THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, May 18, 1995 TAG: 9505180719
SECTION: LOCAL PAGE: B4 EDITION: NORTH CAROLINA
SOURCE: ASSOCIATED PRESS
DATELINE: RALEIGH LENGTH: Short : 50 lines
Insurance Commissioner Jim Long is the target of a federal investigation based on documents provided by a man convicted of fraud after an inquiry by Long's office, a newspaper reported Wednesday.
U.S. Attorney Janice McKenzie Cole of Raleigh asked the FBI to investigate allegations of improprieties in the Insurance Department. She did so after receiving documents from William Shackelford, the former head of Interstate Casualty Insurance Co. of Kinston, The Charlotte Observer reported.
Shackelford, 59, and Interstate's vice president, Bobby Gray, a former examiner with the department, were convicted in 1991 of siphoning $24 million from now-defunct Interstate. They are serving eight-year sentences for fraud at the federal prison camp at Goldsboro.
Long is being investigated for payments of $1.2 million to a private attorney, his shutdown of Interstate, and allegations that the jobs of his wife and ex-wife have put him too close to companies he monitors, the newspaper said.
Long, 55, the state's top insurance regulator for 10 years, said his office has heard nothing from the FBI and said its investigation sounds like ``standard procedure.''
In a statement Wednesday, Long said Shackelford ``is bitter over the department's assistance to federal prosecutors in the Interstate case.
``He refuses to accept responsibility for his actions and has vowed revenge for his incarceration. He and other family members have made a continuing series of threats against me and members of the department. His latest allegations are yet another sad attempt to carry on his personal vendetta.''
Federal officials declined to be interviewed by The Observer.
The allegations - which also have been mailed to some legislators - come as Long is trying to fend off legislative attempts to cut off his control of the Insurance Consumer Protection Fund. A bill to transfer control of the fund to the attorney general is pending in the Senate.
The fund was set up by the General Assembly in 1990 to provide money for analyzing rate increases, fighting insurance company lawsuits and recovering lost assets of defunct companies.
As commissioner, Long has controlled the fund. His department has 360 employees and a $25 million-a-year budget to monitor and regulate 1,400 insurers. by CNB