SEC Charges Trucking Executives With Accounting Fraud
FOR IMMEDIATE RELEASE
Washington D.C., Dec. 5, 2019 —
The Securities and Exchange Commission today charged two former top executives of Indiana-based trucking company Celadon Group Inc. for their participation in an accounting fraud that inflated the company's income and earnings per share. Celadon previously agreed to settle accounting fraud charges brought by the SEC in April.
The SEC's complaint against former Celadon president and chief operating officer William Eric Meek and former chief financial officer Bobby Peavler alleges that they sought to conceal losses by engaging in a scheme to buy and sell trucks at inflated prices, in some cases double or triple their fair market value. The complaint alleges that as a result of the transactions with third-party dealers, Celadon materially overstated its pre-tax income, net income, and earnings per share in its annual report for the period ending June 30, 2016, and in its subsequent public filings through the period ending Dec. 31, 2016. The complaint also alleges that Meek and Peavler lied to Celadon's auditor by claiming that the pricing in the transactions was "determined and evaluated independently," and by concealing their roles in negotiating and approving the transactions. Meek resigned from Celadon in 2017 and Peavler resigned in 2018.
"As alleged in our complaint, these members of Celadon's C-suite lied to its auditor and investors to try to conceal millions of dollars of overvalued trucks," said Joel R. Levin, Director of the SEC's Chicago Regional Office. "The SEC will continue to pursue corporate officers who employ schemes to inflate financial statements and defraud investors."
The SEC's complaint, filed in federal court in Indianapolis, charges the defendants with violating various antifraud provisions of the federal securities laws, lying to auditors, and aiding and abetting Celadon's books and records and reporting violations. The SEC seeks permanent injunctions, monetary penalties, and officer-and-director bars against both Meek and Peavler.
The U.S. Attorney's Office for the Southern District of Indiana and the Department of Justice, Fraud Section, Criminal Division, today filed criminal charges against the defendants for related misconduct.
The SEC's investigation, which is continuing, is being conducted by Jaclyn Janssen, Trevor Schumacher, Jonathan Polish, Thomas E. Vincus, and Amy S. Cotter of the Chicago Regional Office.
The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of Indiana, the Department of Justice, Fraud Section, Criminal Division, the Federal Bureau of Investigation's Indianapolis Division, and the U.S. Postal Inspection Service.