A Mt. Juliet woman who served as the top payroll employee at a Nashville-area workforce management company is accused of quietly diverting more than $8.2 million into her personal bank account over eight years, using fake worker profiles to mask the thefts. The allegations are laid out in a civil lawsuit filed Tuesday in Davidson County Chancery Court, which has already resulted in a court order freezing her bank account and blocking any sale of her real estate.
The company, nextSource, describes itself as a workforce management firm, and according to WKRN News 2, it filed the lawsuit against its own payroll employee on October 20. The company is a certified women-led contingent workforce management firm headquartered in New York City, founded in 1998 to provide staffing administration, risk mitigation, and payroll solutions to Fortune 1000 clients across North America, according to the company's own background materials.
A $260,000 Red Flag Turns Into an $8.2 Million Discovery
The scheme first came to light on October 12, when a nextSource accounting executive noticed more than $260,000 in missing payments that had vanished over the prior two months, per the station's report. Those payments had been routed to a Tennessee bank account not associated with any known workers or clients, the outlet reported.
When confronted, the payroll employee reportedly blamed the discrepancy on a software issue, according to the complaint's allegations. The next day, she did not show up for work, and files were allegedly altered or deleted from the company's system, the same account notes.
Court documents allege the employee later admitted responsibility for the recent discrepancies directly to nextSource's owner and promised to wire back the missing money. She ultimately sent back $267,792 — but the company's internal investigation didn't stop there.
Eight Years, Nearly $8.2 Million, and Fabricated Workers
That continued investigation revealed a far larger pattern: according to the lawsuit, nearly $8.2 million had been diverted to the employee's bank account over eight years through fake employee profiles she allegedly created within the payroll system. nextSource is now asking the court to award an amount equal to the stolen funds plus additional damages, and the company alleges other individuals may have also been involved in the scheme.
The scale and duration described in the lawsuit sit well above typical industry patterns. Research cited by The Bonadio Group, drawing on the Association of Certified Fraud Examiners' 2024 Report to the Nations, finds that investigated payroll schemes typically lasted about 18 months before detection, with an average loss of $383,000 for payroll schemes — a fraction of the sum alleged here.
Thomson Reuters says a fraudster generally needs access to create an employee file and recommends controls against ghost employees, according to Thomson Reuters. Payroll provider ADP has separately recommended that organizations require in-person or phone validation for all banking and W-4 modifications, since these schemes often succeed when administrators exploit single-point email access to create phantom accounts and delete system notification emails.
Court Freezes Assets Ahead of November Hearing
A judge has already granted a temporary injunction against the payroll employee, prohibiting destruction of evidence, blocking the sale of her real estate, and freezing the bank account allegedly used to receive the diverted funds. Under Tennessee civil procedure, a plaintiff seeking this kind of emergency relief must show a substantial likelihood of success on the merits, irreparable harm without immediate action, and a favorable balance of equities.
A hearing in the case is scheduled for November 3 at 10:30 a.m. The employee told WKRN News 2 she has no comment on the case at this time.
What Could Come Next
The case remains a civil matter for now, but the dollar figure alleged puts it well within range of Tennessee's harshest theft statute. Under Tennessee law, theft of property or services valued at more than $250,000 is classified as a Class A felony, punishable by 15 to 60 years in prison and fines up to $50,000, according to a legal explainer from the Barnes & Fersten Law Firm. Tennessee law also allows prosecutors to aggregate multiple acts of theft against a single victim under one scheme into a single consolidated count, which could allow years of alleged diversions to be combined into one major charge if criminal prosecutors ever get involved.
This isn't the only multi-million-dollar payroll fraud case Hoodline has tracked this year. In a $1.5 million Florida clinic case, an internal paymaster allegedly inflated paychecks and generated unauthorized bonuses before a replacement manager caught the discrepancies. And a separate $2.2 million wire fraud scheme involving a payroll company executive who defrauded two dozen client businesses resulted in an 18-month sentence after a casino-fueled spending spree. Whether the nextSource case follows either of those paths toward criminal charges remains to be seen as the November 3 hearing approaches.
