Asheville Citizen-Times from Asheville, North Carolina • Page 10

State region Page 2B Tuesday, Nov. 12, 1991 ASHEVILLE CITIZEN-TIMES Insurance fraud trial opens odd federal couirJ Additionally, court records indicate federal prosecutors plan to discuss bribery charges which were not a part of the federal indictments leveled against Shackelford and Gray by state prosecutors, the News Observer of Raleigh reported Monday. The charges allege that Gray, while the state's chief insurance examiner, accepted $41,000 from Shackelford in exchange for protection from aggressive department analysts. R. Dan Boyce, an assistant U.S.

attorney, will act as the government's chief prosecutor. To explain Shackelford's vast holdings, Boyce will rely on colored charts and the testimony of dozens of witnesses. Interstate Insurors was an agency owned by Shackelford that managed about 86 percent of the business Interstate Casualty did. Investigators say much of the missing money was siphoned off at Interstate Insurors before it reached the parent company. Shackelford was indicted on 23 charges by a Lenoir County grand jury and Gray was indicted on eight charges.

If convicted on all counts, they could be sentenced to several centuries in a federal prison. State regulators took control of Interstate in March 1990 after a state audit showed the company's liabilities exceeded its assets by more than $19 million. Before its collapse, the company was the seventh largest insurer in the state and specialized in insuring high risk drivers who must pay higher premiums. Prosecutors will have to reveal the inner workings of a company that appeared to make more than $1 million profit in 1988 only to go bankrupt 16 months later after about $34 million disappeared. And they will have to educate jurors about insurance industry methods and jargon assets, nonadmitted assets, agents balances, IRIS ratios, reinsurance and guaranty associations.

State and federal indictments charged former Interstate owner William C. Shackelford with embezzling $37.2 million from the company over a five-year period. He was charged with bribing a former deputy state insurance commissioner to protect his company. Shackelford's federal court trial begins Tuesday with jury selection in the courtroom of U.S. District Court Judge Malcolm J.

Howard. Twelve jurors and alternates must be selected. The trial is expected to last four to five weeks. Shackelford is charged with 36 counts of mail fraud, 21 counts of bank fraud, 65 counts of money-laundering and one count of conspiracy in federal court, according to Gloria Dupree, a spokeswoman for the U.S. attorney's office.

Bobby W. Gray, who became a vice president of the insurance company after retiring from the state, is charged with 36 counts of mail fraud, 21 counts of bank fraud and one count of conspiracy, Dupree said. Interstate Casualty crash mystery ready for exposure, solving THE ASSOCIATED PRESS NEW BERN The mystery surrounding the failure of a Kinston insurance company and the disappearance of more than $30 million may begin to unravel in a courtroom this week. Interstate Casualty Insurance 1990 crash cost about 90,000 customers their auto insurance, more than 200 workers their jobs and North Caroli-. na's 4 million motorists higher insurance rates the prices driven upward by the cost of cleaning up the mess.

MORE THAN MERELY CHILLIN' Poultry plant fines adding up State gleans sizable collection for health, safety violations THE ASSOCIATED PRESS RALEIGH The state has collected more than $61,000 in penalties from poultry operations for health and safety violations, state Department of Labor records indicate. But two-thirds of those penalties were paid in one case involving Perdue Farms that was settled this year. The other $21,000 in penalties came during 20 years of inspections at the state's poultry operations. Those penalties cover at least two fatalities and accidents that injured at least 23 people. Inspection records from the Department of Labor obtained by The Associated Press indicate that only 40 of 83 poultry processing operations in North Carolina have ever been checked by health and safety inspectors.

The records were requested after a Sept. 3 fire at Imperial Food Products in Hamlet that killed 25 people and injured 56. The plant had never been inspected in 11 years of operation. Of the 40 plants that were inspected, 30 were cited for violations of health and safety standards, the Labor Department records show. Of $61,140 in penalties levied by the state, $39,030 were in repetitive motion injury cases involving the Perdue Farms plants in Lewis-ton and Robersonville.

Perdue agreed to accept the penalty in February and change its process to reduce repetitive motion injuries. Perdue's challenge of another $720 in penalties still is unresolved. The department lists violations as "serious," "willful," "repeat" and "other." Penalties range front nothing for most non-serious violations to a maximum of $14,000 for willful and repeat violations. The maximum penalty for willful and repeat violations will climb to $70,000 on Jan. 1.

Serious violations now are assessed a maximum penalty of $2,500, but the new cap effective Jan. 1 will be $7,000. Until Oct. 1, 1990, serious violations had a maximum penalty of $1,000. The department reduces fines for a number of reasons, said Mark Schulz, executive director of the North Carolina Occupational Safety and Health Project.

"It's fairly rare that they actually give the maximum," Schulz said. "They have a whole scheme for reducing the maximum fine if it's a small company, or they have a good record, for instance. The biggest problem was that the maximum did not increase with inflation. "Companies rarely challenged the penalties because it would cost more money to hire a lawyer than pay the thing," Schulz said. Schulz said the low fines and lack of inspections had encouraged businesses not to worry about health and safety issues.

He said his group once asked private consulting companies what they would charge for a safety audit of a typical plant; a good audits ing firm -about $1,200. "For a company that is not particularly concerned about health and safety, it is better financially to wait and hope you don't get inspected," Schulz said. "As a strictly financial decision, knowing how few inspectors are out there, it makes better business sense to take a chance. THE ASSOCIATED PRESS Mother Nature continued to give the high country a taste of the bitter winter weather for which northwestern North Carolina Is famous, as towns on both ends of the state were hit with the onslaught of winter or at least, a taste of winter to come. Much of Watauga County awoke beneath a sheet of Ice Sunday, triggering traffic accidents and power outages across the area.

Wednesday Asheville awakens on 'GMA' By Tony Kiss ENTERTAINMENT EDITOR The cast and crew of ABC-TVs "Good Morning America" are due in Asheville late Tuesday afternoon, as the program readies for a live, two-hour nationwide broadcast Wednesday morning from two city locations. The long-running morning show, now on a five-city bus tour through Dixie, will broadcast 7 to 9 a.m. Wednesday from Biltmore Estate and the Folk Art Center. (WLOSChannel 13). The Biltmore portion, with "GMA" hosts Joan Lunden and Charles Gibson, is open to the early-rising public.

Visitors should be at the estate a.m. Wednesday and bring a Asheville was also close to other cities on the trek, he said. The tour began Monday in Charleston, S.C., traveled to Atlanta Tuesday, and will stop in Chattanooga Thursday and end in Nashville Friday. The program will include a tour of Asheville and visits to the Wolfe homeplace and Biltmore; a chat with William Cecil, Biltmore president; a report by Channel 13 anchor Darcel Grimes on the problem of acid fog; a look at the North Carolina furniture industry; a segment with dialect coach Arden Sampson on "speaking like a Southerner," a clogging demonstration and a debate between Baptist fundamentalists and moderates. lawn chair.

Anyone through the gate by 6:16 a.m. can stay and visit Biltmore for free. The show's weatherman, Spencer Christian, will be stationed at the Folk Art Center, off the Blue Ridge Parkway in East Asheville. In deciding where to take the show, executive producer Jack Reilly was inspired by the city's legendary, late, literary giant, Thomas Wolfe. "I've always wanted to see Asheville," he said last week, in a phone interview from New York City.

"In my youth, I was a big fan of Thomas Wolfe. I connected those great stories with Asheville, saw it in my mind." Duke in uproar over newspaper ad Bermudans flock to Raleigh for annual shopping spree Plan week of 'industrial-strength' shopping The economy of Bermuda is fueled mainly by tourism and banking. Virtually all of its products are imported. Prices are high with not much variety. A nice pair of men's shoes might cost $120.

A standard iron would top $40. Ten garbage bags cost $5. and director of Hillel, a campus Jewish group. "They should do penance." Several other speakers at Sunday's rally in front of Duke Chapel called on the student editorial board to resign, the Durham Herald-Sun reported. The advertisement ran in last Tuesday's Chronicle and was paid for by a group that calls Itself the Committee for Open Debate on the Holocaust It argues that traditional accounts of the widespread anni-' hilation of Jews and other ethnic groups at the hands of Hitler's troops in the early 1940s are widely exaggerated.

"If these ideas exist, they should be made public and be given a chance to be refuted rather than kept quiet," said Ann Heimberger, editor of The Chronicle. Elizabeth Wyatt, the student advertising manager who made the final decision to run the ad, is herself Jewish and said some family members had been killed in the Holocaust. THE ASSOCIATED PRESS DURHAM The editors of Duke University's student newspaper continued to defend their decision to print an advertisement that denied the Holocaust ever happened, even after 400 people rallied demanding the editors' resignations. "I am horrified by those who sit on the third floor of Flowers Hall and deem to put out a newspaper for us called The Chronicle," said Rabbi Frank Fischer, a professor at Duke's Divinity School Liquor sales Sunday score big at Myrtle Beach THE ASSOCIATED PRESS RALEIGH More than 100 Bermudans are scurrying through North Carolina stores this week, buying products that would cost two or three times as much in their homeland. The shopping spree is an an-; nual event.

Members of the group paid $650 each to fly to Raleigh Saturday and stay five nights at a Marriott hotel. They will shop at stores from Raleigh to Burlington, spending thousands of dollars for merchandise more expensive or unavailable in Bermuda. The group was at Burlington Outlet Mall Monday, after a first-; day spree at a Wal-Mart in Ra-. leigh Sunday. Their purchases were as diverse as toothpaste and micro- waves.

Cashiers worked double-; time as the totals came in on each purchase $325, $209, $327, $286. Some of the shoppers spent more money in two hours than they might normally spend in a month. "I plan all year for this," Andrea Santucci said as she worked her way through a three-page shopping list. "Even with the cost of getting over here, it's much, much cheaper." They'll shop again Tuesday and Wednesday, 10 to 12 hours a day for four days. Crabtree Valley Mall, Pace Warehouse, Burlington Outlet Center, Northgate Mall, Hudson Belk, Sports Unlimited, Circuit City.

The economy of Bermuda is fueled mainly by tourism and banking. Virtually all of its products are imported, Prices are high and there isn't much variety. A nice pair of men's shoes might cost $120. A standard iron would top $40. Ten garbage bags cost $5.

"Look at this," said Calvette Daniels as she held a Barbie Doll decked out in a Hawaiian swimsuit. "This costs less than $6. In Bermu da it would be $20 or more." She placed it on a growing pile in her shopping cart and checked it off her daughter's Christmas list. On Thursday morning, a moving van will haul the load to the airport. It may take two plane trips to haul it all back to the small island nation, Most of the shoppers were women and most were taking a week's vacation to Christmas shop and stock up on a year's worth of everyday items.

One clerk spent more than 10 minutes scanning two shopping carts full of goods one stuffed almost entirely with clothes. "That's $969.60," she said. The woman peeled off one $100 bill after another before sorting out a few smaller bills. THE ASSOCIATED PRESS MYRTLE BEACH, S.C. Tavern owners and customers alike are giving positive reviews to the first Sunday of legal liquor sales in the resort town of Myrtle Beach.

"This (being open on Sundays) is a beautiful thing," said John Talley, owner of Atlantis Night Life. "It's good for business in Myrtle Beach in general. I think It'll be summertime before we see the full effect." Myrtle Beach voters gave the approval for Sunday liquor sales last week. The vote was a reversal from six years ago, when a similar referendum was rejected. Restaurant and tavern owners must pay a $150 weekly license fee to sell liquor.

"If you're going to have places open the rest of the week, you should have them open on Sunday," said Keith Huffstetler of Gastonia, N.C., who was visiting from a nightclub called Studebaker's. "There's no difference between Sunday and the rest of the week." Harriet Hovis, vice-president of Studebaker's, said the club drew a great crowd Saturday night..