Austal USA Settles Fraud Case with $24 Million Fine

Austal USA, an Alabama-based shipbuilder for the U.S. Navy, has agreed to pay a $24 million fine as part of a settlement concerning a long-term accounting fraud scheme that misled investors and auditors. From 2013 to July 2016, the company inflated profits related to its Littoral Combat Ship projects, which involved manipulating financial metrics to obscure rising shipbuilding costs. The U.S. Department of Justice announced that Austal pleaded guilty to securities fraud and obstruction of a federal audit, with a sentencing hearing scheduled for November 25. Additionally, the company will pay $24 million in restitution to shareholders and implement a compliance monitor and ethics program for three years. The Justice Department indicated that the initial criminal penalty could have been $73 million, but was reduced due to the company's financial situation. Three former executives were previously indicted in connection with the case.