The state's insurance commissioner, John Oxendine, announced that he has directed his fraud unit to investigate M. Clark Fain III. The probe comes after an Oct. 27, 2009, order signed by a Fulton County Superior Court judge, forcing SEUS into liquidation due to insolvency and naming Oxendine as the company’s liquidator.
According to the insurance department, SEUS had about 209 workers’ compensation policyholders at the time of liquidation and was first licensed as a captive insurer in November 2001.
“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 in a statement. “I can only compare the bookkeeping methods of the company to those of Enron.”
Analysts with the Georgia Department of Insurance became suspicious of SEUS after learning the company engaged in a questionable transaction regarding a hunting club under its ownership in Seminole County, Ga. SEUS unwound that transaction after a request by Oxendine, but the department also discovered that the insurer was overstating assets while significantly understating liabilities, according to regulators.
Oxendine called SEUS’ actions “a case of corporate greed” and noted that the company’s “questionable accounting” has had “a huge negative impact on the lives of decent, innocent lives.”
As liquidator of SEUS, Oxendine is authorized to sell off the company’s assets and pay claims. Under the order, SEUS is also banned by any further business.
The company’s website no longer features contact information and simply features links to the consent order of liquidation and liquidation claim forms.