Local News

Clients Furious After Benefits Provider Closes

Posted December 21, 2007

— Employees at about 100 small and mid-sized companies in the Triangle have to spend the holidays worrying about health insurance coverage after the contractor that handled their payroll and benefits administration closed unexpectedly.

The workers also might have to pick up the cost of any recent medical procedures, including surgeries, because Castleton Group isn't available to pay the bills.

Castleton ceased operations Tuesday as state federal authorities launched investigations into the company's finances. The state Department of Insurance determined the company's liabilities exceeded its assets by $6 million and that at least $8 million in payroll taxes were never paid to the IRS.

Neither Castleton owner Suzanne Clifton nor her attorneys returned repeated phone calls for comment. Clifton, who boasts of her business background and community accolades on the company Web site, also didn't answer the door at her Cary home.

"I'm very upset," said Jamie Rhodes, one of about 3,500 area employees whose health benefits were handled by Castleton.

Despite paying all her health insurance premiums, Rhodes found out that she likely will have to pay for her recent $15,000 knee surgery because Castleton can't pay the hospital or the surgeon.

"I couldn't do it right now. I mean, that's devastating," she said. "You're scared to death. I have a 5-year-old son also who's supposedly on this plan with me, and children get sick a lot."

Castleton's demise could spark a slew of civil suits by workers left uninsured. That would be in addition to the criminal investigations.

"The federal government is one of a number of creditors who get stuck when things go wrong with a company. It's just that, unlike other creditors, the federal government can put you in jail," said corporate attorney Jim Verdonik, who isn't involved in the Castleton case.

Turner Revels, who used Castleton to handle payroll and benefits for the 100 employees at Quality Equipment and Revels Tractor in Fuquay-Varina, said he hopes he can line up insurance for everyone by Jan. 1.

"It's a real blow to your whole being of trusting in people and trusting in business and doing the right thing," Revels said.


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  • yg58 Dec 23, 2007

    That's what companies get for outsourcing Human Resources! I feel sorry for all of the individuals affected, though.

  • peoinsider Dec 23, 2007

    Unfortunately people have short memories. I just hope Suzanne Clifton and Patty Briguglio at MMI aren't allowed to resurface a year from now to scam more people. The other problem is the lack of hard news....it's all about press releases nowadays. This story took almost 2 weeks to make it only WRAL.... Apparently thousands of triangle employees defrauded the week before Christmas isnt as interesting a story as stuff like "Man Pays for New Truck With Loose Change ."

  • is_it_correct Dec 23, 2007

    Why isn't this on the front page anymore? This needs to go back up there-- more people need to hear about this corruption!

  • AKA PikeMom Dec 22, 2007

    Totally Sick!

  • john283594 Dec 22, 2007

    It is ok, peoinsider...I hope everything works out for you.

  • peoinsider Dec 22, 2007

    whoops. sorry - that wasnt supposed to be one sentence. Didnt realize my list would be crammed into one line. Arg.

  • peoinsider Dec 22, 2007

    What are the people going through? Let me give you a short list:
    Not sure if their next paycheck will come (hmm, XMAS shopping?)
    Not sure if they have healthcare insurance
    Not sure if the money they put into 401K actually got there
    Wondering if their Social Security had been paid
    Hoping it doesnt have a huge impact on their company/job
    Not sure if they can get healthcare in the future Mad at their boss for hiring this service provider Mad at the "kit-gloves" used for white collar criminals Mad at the other local groups that propped up this fake in the name of "woman-owned" business Wishing it wouldnt be happening days before XMAS

  • nc resident Dec 22, 2007

    Human Resource Manager, lifetime Woofpack member......who in the world fell for this as a Legit buisness and if they can't handle their HR buisness, why are they in buisness anyway...live and learn....Scam and Scram

  • Scarecrow Cow Dec 22, 2007

    How awful! I can't even imagine what these people are going though right now.

  • ladyblue Dec 22, 2007

    This is a bad do do mess. I smell some stink on the way and a federal bailout. Mercy. When will white colar crimes start paying for their mistakes.