will to do it unless a real sob story comes along because people don't find property that the owner subsequently wants back all that often.

Re: NY Payroll Company Vanishes with $35M

#89

Post by dsfyu404ed »

londons_explore wrote: post #83
dsfyu404ed wrote: post #51

Earlier quoted context omitted.

I'm sure that'll make for some great "well we can't get them on anything else" prosecutions in a few decades as inflation works its magic. Hard coding dollar amounts into law is beyond stupid. At least it's a civil infraction so you should only get a fine in most cases. (I'm making the charitable assumption that having the amount decrease over time was not intended).

Hardcoding dollar amounts into law isn't so bad because future laws can update them. For example, a future law might say "All dollar amounts put into law more than 10 years ago are hereby doubled". The UK has a similar system for fines. Laws are written that if a particular offence occurs, a "Band A fine shall apply", and a separate bit of regulation says what each band of fine or punishment entails.

>Hardcoding dollar amounts into law isn't so bad because future laws can update them.

Sure, but we all know that never happens until a sufficient number of easy to feel sorry for people get screwed real hard. Those people are getting needlessly screwed because the legislators were lazy. For example, most states have felony charges as an option for vandalism over a certain dollar amount, in some states these dollar amounts are low. This results in teenagers getting threatened with felonies (and the charges inevitably stick sometimes) because cleaning up their mess cost a few hundred bucks. That is a level of draconian-ness that is not ok in a free society.

Re: NY Payroll Company Vanishes with $35M

#90

Post by isostatic »

dsfyu404ed wrote: post #88
isostatic wrote: post #85

Earlier quoted context omitted.

How do you have to "go out of your way" to follow a law which says "don't take stuff you don't own"?

Read the cited law. It says you are obligated to report anything you find over $100 to the police. If a bartender finds a wallet with $150 in it, sticks it behind the bar and doesn't report it and the patron comes back alleging it had $200 in it he/she could get screwed. I'm sure you could come up with other examples. The point is that using a specific dollar amount is stupid. Give it some time and $100 will be a lot…

Bartender could simply leave it alone
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