Benefits firm's finance chief charged
Posted April 30, 2008
Raleigh, N.C. — The former chief financial officer of a bankrupt payroll and benefits company has been charged with tax fraud, authorities said Wednesday.
Federal authorities charged James McLamb, 41, of Raleigh, with tax conspiracy. McLamb was the finance chief for Castleton Group, which administered payroll and benefits for about 100 small and mid-size companies in the Triangle.
U.S. Attorney George Holding said in a statement that McLamb collected federal withholding taxes from employees of the Castleton's clients and then provided the Internal Revenue Service with phony information so Castleton could keep the money. Authorities allege the fraud took place for three years, ending in January when the company declared bankruptcy.
Castleton shut down suddenly in mid-December amid state and federal 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 from client companies were never paid to the IRS.
The closure left about 3,500 area employees, whose health benefits Castleton handled, without insurance coverage and the companies that contracted with Castleton on the hook for the unpaid taxes.
Castleton owner Suzanne Clifton told a bankruptcy trustee in February that McLamb was responsible for the company's troubles.
The trustee, Richard Sparkman, called Castleton's accounting system "obtuse" and said the financial records were "deliberately structured to conceal rather than reveal."