Executives at Austal, which builds LCSs for the US Navy, indicted for fraud

MONTGOMERY, Ala. – Three current and former executives of a shipbuilder that builds vessels for the US Navy and Coast Guard 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 US Justice Department said in a news release Friday .

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Court records were not immediately available to show whether the men had lawyers 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 stepped down as Austal USA 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 ship program, according to the SEC. Runkel is director of financial analysis.

Prosecutors alleged that the three men manipulated an accounting calculation to hide rising costs to maintain and increase the share price of Austal Limited’s shares, harming US investors.

The US Securities and Exchange Commission said in a press release that the three “engaged in a scheme to artificially reduce cost estimates to complete certain US Navy shipbuilding projects by tens of millions of dollars.”