Austal USA Pleads Guilty to Fraud Charges

Austal USA, a shipbuilder based in Mobile, Alabama, has pleaded guilty to securities fraud and obstruction of a federal audit, agreeing to pay $24 million to settle a Justice Department investigation into a fraudulent accounting scheme. This scheme, which ran from 2013 to 2016, involved the manipulation of financial metrics to falsely inflate profitability and mislead investors about the company's financial health. In a separate matter, Austal USA has also settled allegations for $811,259 related to supplying non-compliant valves under a Navy contract. The Securities and Exchange Commission (SEC) also announced a $24 million civil penalty against both Austal USA and its parent company, Austal Limited, for artificially lowering estimated costs to complete shipbuilding projects. The SEC claims that these actions were taken to meet or exceed Wall Street earnings expectations. Three former executives of Austal USA face ongoing litigation for their roles in the fraudulent activities.