ANGOLA, Ind. (WLKI)- A key piece of the PayServ Systems LLC financial scandal moved closer to resolution July 6 when former chief financial officer Heather Anne David pleaded guilty in U.S. District Court to seven counts of wire fraud.
David, who worked as CFO for the Angola-based human resources management company, admitted to making seven fraudulent transfers through a company credit card account in 2024. Her plea comes as PayServ continues to face civil litigation from several former clients who allege they collectively lost millions of dollars after the company disclosed a major financial shortfall in December 2024.
The case was reported by KPC Media, based on court documents and filings related to the criminal and civil proceedings.
PayServ was founded in Angola by Todd and Traci Saylor in 2003. The company provided payroll and human resources services, including management of payroll expenses and tax liabilities for its clients. David served as the company's chief financial officer and had access to PayServ bank account and routing information, as well as three company credit cards.
According to the affidavit filed in David's criminal case, prosecutors allege that between Jan. 7, 2016, and Dec. 12, 2024, David knowingly participated in a scheme to defraud the company through false representations and fraudulent transactions.
Investigators allege that approximately $874,492.98 was diverted through credit card transactions. An additional $26,386.99 was allegedly taken through company checks made payable to David.
Seven transactions admitted in plea
As part of her plea agreement, David admitted to seven specific wire fraud transactions involving a company credit card in 2024.
The transactions were:
- May 28: $10,511.64
- June 10: $11,077.15
- July 22: $10,168.80
- Aug. 19: $6,514.12
- Sept. 10: $3,617.45
- Oct. 15: $9,872.50
- Nov. 8: $7,473.59
Together, the seven transactions totaled more than $59,000.
Each wire fraud count carries a potential maximum sentence of 20 years in federal prison. Under the plea agreement, David is also required to pay $59,235.25 in restitution and an additional $118,470.50 in fines, representing twice the gain derived from the offenses.
By pleading guilty and giving up her right to a jury trial, David may qualify for a reduction in her federal sentencing guidelines range. The plea agreement provides for a possible two- or three-level reduction based on acceptance of responsibility.
The ultimate sentence will depend on the federal sentencing guidelines, David's criminal history and other factors considered by the court.
David surrendered her passport before being released Aug. 4. Her sentencing hearing has not yet been scheduled.
David's guilty plea is only one part of the broader PayServ controversy.
In December 2024, PayServ announced that nearly $8 million was missing from the company. The disclosure prompted Dunham's Athleisure Corp. and seven other companies to file a lawsuit in Steuben Superior Court.
The lawsuit was transferred to the Allen County Commercial Court in May 2025, where it remains pending. The most recent recorded action was an automated notice June 19 informing the parties that two of the plaintiffs had retained new attorneys.
The plaintiffs include businesses that relied on PayServ to handle payroll-related funds.
According to court documents, Dunham's, which operates hundreds of sporting goods stores throughout the Midwest, alleges a loss of $2,245,298.56.
Other alleged losses include:
- Jetpro, a Fort Wayne charter flight service -- $70,620.64
- AZO Services Inc., a Kalamazoo, Michigan, excavation contractor -- $615,371.56
- Pathfinder Communications Corp., a Mishawaka-based radio company -- $54,195.51
- Heartland Recreational Vehicles, Elkhart -- $225,098.51
- Cruiser RV, Howe -- $156,151.54
- The Riegseckers Inc., Shipshewana -- $126,427.56
- Blue Gate Musicals LLC, Shipshewana -- $9,688.26
The alleged losses from those eight companies total more than $3.5 million.
Following the company's collapse, PayServ CEO Todd Saylor told customers in a Dec. 17, 2024, email that David had "fraudulently diverted millions of dollars" of PayServ clients' money.
Attorneys representing plaintiffs in the civil lawsuit, however, have presented a different account of the company's financial problems. They allege the operation involved an elaborate check-kiting scheme designed to keep the company operating despite mounting financial obligations.
Those attorneys have also alleged that money was used to support a multimillion-dollar Florida home and other projects, including three self-published autobiographies.
Private emails attributed to Saylor and dated Nov. 25, 2024, indicate he was aware of serious financial problems more than three weeks before customers were notified of the collapse, according to court records.
Saylor has not been criminally charged in connection with the PayServ collapse.
In a state-court filing, Saylor acknowledged the seriousness of the situation and indicated he believed he could potentially face incarceration.
David's guilty plea establishes criminal responsibility for the seven wire fraud counts outlined in her federal plea agreement. Her sentencing remains pending, meaning the precise punishment she will receive has not yet been determined.
Meanwhile, the civil litigation brought by PayServ's former clients remains unresolved and could shed additional light on the company's financial dealings, the flow of client funds and the actions of other individuals involved in the business.
No criminal charges have been filed against Saylor as of the latest court filings referenced in the case.