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Ex-CFO of bankrupt benefits firm sentenced to prison

Posted September 9, 2009

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— The former chief financial officer of a bankrupt payroll and benefits company was sentenced Wednesday after pleading guilty to tax fraud.

James McLamb, 42, of Raleigh, was sentenced to 2½ years in prison and ordered to pay nearly $8 million in restitution.

McLamb was CFO for Castleton Group, which administered payroll and benefits for about 100 small and mid-size companies in the Triangle. Castleton shut down suddenly in December 2007 amid state and federal investigations into its 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.

Castleton owner Suzanne Clifton has blamed McLamb for the company's troubles, but she has been sued by the company's bankruptcy trustee, seeking to recoup some money to repay missing creditors. The suit alleges that she withdrew $3 million from the firm as it spiraled into bankruptcy.

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  • WRALblows Sep 10, 2009

    "Per the N&O,, didn't Clifton have cancer while this was going on?"

    No. It's my understanding her cancer was in remission a few years before these escapades were underway.

  • WRALblows Sep 10, 2009

    "Good morning genius. This was a federal sentence"

    "EITHER WAY GENIUS THE CRIME WAS STILL COMMITTED IN NORTH CAROLINA. IGNORANCE IS NOT A GOOD LOOK ON YOU!!!"

    ---------------------------------

    You do realize the state of NC has nothing, zero to do with federal sentencing guidelines? Obviously not, or your first comment wouldn't have bashed the state for the sentence stating "Criminals if you want to commit a crime and NOT do the time, DO IT IN NORTH CAROLINA!!!!"

    The sentence would have been the same in any state...genius. Glad my good looking "ignorance" could be of service to you.

  • Its My Prerogative Sep 10, 2009

    "Good morning genius. This was a federal sentence"

    EITHER WAY GENIUS THE CRIME WAS STILL COMMITTED IN NORTH CAROLINA. IGNORANCE IS NOT A GOOD LOOK ON YOU!!!

  • WRALblows Sep 10, 2009

    Now here's what else happened at the sentence, straight from Jay's wife Susan:

    http://toddsingleton.net/chronicle/?p=489

    "Jay’s sentencing was held this am. He was sentenced to 30 months. He will not be asked to report any earlier than January 15, 2010. He has not yet been given the credit for his cooperation because the ongoing investigation is not far enough along. We are hopeful the prosecution will ask for a downward departure prior to his report date due to his ongoing full cooperation." - smclamb

  • WRALblows Sep 10, 2009

    "Criminals if you want to commit a crime and NOT do the time, DO IT IN NORTH CAROLINA!!!! This is sad. They BOTH took hard earned money from working North Carolinians and one gets a PAT on the back and the other get a SLAP on this wrist!!!"

    Good morning genius. This was a federal sentence.

  • affirmativediversity Sep 9, 2009

    Maybe she gave that 3 million to Dem Charlie Rangle...I hear he just suddenly discovered he mysteriously has that exact amount of money extra in a couple of bank accounts.

  • james27613 Sep 9, 2009

    Is there a country club somewhere that all test ex-ceo/cfo/cio etc go to hang out after they get out of prison ?

  • wat63 Sep 9, 2009

    "Per the N&O,, didn't Clifton have cancer while this was going on?"
    timbo

    So you're saying cancer is a license to steal? How nice.

  • foetine Sep 9, 2009

    Suzanne Clifton needs to quit hiding behind Jesus and face the people she ripped off with her little scam. Cancer isn't good enough of an excuse for thieves like her.

  • Its My Prerogative Sep 9, 2009

    **NEWS FLASH**
    Criminals if you want to commit a crime and NOT do the time, DO IT IN NORTH CAROLINA!!!! This is sad. They BOTH took hard earned money from working North Carolinians and one gets a PAT on the back and the other get a SLAP on this wrist!!! WOOOOW!!!! I am soooo ashamed to even call North Carolina my HOME anymore!!!

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