N.J. company under investigation after Trenton's tax payments vanish

TRENTON, N.J. (WPVI) -- A New Jersey company is under federal investigation after the city of Trenton says it is missing hundreds of thousands of dollars.

The FBI has been asked to join the investigation into the private vendor who used to handle the payroll for the city.

Officials in Trenton were notified by the state that the city owed taxes that they thought were paid. Now they want to know where that money went, why it wasn't paid, and how to get it back.

Back in 2009 the city of Trenton hired a company called Innovative Payroll Services to do the payroll for its roughly 1,300 employees. But a criminal investigation is now underway after the city discovered IPS allegedly withheld taxes from public worker paychecks, but never forwarded that money to the state.

The exact amount of the missing money is still unknown, and could total millions of dollars.

City Council President Zachary Chester says, "Not knowing what the amount is, whether it's a million (dollars), $800,000, that's a million or $800,000 that we don't have in our budget."

The headquarters for Innovative Payroll Services is located in an office complex in West Berlin, where law enforcement officers were on scene Thursday going in and out of the building.

The company's chief executive officer is John Scholtz, who we tried to contact by email and phone but were unsuccessful.

Scholtz has hired Philadelphia defense attorney Lisa Mathewson to represent him.

Mathewson tells Action News that she is "currently in the fact-finding process and in communication with law enforcement."

Scholtz and his wife Carole appear to have scrubbed their social media accounts since news of the investigation broke. The Trentonian has been reporting about their lavish lifestyle in Florida, allegedly including multiple homes and a photo of Scholtz in a blue Bentley.

Some Trenton residents are upset.

Calvin Cain tells us, "The owner's property should be confiscated. That Bentley and all that should be confiscated."

And Brenda Alicea says, "Definitely it should be a criminal investigation and he needs to be held accountable. It's just that simple."

Zachary Chester says, "I'm focused on the city of Trenton being made 100 percent whole."

The investigation is just in the beginning stages. If the city is held accountable for the unpaid taxes, it could mean cutbacks in services and projects.

In addition, the city of Trenton may not be the only victim. Sources tell Action News of at least one other company that dealt with IPS who has contacted authorities.