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Report - Embattled PEO's exec asked to leave council

January 16 2008

The president of Raleigh NC professional employer organization The Castleton Group, Suzanne Clifton, was asked step down from the North Carolina Professional Employer Organization Advisory Council, the Raleigh NC-based News & Observer newspaper reported. The Castleton Group ceased operating on Dec. 19, according to the North Carolina Department of Insurance, and has since filed for bankruptcy.

The Department of Insurance said on Dec. 4 that The Castleton Group's financials dipped to the point of insolvency with its liabilities exceeding its assets by some $6 million and that would affect the company's 89 clients, which included approximately 3,000 employees. In addition, the department reported at the time that evidence showed the company's former chief financial officer admitted to filing false federal payroll tax reports, resulting in an estimated $8 million in unpaid federal payroll taxes.

The Castleton Group had been in a dispute with the department since mid 2005. The PEO had never been licensed under a 2005 law, but it was able to keep operating pending the resolution of its licensing dispute, according to the department.

Clifton today declined to comment on the situation at this time.

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