Sacramento County has terminated its contract with a Hauppauge payroll processing company that apparently failed to pay $17 million in federal income taxes on its behalf.
The company, Ingentra HR Services, owns a defunct payroll company that filed for bankruptcy in 2006 and left 600 clients with more than $6 million in unpaid tax bills.
Beginning in October 2004, Sacramento County hired Ingentra - formerly known as Humanic Solutions Inc. - to debit federal and state payroll tax payments for employees of its 76 special districts and forward them to the governments.
Wanda Dark, a spokeswoman for the California county's Internal Services Agency, said the Internal Revenue Service informed the county on May 12 that federal taxes were not fully paid for the final quarter of 2007. "It appears that they did not pay $17 million in taxes," she said.
As soon as the county verified the problem, Dark said, it notified the company that the contract would be canceled as of July 3. "We're currently working with the IRS, the FBI and the U.S. attorney's office," she added.
Efforts to reach representatives of Ingentra or its president, Albert Cipoletti, on Friday were unsuccessful.
Ingentra bought Hauppauge-based Total Time Solutions Inc. in November 2005, according to court documents. Total Time Solutions filed for bankruptcy in July 2006.
Unaware of the case, Sacramento County renewed its contract with Ingentra as recently as September 2009.
Leslie Berkoff, a Garden City attorney representing the trustee in the bankruptcy case, said, "Not all the money that got taken in made it to where it should have." Taxes "weren't paid at all, or they weren't paid on time."
She said the parties were negotiating a settlement.