INDIANAPOLIS (WISH) — A grand jury indicted two former executives of a truckload shipping company on multiple criminal charges in a fraud scheme, the U.S. Attorney said Thursday.
William Eric Meek, 39, the former chief executive officer of Celadon Group Inc., and Bobby Lee Peavler, 40, its former chief financial officer, face multiple counts of conspiracy, securities fraud, wire fraud and false statements, said U.S. Attorney Josh Minkler in a news conference.
The security and fraud scheme, once revealed, resulted in a one-day drop of stock value of approximately $62.3 million, Minkler said.
Celadon stock was trading around 50 cents a share on Thursday, down from $9.50 per share, its three-year high, on Jan. 14, 2017.
Meek and Peavler, who are both from Indianapolis, could face decades in prison if convicted, Minkler said.
The U.S. attorney said the corporate officers doctored their books to hide that the company’s value dropped by tens of millions of dollars in 2015 and 2016.
The scheme involved artificially inflating the value of their trucks by swapping older trucks for newer trucks, but not showing the decline in tens of millions of dollars in the value of their trucks in their accounting books, Minkler said. Shareholders and the investing public saw books that made the company’s value appear higher than it was.
The former executives also were accused of hiding documents and declining to hand over documents requested by accountants.
In addition, the U.S. attorney said, the executives sought a $25 million loan to falsely pay down a debt but never revealed the loan to lenders, and paid back the loan at a cost of $27 million days later and went deeper into debt.
“Simply put they did not play it straight and they did not tell the public the bad news,” Minkler said.
In April, a reorganized Celadon Group Inc. agreed to pay $42.2 million to settle fraud claims after filing false financial statements and lying to auditors in efforts to hide losses of its aging trucking fleet.
Also in April, Danny Williams, 36, of New Palestine, Indiana, the former head of a Celadon subsidiary, pled guilty to conspiracy to commit securities fraud, make false statements to a public company’s accountants, and falsify books, records, and accounts of a public company.
Federal authorities commonly withhold images of people who are accused of crimes.