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CEO accused of skimming $3M from bankrupt firm

Posted November 7, 2008

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— The owner of a company that administered payroll and benefits for about 100 small and mid-sized firms in the Triangle withdrew more than $3 million from the firm as it spiraled into bankruptcy, according to a lawsuit filed Thursday.

Richard Sparkman, the trustee appointed to handle Castleton Group's bankruptcy, sued Suzanne Clifton to try to recoup some of the suspected missing money to repay creditors.

Castleton went out of business suddenly last December amid state and federal investigations into its finances. The state Department of Insurance determined the company's liabilities exceeded its assets by $6 million and that at least $8 million ii collected in payroll taxes from client companies's workers was never remitted to the Internal Revenue Service.

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's former chief financial officer, James McLamb, pleaded guilty in June to conspiring to defraud the U.S. government. Authorities said McLamb collected federal withholding taxes from employees of Castleton's clients and then provided the IRS with phony information so the company could keep the money.

At a Bankruptcy Court hearing in February, Clifton blamed McLamb for the company's financial problems, saying she had no knowledge anything was wrong until a few weeks before the company shut down.

Sparkman's suit alleges Clifton used Castleton as a private bank account to pay some of her personal debts and to finance "her extravagant lifestyle." She also used transfers between Castleton and Executive Staffing Group, a temporary employment company she owned, to cover up some of the withdrawals, according to the suit.

"(Clifton) took no action to shore up or boost the finances of (Castleton). She merely continued or allowed to continue the wholesale raiding of the trust fund taxes," the suit alleges.

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  • pugchewtoy Nov 13, 2008

    This doesn't make sense. One guy (McLamb) has been convicted, but your article says nothing about any Federal charges against Clifton..... just a lawsuit to recover money that someone else has admitted to stealing.
    Another thought...... these companies all have outside auditors reviewing their books. Your article doesn't mention anything about outside auditors facing charges, so there must be none pending. Surely the Feds by now have had plenty of time to go through their work.
    For example.....should Donald Trump be held accountable if a trusted CFO of his decides to steal? Should Trump know what stealing is going on in his companies?
    Something isn't right here, and more information needs to be provided before any smearing takes place.

  • Jerzyjoe Nov 13, 2008

    It says money was being transferred between Castleton and Executive Staffing which she "owned" but my company still gets people from Executive? Did she sell the company? If not, how are they still in busines?

  • happymom Nov 7, 2008

    Outrageous!

    I hope she and her "financial officer" spend a very long time in a very small cell.

  • swd Nov 7, 2008

    Suzanne Clifton Named 2007 Enterprising Woman Of The Year
    http://www.prleap.com/pr/70735/

  • teacher-mom Nov 7, 2008

    Looks like another one bites the dust.

  • Hey yuall Nov 7, 2008

    Hope she is convicted and serves a nice long sentence....what a rotten individual!!!

  • Evil one Nov 7, 2008

    She was "skimming" with a 5 gallon bucket.