Indiana-based payroll company seeks bankruptcy protection

Indiana

ELKHART, Ind. (AP) — An Indiana-based payroll processing company has filed for Chapter 11 bankruptcy protection, blaming its financial woes on a “complex scheme” orchestrated by its founder.

Interlogic Outsourcing Inc. sought Chapter 11 bankruptcy protection Saturday in documents filed in federal bankruptcy court in South Bend.

The move comes amid efforts to sell the company, which handles payroll and other human resources services for thousands of clients nationwide.

The Elkhart-based company is now led by consultants brought in to restructure it after its founder and owner resigned as CEO.

Najeeb Khan stepped down last month after Keybank sued him and Interlogic in federal court in Cleveland, alleging fraud and breach of contract. The complaint accuses Khan of fraudulently initiating $122 million in wire transfers through KeyBank without sufficient money to cover those transactions.

Fort Wayne-based Turnstone was caught in the aftermath of the scandal, leaving the non-profit with an unexpected $50,000 tax payment. Turnstone CEO Mike Mushett told WANE 15 that Interlogic Outsourcing failed to pay federal, state and local employee taxes for one payroll cycle.

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