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Ameripay Owner BultmeyerPleads Guilty in $10.2 Million Fraud in New Jersey

An owner of Ameripay LLC, a New Jersey payroll services company, pleaded guilty today to defrauding public and private clients of $10.2 million.

Paul Bultmeyer, 70, entered his plea in federal court in Newark, New Jersey, where he admitted that from December 2004 to last May he defrauded clients in Ameripay, which handles payroll and tax withholding services for employers. Ameripay co-owner Arthur Piacentini, 50, pleaded guilty on May 5,

Bultmeyer and Piacentini owned Ameripay along with Sherbourne Capital Management Ltd. and Sherbourne Financial Ltd. Bultmeyer, an attorney from Upper Saddle River, New Jersey, pleaded guilty to conspiracy to commit wire fraud and admitted that Ameripay diverted money to cover its payroll and tax obligations.

“Paul Bultmeyer and Arthur Piacentini diverted millions of dollars Ameripay clients sent to Ameripay to satisfy the payroll obligations of other payroll clients or to make unrelated tax payments,” prosecutors said in a court filing today.

Bultmeyer admitted that he and Piacentini solicited Sherbourne clients to raise money to send to cover Ameripay’s operation. The men falsely claimed to Sherbourne investors that their money would be invested in private placement debt, high- grade corporate bonds, preferred stock and government securities, Bultmeyer admitted.

Gerald Krovatin, Bultmeyer’s attorney, said outside the courtroom that the government’s estimate of the loss at $10.2 million is overstated. Bultmeyer was arrested in May 2009.

‘Cooperating From Day One’

“Paul’s been cooperating from Day One,” Krovatin said.

The Securities and Exchange Commission sued Bultmeyer and Piacentini last May, claiming they targeted retirees.

Rather than invest the retirees’ money, the two men moved more than $830,000 to Ameripay to handle payroll for “dozens of municipalities and private companies located mostly in New Jersey,” the SEC said in court papers.

“By commingling the fraudulently raised investor funds with the accounts of the payroll services company and its clients, the defendants jeopardized both investor funds” and Ameripay’s clients, putting them at “grave risk,” James Clarkson, then-acting director of the SEC’s New York office, said in a statement at the time.

Today, U.S. District Judge Jose Linares scheduled Bultmeyer for sentencing on Sept. 1. The judge allowed him to remain free on bail of $500,000. Bultmeyer faces as long as 20 years in prison.


The New Jersey municipalities that deposited with Ameripay included Clifton, Summit, Florence, Upper Saddle River and Vernon, as well as Sussex County and the Dover Board of Education, according to the SEC memo.

The offices of Sherbourne Capital and Ameripay are in Rochelle Park, New Jersey.

Sherbourne Financial was incorporated in Belize in 2002. It listed an address in the Bahamas and one in London that the Financial Services Authority in the U.K. describes as a “known virtual office provider for boiler rooms and unauthorized entities,” according to the SEC.

The case is USA v. Bultmeyer, 09-mj-06093, U.S. District Court, District of New Jersey (Newark). The civil case is Securities and Exchange Commission v. Sherbourne Capital Management, 09-cv-2302, U.S. District Court, District of New Jersey (Newark).

To contact the reporter on this story: David Voreacos in Newark, New Jersey, at

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