NO: DELENG / 2017 / 70663
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Austal USA hires a former fraud prosecutor following an accounting scandal.
By Seaandcoast | 04/05/2023
Austal USA has appointed a white-collar crime prosecutor with ten years of experience as its chief compliance officer. Austal's current requirements may be relevant to the new appointment: Three former executives from Austal USA were recently indicted by the Justice Department on charges of accounting fraud in the early stages of Austal's Littoral Combat Ship program.
Adam Overstreet, a former employee of the United States Attorney's Office for the Southern District of Alabama, will be appointed as Austal USA's new vice president of legal affairs and chief compliance officer. For a very long time, he served in the workplace's criminal division and took care of misrepresentation indictments.
Overstreet likewise has significant involvement with shipbuilding. He most recently held the position of senior counsel for Ingalls Shipbuilding, where he managed the litigation docket for HII's Mission Technologies Division and oversaw the company's internal investigations.
Additionally, the appointment communicates. Austal USA's President Rusty Murdaugh stated in a statement that the company takes compliance with all laws and government regulations very seriously. Adam's profound and different involvement with consistence, examinations, prosecution, and government obtainment makes him appropriate to put Austal in the best situation for proceeded with progress as a top oceanic safeguard worker for hire."
Last month, the U.S. Protections and Trade Commission prosecuted three previous chiefs of Austal USA on charges of bookkeeping misrepresentation, including one person who was an ongoing representative until the day of the prosecution.
William Adams, who was previously in charge of Austal USA's Independence-class Littoral Combat Ship (LCS) program, is one of the accused; previous president Craig Perciavalle; and Joseph Runkel, director of financial analysis. They have been charged with four related offenses and five counts of wire fraud; The maximum penalties for each charge, if convicted, are measured in decades.
The three men stand blamed for controlling a bookkeeping metric known as "gauge at culmination" (EAC) for various LCS ships that Austal USA was working in 2013-2016. The charging documents state that lowering this metric inflated Austal USA's publicly-listed Australian parent company's reported earnings (EBIT), which in turn increased the stock's value.
Austal USA was forced to admit, in the middle of 2016, that its LCS costs were higher than previously disclosed. This prompted a surprising entire year deficiency of $120 million, down from a benefit of $86 million the prior year.
Putting aside the alleged accounting scandal, Austal USA still plays a significant role in the U.S. defense industrial base. The Branch of Guard has put $50 million in framework to add steel body development capacity to Austal's all-aluminum setup, and the shipbuilder is one of the primary competitors for a follow-on yard contract for the new Star grouping class frigate (expanding the creation of a similar plan at Fincantieri Marinette Marine).