(WASHINGTON) — Fincantieri Marine Group suspended Bay Shipbuilding’s general manager, Craig Perciavalle, on Wednesday following allegations of criminal conduct during his employment at Austal USA from 2013-2016.
“We are aware of the criminal indictment and civil complaint filed against Craig related to his previous employment before coming to (Bay Shipbuilding),” said Marco Galbiati, CEO of Fincantieri Marine Group. “We have chosen to suspend him from his current duties until these matters are resolved.”
Perciavalle served as president of Austal USA. He became the general manager/vice president of Fincantieri Bay Shipbuilding in November 2021.
The complaint filed by the Securities and Exchange Commission in U.S. District Court for the Southern District of Alabama names two other Austal USA executives: William Adams, former director of the Independence-class littoral combat ship (LCS) program; and Joseph Runkel, director of financial analysis.
“From at least January 2013 through at least July 2016, defendants engaged in a deceptive scheme to fraudulently overstate revenues and earnings before interest and tax (EBIT),” the complaint reads. “Defendants orchestrated the fraud in order to meet or exceed analyst consensus estimates for EBIT, a key financial metric used by analysts and investors.
“Defendants’ misconduct involved using artificially low estimates at completion (EACs) for ships Austal built for the United States Navy. This misconduct allowed them to reduce the EACs by tens of millions of dollars for certain ships that Austal USA built for the Navy,” the SEC alleges.
The defendants have each been charged with five counts of wire fraud, two counts of wire fraud affecting a financial institution, and two related conspiracy charges in connection with the accounting scandal. The charges carry maximum penalties of 20 to 30 years in prison per count.
In the wake of the charges, Jan Allman will serve as Bay Shipbuilding’s interim general manager in addition to her role as FMG’s senior vice president for public affairs and community relations.