Three individuals from Alabama have been indicted by a federal grand jury for allegedly orchestrating an accounting fraud scheme at Austal USA LLC, a Mobile-based shipbuilder that constructs vessels for the US Navy.
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 Austal USA’s financial condition.
The indictment claims the defendants manipulated an accounting metric called “estimate at completion” (EAC) related to multiple Independence-class Littoral Combat Ships (LCS) being built for the US Navy. The conspirators allegedly inflated Austal Limited’s reported earnings in its public financial statements by suppressing EAC figures.
The scheme reportedly involved using 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 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.
The defendants 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 is leading the investigation. Austal USA is a subsidiary of Austal Limited, an Australian company traded in the United States and on the Australian Securities Exchange.