Local News

Benefits firm executive pleads guilty to tax fraud

Posted June 3, 2008

Map Marker  Find News Near Me

— The former chief financial officer of a bankrupt payroll and benefits company has pleaded guilty to tax fraud.

James McLamb, 41, of Raleigh, pleaded guilty to conspiring to defraud the U.S. government. He will be sentenced later.

McLamb was the finance chief for Castleton Group, which administered payroll and benefits for about 100 small and mid-size companies in the Triangle. Castleton shut down suddenly in mid-December amid state and federal investigations into the company's finances.

Federal authorities said 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.

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 company's 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.

During a February hearing in bankruptcy court, Castleton owner Suzanne Clifton blamed McLamb for the company's troubles.

1 Comment

This story is closed for comments.

Oldest First
View all
  • dlb800 Jun 4, 2008

    Send the guy to prison for the rest of his life. After all, what he has done may very well affect alot of people for the rest of his life, let him (and others) know what they did was very wrong.