U.S. Navy Shipbuilder Admits To Fraud

An Alabama-based shipbuilding company that builds vessels for the United States Navy has admitted to fraud.

Austal USA, a shipbuilding company for the U.S. Navy has admitted to misleading shareholders and investors about the company’s condition.

The DOJ reported the company pleaded guilty to a count of securities fraud and one count of obstruction of a federal audit.

Austal has agreed to pay a $24 million fine.

U.S. Navy Shipbuilder Pleads Guilty to Financial Accounting Fraud Scheme and Obstructing a Defense Department Audit

🔗: https://t.co/XgcUatpds9 pic.twitter.com/kcYMnkQhpB

— Criminal Division (@DOJCrimDiv) August 27, 2024

The Justice Department said Austal USA conspired to mislead shareholders and investors about its financial condition. https://t.co/q8kq5jCM02

— Navy Times (@NavyTimes) August 28, 2024

Per AP:

Austal USA, an Alabama-based shipbuilder that makes vessels for the U.S. Navy, has admitted wrongdoing and agreed to pay a $24 million fine to settle an accounting fraud investigation, the U.S. Department of Justice announced Tuesday.

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From 2013 through July 2016, Austal USA conspired to mislead shareholders and investors about the company’s financial condition, the department said. The company pleaded guilty to one count of securities fraud and one count of obstruction of a federal audit.

Austal USA “engaged in a years-long scheme to illegally inflate its profits on ships the company was building for the U.S. Navy, reporting false financial results to investors, lenders, and its auditors,” Nicole M. Argentieri, principal deputy assistant attorney general and head of the Justice Department’s Criminal Division, said in a statement.

Austal USA LLC is a subsidiary of Australia-based Austal Limited and builds littoral combat ships for the Navy that are designed to operate in shallow coastal waters.

US Navy shipbuilder Austal USA agrees to pay $24 million to settle accounting fraud probe https://t.co/bIQzuAMNVw

— The Associated Press (@AP) August 28, 2024

Per The DOJ:

Austal USA LLC (Austal USA), a Mobile, Alabama-based shipbuilder that constructs vessels for the U.S. Navy and U.S. Coast Guard, pleaded guilty yesterday and has agreed to pay $24 million to resolve an investigation by the Justice Department related to an accounting fraud scheme and efforts to obstruct the Defense Contract Audit Agency (DCAA) during a financial capability audit. Austal USA is a wholly owned subsidiary of Austal Limited, an Australian company that is publicly traded on the Australian Securities Exchange and was traded over-the-counter in the United States via American Depositary Receipts.

The Justice Department’s criminal resolution was coordinated with the U.S. Securities and Exchange Commission (SEC). Separately, Austal USA also entered into a False Claims Act settlement with the department’s Civil Division to resolve claims that it knowingly provided non-compliant parts to the U.S. Navy.

“Austal USA, a shipbuilder for the U.S. military, engaged in a years-long scheme to illegally inflate its profits on ships the company was building for the U.S. Navy, reporting false financial results to investors, lenders, and its auditors,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “The investing public, the U.S. Navy, and the Defense Contract Audit Agency relied on Austal USA to tell the truth about its financial condition and its performance on U.S. Navy contracts. Today’s guilty plea underscores the Department of Justice’s commitment to holding U.S. government contractors accountable for their criminal misconduct and ensuring that they engage honestly with the U.S. government.”