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Employees docked for healthcare insurance, but not covered

Family Furniture deals with fraud charges

Not much bad news comes out of Oxford. But on Halloween, ironically, Mississippi Attorney General Jim Hood charged manufacturer Oxford Furniture Company owner Ted Carskadden, along with his son-in-law Dustin Metcalf, with insurance fraud.

Carskadden faces one count of felony false pretense for docking employees’ paychecks for health insurance coverage they were not receiving.

“Two of the victims ran up hefty hospital bills for treatment they thought was covered,” said Hood, who learned about the insurance fraud when former employees of the company complained to his office.

Carskadden, 61, and Metcalf, 36, who lives on Scruggs Way in Plano, Texas, turned themselves in to authorities Oct. 30. Metcalf, who is married to Carskadden’s daughter, Carrie Metcalf, faces 31 counts of insurance fraud.

In May 2005, Carskadden had high hopes for Oxford Furniture’s success when he unveiled 15 frames produced by the new upholstery company. Three months earlier, he had introduced the company’s lines at the Tupelo Furniture Market and had begun shipping orders.

Oxford Furniture, which had operated temporarily in a small factory in Ecru since December 2004, had quickly reached capacity. By June 2005, production had been moved to a 102,000-square-foot facility on 65 acres in Pontotoc. That size capacity, explained Carskadden, represented approximately $27 million in annual sales. Based on early sales, he predicted such expansive growth that five stackable additions in 102,000-square-foot increments were planned.

“We’re thinking at this point that we may have to start a second one before we finish the first,” he told Furniture Today in mid-2005.

A graduate of Mississippi College, Carskadden had formed Oxford Furniture with Metcalf, who presided over the company and had worked with International Alliance Data Systems. Carskadden’s daughter, Carrie Metcalf, who had managed Havertys stores in Texas, joined Oxford Furniture as vice president of merchandising. A third collaborator, Randall Smith, formerly with Washington Furniture, had joined as vice president of operations. Neither Carskadden’s daughter nor Smith was charged with insurance fraud.

After forming Oxford Furniture, Carskadden had continued managing accounts for case goods importer Progressive Furniture Inc., his employer for more than a decade. As a furniture company executive, he had traveled throughout the Far East representing Progressive and its Woodlands Designs Division. His role involved product development, merchandising and marketing Progressive’s internationally-made products.

Based in Swanton, Ohio, Progressive had been one of the early leaders in outsourcing all-wood case goods production to contract factories in the Far East and Mexico. Havertys and Miskelly’s are among furniture retailers that Progressive distributes bedroom, dining room, occasional and entertainment furniture under the Woodlands Designs brand.

For Carskadden, it made sense to establish Oxford Furniture in Northeast Mississippi to market upholstered goods in traditional, transitional and contemporary styles in the $499 to $899 retail price range in chenilles, tapestries and wovens. Most of the fabrics were domestic, with some imported from the Far East and Turkey. The line included various condominium-sized pieces and “lifestyle” looks, which Carskadden said would distinguish Oxford Furniture by being “overcovered and overstuffed,” adding value, and providing a greater selection. The company’s business plan called for a two-week turnaround on programmed merchandise. There were no plans to make leather upholstery or wood products.

By August 2006, Oxford Furniture had 120 employees. By March 2007, business was so brisk with Top 100 accounts, including American Signature Inc., that Carskadden lured industry veteran Tom Granata to join Oxford Furniture as vice president of national accounts, a new position. Granata had worked for Progressive and Pilliod, and had owned a warehouse as a Bassett distributor.

“We needed to bring in an experienced person to help us,” said Carskadden.

Nine months later, after a disappointing October market, the startup upholstery producer shut down. Manufacturing facilities, including a 102,000-square-foot adjoining facility that had not yet been occupied, were put on the market by owner Gerald Washington, a former executive of American Furniture Company.

The abrupt closure took customers by surprise, particularly because the company had reported June 2007 sales were up 43% from the previous year. Carskadden pointed to “serious undercapitalization issues” as the root cause of the company’s demise. He also said the unexpected closing of Quaker Fabric, one of the manufacturer’s major upholstery vendors, also hurt business. Add to that a marketing partnership with Collezione Europa that deteriorated. At the time of its closing, Oxford Furniture had orders for merchandise that could fill 62 trucks.

A preliminary hearing on the insurance fraud charges was held Nov. 18. The Insurance Integrity Enforcement Bureau of the Attorney General’s Office is investigating the case.

“Because the case is pending prosecution, there’s little more we can say about it,” said Jan Schaefer, public information officer for Hood’s office.

Contact MBJ contributing writer Lynn Lofton at llofton656@aol.com.

About Lynn Lofton

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