An Indianapolis man pled guilty Friday to federal charges stemming from his scheme to defraud which caused losses of $9.4 million to clients of his payroll service business and the IRS. 50-year-old David L. Downey ran a payroll services business in Indianapolis under the name Time Payroll from 2013 to 2017. He had clients in Indiana, Illinois, Kentucky and Missouri. He admitted that he deflected money from his clients’ accounts to his Charles Schwab brokerage accounts and failed to pay substantial amounts of those client funds to the IRS for the clients’ employment taxes. Over the course of the scheme, he misapplied some $20 million into his day-trading accounts at Charles Schwab and returned only $11 million of those funds to the IRS for employment taxes. He admitted to a loss to the clients and to the IRS of $9,428,160. Downey plead guilty to one count of wire fraud relating to the wire transfer of the HFRS funds in September, 2015 and one count of federal employment tax evasion relating to the HFRS employment tax liability for the third quarter of 2015. He admitted that he attempted to evade $243,913.59 in HFRS employment taxes for that quarter. Downey also pled guilty to a passport fraud charge relating to his efforts to obtain a passport in his brother’s name in San Diego in the fall of 2018. Downey faces a possible prison sentence of 72 months plus fines up to $750,000. He will also be subject to an order of restitution in favor of his clients and the IRS.