Why did the conman buy a fleet of luxury cars? Because it was easier than finding parking for a Bentley and a cafe. While the joke might seem amusing, there’s nothing funny about how Mickey Lee Wagner scammed his way to $5 million, leaving businesses and identity theft victims in his wake. Let’s dive into how this daring scheme unfolded and what we can learn from it to protect ourselves.
In an elaborate fraud scheme, a career scam artist exploited a loophole in the payroll system used by factoring companies to steal $5 million. By submitting fake invoices and using stolen identities, Mickey Lee Wagner turned his temporary staffing company into a cash machine, splurging on luxury cars, cosmetic surgery, and even a cafe.
How It Works:
Wagner’s scam began with a simple but effective tactic: creating a fake temporary staffing company, Right Step Staffing. He entered a contract with a factoring company, Prosperity Funding Inc., which provides upfront cash to businesses waiting on payments from clients. Factoring companies help smooth cash flow, fronting the money and then collecting from the businesses’ clients later.
Wagner submitted invoices for employees he never provided to companies like Kroger, Duracell, and Clorox, using stolen identities to make the fake payroll look legitimate. Over seven months, he created $6 million worth of fake invoices, pocketing $5 million before Prosperity Funding uncovered the fraud.
Who’s Targeted:
This scam primarily targeted factoring companies, which often deal with small- and medium-sized businesses facing cash flow gaps. The scam was especially harmful to businesses relying on these companies for payroll support, and individuals whose identities were stolen to create fake employee profiles were also victims.
Real-Life Example:
Mickey Lee Wagner’s history of fraud spans decades, including past convictions for similar crimes. After going on the run when initially charged, he was finally caught in Kansas City, Missouri. Prosecutors revealed he had also scammed another factoring company out of $750,000 during his time on the lam.
FBI agent Keri Farley stated, “Wagner took great measures to create the fraudulent billing scheme to use these companies like his personal ATM.”
Why You Should Care:
This scam shows how even sophisticated financial systems can be exploited, and the consequences are severe. For businesses, a scam like this can drain millions, cause operational delays, and tarnish their reputation. On a personal level, identity theft victims may face credit issues, legal trouble, and years of untangling the mess created by fraudulent activity in their names.
How to Protect Yourself:
- Verify Contracts and Clients: Factoring companies should implement strict verification processes to confirm that contracts and invoices are genuine.
- Track Employee Payroll: If you’re in a business that provides staffing, ensure all employees’ identities are verified, and payroll records are regularly audited.
- Watch for Red Flags: Sudden large transactions, changes in billing patterns, or new clients who seem too good to be true could signal a fraud attempt.
- Monitor Personal Information: Individuals should use credit monitoring services and place alerts on their credit reports to catch any misuse of their identity early.
- Implement Strong Fraud Detection: Factoring companies should invest in advanced fraud detection tools to flag suspicious invoices or payroll inconsistencies.
Quick Tips & Updates:
- Did you know? Factoring companies often provide quick cash for businesses waiting on invoices. But without proper fraud detection, they can be exploited by scammers like Wagner.
- Pro Tip: Always cross-check invoices with the actual work being done. If a business claims to provide services to big-name companies like Kroger or Clorox, don’t just take their word for it—verify with the companies themselves.
Have you ever encountered a scam that made you question its legitimacy? Hit reply and share your story with us. Your experience might help someone else avoid falling into a similar trap!
Scammers like Wagner might be crafty, but by staying vigilant, verifying invoices, and monitoring personal and business data, we can keep fraudsters from using our businesses like personal ATMs.
Stay safe, stay informed,
Key Terms Explained:
- Factoring Company: A business that buys unpaid invoices from other companies to help them manage cash flow.
- Payroll Fraud: The act of manipulating payroll data to steal money from a business or financial institution.
- Identity Theft: The illegal use of someone else's personal information for financial gain.
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