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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of California

FOR IMMEDIATE RELEASE
Wednesday, July 25, 2018

President Of Pinnacle Workforce Solutions Sentenced To Prison

SAN JOSE – John McEwan was sentenced yesterday to over five years in prison, announced Acting United States Attorney Alex G. Tse and Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett. 

McEwan pleaded guilty on March 20, 2018 to one count of wire fraud.  According to the plea agreement McEwan admitted to owning and operating a payroll processing company called Pinnacle Workforce Solutions (Pinnacle).  Pinnacle provided various payroll services to its customers, including distributing wages to employees, preparing employee paycheck withholdings, and paying income taxes.  In order to provide these services for its customers, Pinnacle withdrew funds from its customers’ bank accounts, and had access and authorization to initiate wire transfers from its customers’ bank accounts.  

In his plea agreement, McEwan further admitted that, in as early as 2009, Pinnacle was operating at a financial loss.  During this period of time, McEwan wired funds out of his clients’ bank accounts and used them in unauthorized ways.  Specifically, McEwan paid one client’s payroll with funds he took from another client.  Pinnacle’s customers assumed that McEwan was continuing to handle their payroll and withhold and pay taxes on their behalf.  Instead, through his guilty plea, McEwan admitted that this was not the case.  In total, McEwan took and misspent approximately $6,916,256/48 from his customers.  

McEwan, 69, of Seaside, California, waived indictment and was arraigned on an information on November 15, 2017.  He was charged with a single count of wire fraud for electronically transferring funds out of one of Pinnacle’s customer’s bank accounts without authorization.   

The sixty-three month sentence was handed down by The Honorable Beth L. Freeman, U.S. District Court Judge, following a guilty plea to one count of wire fraud in violation of Title 18, United States Code, Section 1343.  Judge Freeman also sentenced the defendant to a three-year period of supervised release. Judge Freeman scheduled a hearing for October 2, 2018 to determine the amount of restitution McEwan will be ordered to pay.  The defendant will begin serving the sentence on October 5, 2018.  

Jeff Schenk is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Laurie Worthen.  The prosecution is the result of an investigation by the FBI, the Monterey County District Attorney’s Office, and the Monterey County White Collar Crime Task Force. 
 

Updated July 25, 2018