Ex-Castleton CFO gets two and a half years in prison

He's ordered to pay $7.9 million

Staff WriterSeptember 18, 2009 

The former chief financial officer of the defunct Castleton Group has been sentenced to 2-1/2 years in prison and ordered to pay $7.9 million in restitution.

James O. McLamb Jr. of Raleigh pleaded guilty in June 2008 to conspiring to defraud the U.S. government after federal prosecutors began a tax probe of the former Raleigh human resources company.

Castleton owed the IRS at least $8 million when the company collapsed after failing to obtain a mandatory state license. McLamb pleaded guilty to a felony charge of "unlawfully, willfully and knowingly" conspiring to mislead the government by falsifying forms filed with the IRS.

His guilty plea was part of a negotiated settlement that included cooperating in the investigation. His sentencing, handed down last week, had been delayed while he worked with investigators.

McLamb's sentence includes three years of supervised release following his prison term.

Efforts to reach McLamb's attorney, Joseph B. Cheshire V, were unsuccessful.

McLamb filed for bankruptcy in June. In July, the N.C. State Board of Certified Public Accountant Examiners revoked his license to work as a CPA. To date, McLamb is the only Castleton executive to be charged with a crime.

Suzanne Clifton, the company's founder, filed for bankruptcy protection in March. The court-appointed trustee handling the company's liquidation alleged in a lawsuit that Clifton withdrew $3 million from the company before its bankruptcy.

Clifton has maintained that Castleton's problems were created by McLamb.

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