The chief investigator of the Insurance Fraud Investigation Division of the Arkansas Insurance Department confirmed yesterday that allegations against Champion Boats are being investigated, and federal authorities are now looking into the company also.
Dave Roff, assistant director and chief investigator for the Fraud Division yesterday said, “We are aware of some complaints and allegations and we have an active investigation under way.” Champion Boats are built in Mountain Home, Arkansas.
Roff declined to be more specific about the allegations, but the Baxter Bulletin reported it had recently received reports from Champion employees alleging the company had been unable to make payroll, and that withholdings for health insurance 401 (K) contributions and wage garnishments had not been sent to the company’s insurance carrier, the retirement plan administrator or other intended recipients.
Employees have reported they have lost health insurance coverage, according to the paper. The report said that the company has employed as many as 160 during the past year; however, an unnamed employee told the paper that many workers had left in the past four months.
The paper reported today that the US Department of Labor Wage-Hour Division is also investigating Champion. The report said that employees complained that overdue paychecks had still not been issued as of Thursday.
Champion Chairman, J.D. Porthouse, and president Steve Schrenck did not return phone calls by press time. Porthouse purchased the company in 1988, and at one time his son, D.R. Porthouse, was president.
Dealers in the dark
Champion boat dealers contacted yesterday were unaware of any problems at Champion and said that as far as they were concerned, it was business as usual selling the fiberglass fishing boats, ranging in length from about 5.5 to 7.3 metres. Champion makes the Elite Series, the Tournament Series, the Fish & Ski Series, the Salt Water Series and the Back Country Series.
Rich Grover of Anaheim, California-based Angler’s Marine, a Champion Dealer, said he had Champion boats in stock, on order and in production. An employee of Midland Marine, also located in Mountain Home, said, “All we know is what we’re seeing in the paper.”
Champion sales down
Though Ranger ranked highest in the bass boat segment of the recently released J.D. Power and Associates Marine Quality and Performance Study, the brand was followed closely by Triton and Champion.
But, despite its good showing in the J.D. Power study, Champion appears to have been hard hit by the softening marine economy in 2001, based on information supplied by Statistical Surveys, Inc. in its most recent report.
During the second quarter of 2001, according to Statistical Surveys, Champion’s unit sales dropped by more than 20 percent compared to 2000, and for the first six months of 2001, unit sales declined by about 18 percent from the previous year. Ranger was down almost 16 percent for the six months and Triton was down about 15 percent.
This translated into a market share decline of 10 percent for Champion in the six-month period, according to the Statistical Surveys report. During the first six months of 2001, 912 Champions were sold, with 517 sold in the second quarter.
The Insurance Fraud Investigation Division of the Arkansas Insurance Department investigates and prosecutes all types of insurance fraud. The division includes the Workers’ Compensation Fraud Investigation Unit. The division carries out its statutory mandate by receiving referrals from various sources, including insurance companies, employers, employees, agents and interested citizens.
FTL Webstaff