Shipbuilder Austal executives accused of inflating earnings
Sat, Apr 1, 2023 7:57 AM
MONTGOMERY, Ala. (AP) — Three current and former former executives of a shipbuilder that constructs vessels for the U.S. Navy have been indicted on accounting fraud charges accusing them of falsely inflating the company's reported earnings, federal prosecutors said.
Craig Perciavalle, 52, Joseph Runkel, 54, and William Adams, 63, all of Mobile, Alabama, where Austal USA LLC is based, are accused of misleading shareholders and investors. They are each charged with one count of conspiracy to commit wire fraud and wire fraud affecting a financial institution, five counts of wire fraud, and two counts of wire fraud affecting a financial institution, the U.S. Department of Justice said in a news release Friday.
Court records were not immediately available to show if the men had attorneys to comment on their behalf.
Austal USA LLC is a subsidiary of Australia-based Austal Limited and builds littoral combat ships for the Navy. The ships are designed to operate in shallow coastal waters.
Perciavalle resigned as Austal USA's president in 2021 following an investigation by federal and Australian authorities into practices dating back more than four years, the company said at the time. Adams is the former director of the littoral combat ships program, according to the SEC. Runkel is the director of financial analysis.
Prosecutors alleged the three men manipulated an accounting metric to hide growing costs in order to maintain and increase the share price of Austal Limited’s stock, hurt U.S. investors.
The U.S. Securities and Exchange Commission said in a news release that the three “engaged in a scheme to artificially reduce the cost estimates to complete certain shipbuilding projects for the U.S. Navy by tens of millions of dollars.”