MOUNTAIN HOME, Ark. - Defunct boat builder Champion Boat, Inc. of Mountain Home, Ark. is being inspected by the U.S. Postal Inspection Service and Arkansas Insurance Department concerning possible violations of the U.S. mail fraud statute, a May 30 article article in Arkansas' The Baxter Bulletin reported.
The U.S. Postal Inspection Service joined the Insurance Department in its investigation after receiving "allegations of possible mail fraud," the article said. The defunct company was already under investigation because of improper handling of money for health care insurance during business.
William Hill, postal inspector for U.S. Postal Inspection Service's Southwestern Division, explained to The Bulletin that mail fraud statute is a body of law that encompasses "any use of mail to further a scheme to defraud."
"We have allegations, or we wouldn't be doing this," Hill said.
2001 bankruptcy
Champion Boats went bankrupt on Nov. 7, 2001 after Deutsche Financial Services Inc., a major creditor of the company, "filed a petition for involuntary Chapter 11 bankruptcy against Champion on Champion's behalf," the article reported.
The collapse of Champion was "made public two months earlier when the company failed to pay employees for three weeks of work, prompting seizure of the plant by the U.S. Department of Labor Wage and Hour Division," the article reported. Employees were also discovering that money withheld from them for health insurance had not been forwarded to a health insurance carrier, so the employees had no insurance for several weeks and bills for service provided during the time of lapsed coverage.
Some former employees who suffered losses due to the company's violations have been notified and asked to provide information about "how and when employees learned they were insured and how and when they discovered insurance coverage had lapsed," the article reported. Inspectors also want to know whether or not mail was used in any matters dealing with insurance.