Sea Isle City man gets 66 months in prison for payroll fraud scheme

A 68-year-old Cape May County man was sentenced Tuesday in federal court in Trenton to 66 months in prison for running a multimillion-dollar fraud scheme involving his former payroll-service company, prosecutors said.

John Scholtz, of Sea Isle City, used money he diverted from clients of Innovative Payroll Services LLC for personal expenses, including payments for homes, cars, boats, airplanes, and credit cards. The money was intended as tax payments for his clients and at least 103 clients lost more than $8.4 million in tax deposits and more than $578,000 in associated penalties and interests from being delinquent. The clients included the city of Trenton and other municipalities, educational institutions, and small- and medium-sized businesses.

Scholtz previously pleaded guilty to one count of wire fraud and one count of transacting in criminal proceeds.