Lawyers for former Austal executives ask judge to dismiss federal fraud charges

MOBILE, Ala. (WALA) – Lawyers for three former Austal USA executives want a federal judge impeached criminal fraud charges It’s about allegations that they misled investors.

A grand jury indicted Craig Perciavalle, who was the shipbuilder’s president at the time; Joseph Runkel, the company’s director of financial analysis; and William Adams, former littoral combat ships program director.

Prosecutors allege the defendants conspired to underestimate the cost of building littoral combat ships. They say this artificially inflated the company’s stock price from 2013 to 2016, ultimately forcing Austal to lose more than $100 million in value.

But attorneys for the defendants argue in a court filing that previous U.S. Supreme Court decisions make clear that federal fraud laws do not apply to this case.

The file states, “First of all, the indictment unacceptablely alleges a plan whose purpose is neither money nor property.” “In fact, there is no allegation in the indictment that any person or organization was or was intended to be deprived of anything. On a generous reading, this comes close to a claim that ‘shareholders and investors’ are being deprived of accurate information, but the Supreme Court has recently ruled that such a right is not a recognized property right within the meaning of the wire fraud statute. ”

A federal judge gave the U.S. Attorney’s Office until Friday to respond.

It is claimed in the defense file that the alleged behavior is not a crime according to the law.

The application states, “Since no crime is specified in the indictment and its flaws cannot be remedied, it must be rejected on the merits.”

In August, Austal pleaded guilty to the charge and agreed to pay $24 million to settle the lawsuit filed by the Department of Justice. The Department of Justice also has a pending case. civil lawsuit against the defendants in the criminal case.

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