WASHINGTON (dpa-AFX) - Key management officials of the U.S. transportation company Celadon Group Inc. have been charged with accounting fraud scheme.
William Eric Meek, 39, and Bobby Lee Peavler, 40, both of Indianapolis, were charged for their alleged role in a complex securities and accounting fraud scheme that led to a loss of more than $60 million in shareholder value, the Department of Justice said.
Meek was the chief operating officer (COO) and Peavler was the chief financial officer (CFO) of Celadon, a publicly traded transportation and trucking company headquartered in Indianapolis, Indiana.
Indictments were filed in the U.S. District Court of the Southern District of Indiana against them on multiple charges including conspiracy to commit wire fraud, bank fraud, and securities fraud.
Meek and Peavler were arrested Thursday, and Judge Mark J. Dinsmore granted them bail.
These senior corporate executives orchestrated a securities and accounting fraud scheme that misled shareholders, banks, accountants, and the investing public, said Assistant Attorney General Brian A. Benczkowski of the Justice Department's Criminal Division.
The accused, despite knowing that Celadon's trucks declined in value, allegedly devised a scheme that concealed tens of millions of dollars in losses to its shareholders, banks and the investing public.
The trucks were owned by Quality Companies, one of Celadon's divisions. It sold hundreds of its older and unused trucks to a large truck dealer in exchange for newer used trucks by inflating the prices on invoices.
Meek and Peavler also allegedly structured one of the trades in an effort to artificially improve one of Celadon's quarterly financial statements, according to the indictment.
Related to this case, Danny Williams, the former head of a Celadon subsidiary, pleaded guilty in April 2019 to conspiracy to commit securities fraud. In the same month, Celadon entered a Deferred Prosecution Agreement with the government, under which it is obligated to pay restitution of $42.2 million, the DOJ said.
The FBI's Indianapolis Field Office and the U.S. Postal Inspection Service are investigating the case with the support of the U.S. Securities and Exchange Commission.
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