A former executive at one of the country’s largest carriers, Roadrunner Transportation, has been charged with fraud by the Securities and Exchange Commission and the Department of Justice. The SEC, the federal financial watchdog, alleges that Peter Armbruster, the company’s former chief financial officer, altered Roadrunner’s financial results and misled investors.
Roadrunner last January acknowledged accounting discrepancies that occurred between 2011 and 2016, and the company reissued financial statements for 2015 and 2016. Roadrunner said then “an internal investigation found the company overstated its net income by approximately $66.5 million” in that six-year time frame.
The company also overhauled its executive team after the discovery of the accounting discrepancies, including replacing Armbruster.
The SEC alleges Armbruster intentionally inflated the company’s earnings by hiding expenses and manipulating liabilities reductions. The SEC also alleges that Armbruster and two company controllers who worked in the company’s truckload segment, Bret Naggs an Mark Wogsland, “failed to write off millions of dollars in overvalued assets and overstate receivables…”
“Investors depend on reliable financial statements to make informed decisions,” said Joel R. Levin, director of the SEC’s Chicago office. “As we allege, these former, high-ranking executives deprived investors of truthful, reliable information on Roadrunner’s financial health.”
The SEC also says that the U.S. Department of Justice has filed criminal charges against Armbruster, Naggs an Wogsland.