Two ex-Celadon executives charged with fraud at trucking company

Celadon

05/12/2019 22:55

By Jonathan Stempel
    Dec 5 (Reuters) - Two former top executives at Celadon Group
Inc  CGIP.PK  have been charged with fraud and lying to auditors
by concealing losses in the trucking company's aging fleet as
the market softened, the U.S. Department of Justice said on
Thursday.
    The charges against former chief operating officer William
Eric Meek and former chief financial officer Bobby Lee Peavler
follow Celadon's agreement in April to pay $42.2 million and
enter a deferred prosecution agreement to settle related claims.
    Authorities charged Meek and Peavler with involvement in a
2016 scheme where a Celadon unit, Quality Companies, tried to
rid itself of hundreds of older and unused trucks by swapping
them to a large dealer in exchange for newer used trucks.
    The Justice Department said that instead of disclosing
losses connected to the older trucks, Celadon hid them from
investors by inflating prices on invoices for the trades.
    Celadon's share price fell significantly in May 2017 after
the Indianapolis-based company said investors could no longer
rely on its financial statements covering the periods of the
alleged wrongdoing, the Justice Department said.
    Meek, 39, and Peavler, 40, both of Indianapolis, were
arrested on Thursday and have been released on bail, the Justice
Department said. The U.S. Securities and Exchange Commission
filed related civil fraud charges against both men.
    A lawyer for Meek did not immediately respond to requests
for comment. Sergio Acosta, a lawyer for Peavler, declined to
comment.  

 (Reporting by Jonathan Stempel in New York
Editing by Marguerita Choy)
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))