Monterey payroll firm leaves workers nationwide without pay.

Dozens of businesses across the country were forced to scramble as their payroll checks bounced, leaving employees strapped for cash.

At the heart of the issue lies Monterey-based Pinnacle Workforce Solutions, a human resources and payroll firm. The company received hundreds of thousands of dollars from their clients, but failed to distribute the funds to their customers’ employees over the past week.

Pinnacle then dodged questions from their clients when the payroll issues came to light on Oct. 3. Representatives instead directed inquiries to the owner and general manager John McEwen whose voicemail was not taking messages and whose email bounced back messages.

This led to angry Facebook comments from clients across the U.S. and even more damaging, an investigation into criminal wrongdoing by the Monterey Police Department.

“We are working a case right now,” says Monterey Sergeant Ron Blair. “There’s a lot of legwork involved. We’re trying to determine if it is a criminal or a civil matter.”

In the face of rumors of immediate closure and the fear of litigation to recoup lost funds, owners and finance managers of more than a dozen Monterey Bay Area businesses showed up to Pinnacle’s headquarters Tuesday morning to demand answers.

When McEwen arrived around 9:30am, looking frail from a recent gallbladder surgery, he attempted to strike a conciliatory tone with his clients in the lobby.

“Clients, you’re like my family. I would not mess around with you,” McEwen said. “We’re going to open up lines of communication once I talk to my employees.”

The business people looking for answers were then asked to stand in the hallway as McEwen met with his employees in private. Mulling around in the corridors of the Pinnacle headquarters on Highway 68 by the Monterey Regional Airport for more than an hour, clients speculated on what went awry—from bankruptcy to fraud.

“This is a mess,” said Paolo Manca, owner of P.M. Landscaping Service in Monterey and an employer of 29 workers. “It’s affecting trust with my staff, they think that I’m the one bouncing checks.”

After an hour in closed doors, McEwen came out into the hall to address his customers, some of whom he’s known for years.

“We’re having issues but we’re not closing down,” he told a crowd of concerned faces. “I know this has been inconvenient, and it has caused interruptions and anger.”

Funds were not distributed because of problems with the automated clearing house (ACH), an electronic network for payroll and direct deposit, said McEwen. The exact cause of the disruption was not disclosed leaving customers in the room to speculate whether or not Pinnacle’s accounts were frozen or if there’s no money to be transferred.

McEwen went on to say direct deposit would not be available through Pinnacle for at least a month, but that the company can continue to cut payroll checks through their clients’ bank accounts.

For the headache, and in attempt to quell the impending exodus of his customers, McEwen said Pinnacle will offer free W-2 processing and free payroll service in January 2017.

McEwen, who founded the company in 1990, asked clients to be courteous to his staff, saying the situation was not their fault.

“Don’t Facebook their kids,” McEwen said, citing at least one instance of that occurred.

While lines of communication have opened, it may be some time before funds are reimbursed to clients and business-as-usual returns. McEwen was unsure if payroll taxes had been paid, and warned that some might receive penalty notices from the Internal Revenue Service, but insisted that Pinnacle would cover those costs.