An insurance company claims that relying on false financial statements has cost it $5.7 million.
Travelers Casualty & Surety Co. of America has filed a federal lawsuit against the CPA, H. Neal Privitt of Little Rock, who provided the financial statements in an attempt to recover the money.
Travelers was the surety bonding company for Bossler Contracting Inc. of Siloam Springs. In 2007 and 2008, Travelers issued $12.75 million worth of performance bonds for 10 of Bossler’s construction projects.
Travelers examined Bossler’s financial statements – provided by Privitt – before it issued the bonds, Travelers said in the lawsuit.
It turned out that Bossler didn’t pay all of its subcontractors and suppliers and defaulted on its obligations to complete the projects, the lawsuit said. Bossler wasn’t named in the lawsuit and its phone has been disconnected.
Travelers said it paid $5.7 million to cover performance bond claims tied to Bossler projects.
Travelers charges that Privitt knew that Bossler’s financial statements contained false information and were misleading. The insurance company is suing Privitt for fraud and professional accounting malpractice.
Privitt told us that he didn’t know about the lawsuit and couldn’t say anything about it until he talks with his attorney.
