Tom’s Donuts Lawsuit: Fraud Claims, Asset Freeze, and Criminal Charges

The Tom’s Donuts lawsuit is actually a set of eight consolidated civil cases in Indiana against Todd Saylor, the son of the shop’s founder, and his payroll firm PayServ, L.L.C., alleging that PayServ diverted nearly $8 million in client payroll and tax funds to accounts controlled by Saylor and his wife Traci. The cases were consolidated in the Allen County Commercial Court in May 2025, the Saylors’ assets have been frozen by court order since June 2025, and court-ordered mediation is scheduled to resume on December 31, 2026.¹

What the Plaintiffs Say Happened

The first suit was filed on January 21, 2025, by Dunham’s Athleisure Corporation in Steuben Circuit Court. Dunham’s, described in the complaint as PayServ’s largest client, alleged a “multi-million dollar fraud” in which PayServ pooled client payroll money in one commingled account and then used it to plug shortfalls elsewhere and to prop up other Saylor businesses.²

The centerpiece transaction: on December 10, 2024, PayServ directed Dunham’s to wire $6,625,509.35 to cover a December 13 payroll date. Dunham’s sent the money on December 12 and 13. About $1.73 million of that was earmarked for federal, state, and local taxes. Within days, Todd Saylor told Dunham’s the company had “lost” $2,245,298.56 of the tax funds. According to the complaint, the defendants knew when they requested the wire that they would not use the money for Dunham’s taxes; instead, the funds were routed to cover other clients’ tax bills and to “pad balance sheets” at Saylor-controlled entities. Dunham’s had to pay its tax obligations out of pocket to avoid IRS penalties.³

Once the cases were consolidated, the amended complaint added an allegation that PayServ had operated an illegal check-kiting scheme. Between December 3 and December 12, 2024, plaintiffs allege nearly $3.9 million moved from PayServ’s tax account to an account held by Todd Saylor & Associates at Synovus Bank, with smaller amounts flowing to Cory Business Systems LLC, Cory Investments LLC, DNA ServStaff Inc., Staffing Services Inc., and Kara Controls LLC. Filings quote Saylor’s own journal entries referring to the process as the “check cycle.” In a December 16, 2024 entry he called “shutt down day,” Saylor reportedly wrote: “I stopped the check cycle which will leave a gapping hole for old national bank to wake up to and ultimately leave customers short some tax money owed.”¹

Who Is Suing and How Much They Want

Dunham’s opened the docket seeking $2,245,298.56 in compensatory damages plus treble damages under Indiana’s Crime Victims Relief Act, for a total of $6,735,895.68, and asked the court to stop the Saylors from liquidating assets.³

More plaintiffs followed:

In February 2025, Fort Wayne-based JetPro Pilots LLC sued over $70,620.64 in unpaid taxes, seeking treble damages of roughly $211,000 to $282,000.⁴⁵
On April 16, 2025, Pathfinder Inc. of South Bend sued over $54,195.51 in unpaid payroll costs.
On April 18, 2025, AZO Services of Kalamazoo, Michigan, sued over at least $615,371.56 in misappropriated tax funds.⁶

By the time the amended complaint was filed in Allen County, eight plaintiffs were on record and the total unrecovered funds were pegged at $7,883,062.93. The legal claims include breach of contract, fraud, constructive fraud, conversion, and check kiting.¹

How Tom’s Donuts Fits In

The donut shops themselves are not defendants, and they are no longer owned by the Saylor family. According to Steuben County property records cited in reporting, the Angola and Lake James Tom’s Donuts locations were transferred to Cory Investments LLC, a Saylor entity, in 2015, and then sold in April 2023 to Panayiotis Bourounis, owner of the Salvatori’s Eateries chain in northern Indiana.¹ Todd Saylor, who had led a rebranding of the shops and was referred to in local coverage as “The King of Donuts,” is the defendant in his individual capacity and through PayServ and the “Saylor Entities” named in the complaint.²

What the Defendants Say

PayServ’s public position, delivered through counsel shortly after the first suit, was a denial. The company said it would “vigorously contest” the claims and blamed the shortfall on “fraudulent activity by a former PayServ, LLC employee,” an apparent reference to former CFO Heather David (also known as Heather Marckel), and said it had reported the matter to law enforcement.²

Todd Saylor’s own statements have varied. In a letter later included in filings, he acknowledged a “shortfall in our bank account where our clients’ tax dollars are held” and said it was “our goal to make each and every client whole.”⁶ The Dunham’s complaint, meanwhile, quotes him telling the company he would not promise to make it whole and saying he “knows” he “is going to jail.” It also quotes him saying, “I’m selling everything. It could get me to six million.”³

Heather David, named as a defendant in the Dunham’s suit and later cases, has not been reported to have publicly responded. Plaintiffs allege she carried out the diversions at the Saylors’ direction.³ The consolidated amended complaint added another defendant: Bob Lange, a CPA with CLH CPAs & Consultants of Michigan City, who provided accounting services to PayServ and 32 other Saylor entities and joined the PayServ executive board in May 2020. Plaintiffs allege he gave technical assistance in the financial irregularities. Saylor’s journal entries suggest Lange advised him after the shortfall surfaced in November 2024 to “keep calm” and “stay the course.”¹

The Asset Freeze and Property Sales

As the suits piled up, the Saylors began selling property. The Dunham’s complaint noted the couple dropped the listing price of their primary residence by nearly $1 million after the fraud came to light.³ On March 27, 2025, the Saylors sold a home in Bradenton, Florida, for $2,675,000 to an entity called Co Plan LLC. Plaintiffs’ attorneys said the property was sold “secretly for half its value.” Ten days earlier, Cory Investments LLC had sold a Jimmerson Lake property to the same buyer for $1 million. Co Plan LLC had been registered in 2008 by Panayiotis Bourounis, the same buyer who acquired the Tom’s Donuts shops in 2023.¹

On June 27, 2025, the Allen County Commercial Court issued a temporary restraining order and injunction against Todd and Traci Saylor. The order required them to maintain the financial “status quo,” inventoried their assets, limited spending to daily living expenses, wages, and legal fees, and barred the sale of any asset worth more than $1,000 without consent from both the court and the plaintiffs. It covers real estate, vehicles, yachts, cash, investments, stocks, bonds, and cryptocurrency.¹

Are There Criminal Charges?

No. Despite the size of the alleged fraud and Saylor’s own reported comment about going to jail, no criminal charges have been filed against any of the defendants as of the most recent reporting. PayServ said early on that it had referred a former employee’s conduct to law enforcement and was cooperating with an investigation, but no indictments or arrests have been publicly announced.⁶ The Dunham’s complaint invokes Indiana criminal statutes on theft and fraud as the basis for treble damages under the Crime Victims Relief Act, but that is a civil remedy, not a criminal prosecution.³

Where the Case Goes Next

PayServ ceased payroll operations around December 18, 2024, and is described in court filings as insolvent. Its office building at 300 N. Wayne St. is listed for sale. The Saylors remain under the June 2025 asset-freeze order, and court-ordered mediation is scheduled to resume on December 31, 2026.¹

Saylor’s legal exposure has continued to grow outside the consolidated PayServ litigation. On March 27, 2026, American Express National Bank filed a separate collection action against him in Steuben Circuit Court over an unpaid business credit card balance of $160,224.53 tied to Cory Business Systems LLC.⁷

1
KPC News. PayServ Lawsuits Consolidated in Allen County Commercial Court
2
WANE. Dunham Athleisure Files Lawsuit Against the King of Donuts
3
The Post and Mail. Dunham’s Athleisure Corporation v. PayServ, L.L.C., et al. Complaint
4
WFFT. Second Lawsuit Claims Payroll Fraud From Tom’s Donuts Owner
5
KPC News. JetPro Pilots LLC Files Lawsuit Against PayServ
6
KPC News. Additional Lawsuits Filed Against PayServ
7
WLZZ Radio. American Express Files Lawsuit Against Todd Saylor