U.S. Department
of Justice
United States v. Austal USA, LLC
PENDING CRIMINAL DIVISION CASES
United States v. Austal USA, LLC
Court Docket No.: 24-CR-000131-JB
United States v. Craig D. Perciavalle, Joseph A. Runkel, William O. Adams
Court Docket No.: 23-CR-00070-JB
These cases are assigned to a United States District Judge Jeffrey U. Beaverstock for the United States District Court for the Southern District of Alabama Southern Division. The address of the courthouse is 155 Saint Joseph St. Mobile, Alabama 36602.
Latest Updates:
The previously scheduled in-person pretrial conference as to defendants Craig D. Perciavalle, Joseph A. Runkel, and William O. Adams, set for October 4, 2024 at 2:00 PM, is cancelled.
On August 26, 2024, Austal USA, LLC entered into a plea agreement. As a result, there will be no trial in this matter. A sentencing hearing has been scheduled for November 25, 2024 before Judge Jeffrey U. Beaverstock.
The Securities and Exchange Commission (“SEC”) will handle the distribution of funds to harmed investors. Investors harmed as a result of the misconduct of Defendants should watch the SEC’s Harmed Investors page for further developments regarding the SEC’s distribution of funds to harmed investors.
Case Background: On March 30, 2023 a federal grand jury returned an indictment charging three Alabama men with orchestrating an accounting fraud scheme at Austal USA LLC, a Mobile-based shipbuilder that constructs vessels for the U.S. Navy, including the Independence-class Littoral Combat Ship (LCS). Austal USA is a wholly owned subsidiary of Austal Limited, an Australian company that is traded over-the-counter in the United States via American Depositary Receipts, as well as on the Australian Securities Exchange.
According to court documents, from at least in or around 2013 through at least in or around July 2016, Craig Perciavalle, 52, Joseph Runkel, 54, and William Adams, 63, all of Mobile, and their co-conspirators allegedly conspired to mislead Austal Limited’s shareholders and the investing public about Austal USA’s financial condition. Specifically, the defendants are alleged to have artificially reduced and suppressed an accounting metric known as “estimate at completion” (EAC) in relation to multiple LCS ships that Austal USA was building for the U.S. Navy. Suppressing the EACs allegedly falsely overstated Austal Limited’s reported earnings in its public financial statements.
The defendants and their co-conspirators allegedly manipulated the EAC figures in part by using so-called “program challenges” – ostensibly cost-savings goals – but which in reality were “plug” numbers and fraudulent devices to hide growing costs that should have been incorporated into Austal USA’s financial statements, and ultimately reflected in Austal Limited’s reported earnings. The defendants allegedly did this, among other reasons, to maintain and increase the share price of Austal Limited’s stock. When the higher costs were eventually disclosed to the market, the stock price was significantly negatively impacted and Austal Limited wrote down over $100 million.
Perciavalle, Adams, and Runkel 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. If convicted, they each face a maximum penalty of 30 years in prison for the conspiracy count and each count of wire fraud affecting a financial institution, and 20 years in prison for each count of wire fraud.
For more information about United States v. Austal USA, LLC., please see below:
Information – August 26, 2024
Plea Agreement – August 26, 2024
Press Release – March 31, 2023
Indictment
Victim Impact Statement: If you would like to submit a Victim Impact Statement, you may do so by mailing the Victim Impact Statement below (or a letter to the court) to: Victim Witness Unit, U.S. Department of Justice, Criminal Division, Fraud Section, 10th & Constitution, NW, Bond Building, Room 4416, Washington, D.C. 20530. You also may submit the Victim Impact Statement via email at VictimAssistance.fraud@usdoj.gov or by fax at: (202) 514-3708.
The information on this website will be updated as new developments arise in the case. If you have any questions, please call the Victim Assistance Line toll-free at (888) 549-3945 or email us at VictimAssistance.fraud@usdoj.gov.
Presumption of Innocence: It is important to keep in mind that an indictment is merely an allegation, and defendants are presumed innocent until proven guilty and that presumption requires both the court and our office to take certain steps to ensure that justice is served.
Crime Victims’ Rights Act and Right to Retain Counsel: The Crime Victims’ Rights Act (18 U.S.C. § 3771) applies only to victims of the counts charged in federal court, and thus individuals may not be able to exercise all of these rights if the crime of which the individual is a victim was not charged. Section 3771(c)(2) of this Act requires that we advise you that you have the right to retain counsel. Although the statute specifically sets forth your right to seek advice of an attorney with regard to your rights under the statute, there is no requirement that you retain counsel. The Government may not recommend any specific counsel, nor can the Government (or the Court) pay for counsel to represent you. Government attorneys represent the United States.
If you elect to obtain counsel to represent your interests, please have your attorney notify this office in writing at: U.S. Department of Justice, Criminal Division, Fraud Section, 10th & Constitution Avenue, NW, Bond Building, 4th Floor, Washington, DC 20530, Attention: Victim Witness Unit; fax: (202) 514-3708; or email: VictimAssistance.fraud@usdoj.gov. If you elect not to retain counsel to represent your interests, you do not need to do anything.
Plea Agreements: Please be aware that many criminal cases are resolved by plea agreement between the Department of Justice and the defendant. You should also know that it is not unusual for a defendant to seek to negotiate a plea agreement shortly before trial is scheduled to begin. Plea agreements can be made at any time and as late as the morning of trial, leaving little or no opportunity to provide notice to you of the date and time of the plea hearing. If the court schedules a plea hearing in this case, we will use our best efforts to notify you of available information as soon as practicable. If you want to inform the prosecutor of your views regarding potential plea agreements, or any other aspect of the case, please contact the prosecutor [CL(1] assigned to this case or call the Victim Assistance Line toll-free at (888) 549-3945 or email us at VictimAssistance.fraud@usdoj.gov.