Georgia Insurance Commissioner John Oxendine has begun a criminal investigation into the business practices of M. Clark Fain, III, the former chief executive officer of Southeastern U.S. Insurance, Inc. (SEUS), a workers’ compensation company.
The investigation follows an Oct. 27 order signed by Fulton County Superior Court Judge Thomas R. Campbell, Jr., ordering SEUS into liquidation and naming Oxendine as the liquidator.
“After reviewing financial transactions made by the company, I find no other recourse but to open a criminal investigation into the actions of Mr. Fain,” Oxendine said. “I can only compare the bookkeeping methods of the company to those of Enron.”
Department analysts became suspicious of SEUS when they learned that the company had engaged in a questionable transaction regarding a hunting club that it owned in Seminole County. At Oxendine’s insistence, SEUS unwound the transaction.
However, the department also discovered that the company was overstating assets while understating liabilities.
“Indications are that this is a case of corporate greed,” Oxendine said. “The questionable accounting engaged in by the company ultimately has a huge negative impact on the lives of decent, innocent citizens.”
Oxendine’s office is authorized to sell off the company’s assets to pay claims. The court order also banned further business by the company.
SEUS had approximately 209 policyholders at the time of the liquidation. The company was first licensed in November 2001 as a captive insurer.
Topics Georgia
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