Massive Accounting Fraud Uncovered at US Navy Shipbuilder, Three Executives Charged

Mike Schuler April 3, 2023

Indictment reveals multi-year scheme to manipulate financial statements and mislead investors.

A federal grand jury indicted three Alabama men on charges of orchestrating an accounting fraud scheme at Austal USA LLC, a prominent Mobile-based shipbuilder that constructs vessels for the U.S. Navy, including the Independence-class Littoral Combat Ship (LCS).

Austal USA is a subsidiary of Austal Limited, an Australian company traded in the United States and on the Australian Securities Exchange.

The indictment alleges that Craig Perciavalle, 52, Joseph Runkel, 54, and William Adams, 63, conspired with others from 2013 to 2016 to deceive Austal Limited’s shareholders and the investing public about the financial condition of Austal USA.

The defendants are accused of manipulating an accounting metric called “estimate at completion” (EAC) related to multiple LCS ships being built for the U.S. Navy. By suppressing EAC figures, the conspirators allegedly inflated Austal Limited’s reported earnings in its public financial statements.

The scheme reportedly involved using “program challenges,” which were ostensibly cost-saving goals but were in fact fraudulent devices to conceal growing expenses that should have been included in Austal USA’s financial statements and reflected in Austal Limited’s reported earnings. The defendants are said to have engaged in this fraud to maintain and increase Austal Limited’s stock price. When the true costs were eventually disclosed, the stock price took a significant hit, and Austal Limited wrote down over $100 million.

Perciavalle, Adams, and Runkel face multiple charges, including conspiracy to commit wire fraud and wire fraud affecting a financial institution. If convicted, they could each face up to 30 years in prison for the conspiracy count and each count of wire fraud affecting a financial institution, and 20 years for each count of wire fraud.

The Naval Criminal Investigative Service (NCIS) Economic Crimes Field Office are leading the investigation.

https://gcaptain.com/massive-accounting-fraud-uncovered-at-us-navy-shipbuilder-three-executives-charged/

>>18642086 (me)

this goes with

Austal Stock Sinks On US Navy Investigation

Reuters April 4, 2023

by Sameer Manekar (Reuters) – Australian shipbuilder Austal sank as much as 8.4% to its lowest level in more than four years on Monday after the United States Department of Justice indicted three of its former U.S. employees on manipulating financial information.

Austal, which builds ships for the U.S. Navy and is working on parts of the Virginia class submarines, plunged to its lowest level since October 25, 2018, and marked its worst intraday drop since January 17.

The U.S. Department of Justice (DOJ) charged three former employees for “allegedly making or causing to be made false and misleading statements about Austal USA’s performance and financial condition between 2012 and 2016”, the company said.

The U.S. Securities and Exchange Commission (SEC) has also filed civil charges against the three individuals, Austal said.

The SEC and DOJ alleged that the individuals artificially reduced and suppressed an accounting metric, called estimate at completion (EAC), in relation to multiple littoral combat ships that Austal was building for the U.S.Navy.

The company since then has announced a write-back to adjust its revenue and profit, settled an investigation by Australia’s securities regulator, and conducted its own investigation into the matter, which resulted in the resignation of the president of Austal USA.

About 1.2 million shares changed hands, compared with the monthly average of around 791,900 shares.

Austal is down 17% so far this year, as of last close, compared with a 2.1% increase in the ASX All Ordinaries index

https://gcaptain.com/austal-stock-navy-investigation/>>18642086

>>18642207

which is why when anons are about to go beast-mode the DDoS begins and Proto activates

Been there, done that, T-shirt faded