By Bloomberg News

PITTSBURGH -- Mellon Financial Corp.'s Mellon Bank unit said this weekend it will fire or lay off 106 workers and close its tax-processing unit after finding that federal tax returns and checks sent to the company allegedly were hidden or destroyed, the Associated Press reported.

Mellon is firing those linked to the missing returns citing a memo to employees from chairman and chief executive, Martin McGuinn. The U.S. Treasury Department is investigating the disappearance of the 1,800 returns, which were sent by taxpayers in the northeastern U.S.

There was no evidence of check fraud, identity theft or improper use of taxpayer information, Mr. McGuinn stated in the memo, which didn't say where the returns are now.

Other employees from Mellon's tax-processing division will be given first priority when the bank has job openings, AP said, citing company officials.

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