Benefits firm's finance chief charged

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."

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Latest Comments

foetine, I hope you are kidding. Why would someone have a phone book from 15 or 20 years ago and with the technology of today, aka the internet, or a current phone book I think a person with any common sense whatsoever could find current, up-to-date info. It would be a case of a stupid ex-employee to go and attack the old house. I think your friends need to loosen up a bit. I don't think they have anything to worry about.

GetaLIFE
April 30, 2008 3:16 p.m.

Admiral is correct. But not only is Castleton on the hook, there may be situations in which individual employees file their personal taxes and request a refund. A la, I owe $100, but had $150 in withholding, I want a refund of the $50. The IRS can say no, we never received any withholding for you - you owe us $100. Withholding is a trust tax, but the individual still has to meet their personal obligation. This could get real ugly.

Garnerwolf1
April 30, 2008 2:51 p.m.

I know someone who lives in Suzanne Clifton's old house. They live in fear that an upset, ripped off worker will use an old phone book to hunt her down and attack the house that hasn't been her home in decades.

foetine
April 30, 2008 2:37 p.m.

Suzanne Clifton is a puppet - a worthless puppet who looked good in the company brochures. She needs to just admit that she's as dumb as a sack of hammers and had about as much to do with her company as the little red head girl has to making a Wendy's Burger.

Where has all this money gone? Millions missing and she doesn't seem to want to do a thing except receive prayers from her "friends."

foetine
April 30, 2008 2:35 p.m.

Fancy furniture and posh quarters doesn't necessary reflect solid financial footings and practices by the organization. I would rather work in a shack, that is a financialy sound company has, than be in a skyscraper with a not so sound company occupies.

twixandbetwwen
April 30, 2008 2:16 p.m.