Former Indy transportation company executives charged with securities, bank fraud
INDIANAPOLIS, Ind. — The U.S. Department of Justice (DOJ) announced the arrest of two former Indianapolis company executives in connection with an elaborate securities and accounting fraud scheme Thursday.
Former COO William Eric Meek, 39, and CFO Bobby Lee Peavler, 40, both of Indianapolis, face charges for their alleged role in the loss of more than $60 million in shareholder value of their company Celadon Group Inc. (Celadon).
“These senior corporate executives at Celadon allegedly orchestrated a securities and accounting fraud scheme that misled shareholders, banks, accountants, and the investing public,” said Assistant Attorney General Benczkowski.
Celadon is a publicly traded transportation and trucking company headquartered in Indianapolis, Indiana and was founded in 1985.
Earlier this year, Celedon was ordered to pay restitution of $42.2 million to the government after the former head Danny Williams, 36, of New Palestine, pleaded guilty to conspiracy to commit securities fraud and falsifying records and accounts.
According to the Thursday indictment, Meek, Peavler and others allegedly knowingly failed to report a decline in value of a large number of Celadon’s trucks in the years leading up to 2016.
Officials said the former executives are accused of then devising a scheme to conceal tens of millions of dollars in losses from banks, shareholders and investors.
The scheme allegedly involved the intention trading of lesser-valued trucks with inflated the prices for newer, higher-valued trucks.
DOJ said the trades did not reflect the proper value on the company’s books and were also reported as “sales” to avoid scrutiny.
Independent auditors were allegedly lied to at the time, ultimately resulting in Celadon’s declaring that its financial statements for fiscal year 2016 could no longer be relied on, causing a one-day loss of market value of around $62.3 million.
“Through their scheme of lies, fraud and misrepresentations as alleged in the Indictment, Meek and Peavler damaged the integrity of the market, the corporation, its shareholders and public investors,” said U.S. Attorney Josh J. Minkler of the Southern District of Indiana.
Meek and Peavler were released on bail Thursday and face charges including multiple counts of wire fraud, bank fraud, securities fraud, and falsification of accounts of a public company.