Suit: HR firm was running on empty.

• Position: Triangle. - Human resource - The Castleton Group Inc. file for Chapter 7 bankruptcy

Suzanne Clifton convinced lots of folks that she was running a successful company More than 100 businesses counted on The Castleton Group Inc. to pay their taxes and handle other human-resources matters. Several magazines gave her awards. One published tips from her under the headline "Winning ideas from Winning Women." In 2007, the company landed on Inc magazine's list of the 5,000 fastest-growing private companies in the U.S. by boosting its top line nearly 90% from 2003 to 2006, when it grossed $ 24 million.

But Raleigh-based Castleton was living on borrowed time and stolen money, according to a recent lawsuit. By the end of 2007, it would file for Chapter 7 bankruptcy, having misappropriated more than $7 million of client money intended to pay federal taxes.

Much of the money paid for Clifton's "extravagant lifestyle," according to the lawsuit filed in November by bankruptcy trustee Richard Sparkman. He says Clifton illegally took at least $3 million out of the company in the two years before the bankruptcy filing. Castleton, the suit says, has been insolvent for years. "At the very least, as of January 1, 2004, CGI's financial condition was hopeless and the company had no prospect of surviving and continuing as a going concern."

Despite that, it kept signing up customers. "Suzanne Clifton was providing assurances to Castleton...