A trucking company agreed to settle DOJ and SEC accounting fraud charges for filing false and misleading statements with investors and falsifying its books and records.
According to the charging documents, Celadon Group, Inc. ("Celadon") filed false and misleading financial statements and recorded inflated values of assets exchanged in trade transactions in an effort to hide $20 million of losses from investors in 2016 and 2017. When Celadon was approached by auditors concerning the inflated values of assets, Celadon allegedly "lied and failed to disclose critical facts."
Celadon entered into a Deferred Prosecution Agreement and agreed to pay approximately $42.2 million in restitution to settle the case with the DOJ. In reaching this resolution, the DOJ took into account Celadon's cooperation with the investigation and its "extensive" remedial efforts.
To settle its case with the SEC, Celadon admitted to the SEC's charges of fraud along with books and records, and internal control violations. Celadon also agreed to pay $7 million in disgorgement, which will be deemed satisfied by the company's restitution payments to the DOJ.
In a related matter, the DOJ charged Danny Ray Williams, President of Quality Companies, LLC (a subsidiary of Celadon), for his role in the scheme. Mr. Williams allegedly helped falsify information about Celadon's finances in order to boost Celadon's stock and received in return continued compensation and other benefits.
The DOJ and SEC noted that the investigations are ongoing.
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