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Georgia opens criminal probe of former CEO of insurer

Posted On: Jan. 6, 2010 12:00 AM CST

ATLANTA—Georgia Insurance Commissioner John Oxendine has opened a criminal investigation into the business practices of the former CEO of Southeastern U.S. Insurance Inc.

The investigation of M. Clark Fain III comes after the October liquidation of SEUS, a workers compensation insurer that first was licensed in 2001 as a captive insurer.

The department said it found that the insurer was “overstating assets while significantly understating liabilities” in the inquiry started by what it called a “questionable transaction” regarding a hunting club that SEUS owned.

“I can only compare the bookkeeping methods of the company to those of Enron,” Commissioner Oxendine said in a Tuesday statement announcing a fraud unit investigation he ordered of Mr. Fain's business practices.

SEUS had roughly 209 workers comp policyholders when a judge ordered it into liquidation, the insurance commissioner said.