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Feds drop fraud charges against Celadon trucking executives

Former Celadon officials had allegedly conspired to conceal ‘tens of millions of dollars in losses’

This story has been updated with additional information from the attorneys representing Bobby Lee Peavler.

Federal prosecutors on Wednesday dropped a fraud case alleging two former executives at Celadon Group devised a scheme that cost the truckload and logistics company’s shareholders more than $62 million.

The government said in its motion to dismiss nine counts of fraud each for former Celadon CEO William Eric Meek and former CFO Bobby Lee Peavler that “the indictment should be dismissed with prejudice, in the interest of justice.”

Department of Justice spokesman Steven Whitaker told FreightWaves it has no further comment on the dismissal of the charges. 

Since the charges were dismissed with prejudice, the case is now permanently closed and cannot be reopened later.

Attorneys Michael Kelly and Sergio Acosta, both of law firm Akerman LLP, represented Peavler in the case. Akerman’s legal team alleged in court that the Federal Bureau of Investigation, which investigated the case, and the federal prosecutors who brought the charges, presented false testimony, and concealed information pointing to Peavler’s innocence. Kelly and Acosta sought a dismissal on those and other grounds.

“Bobby Peavler was innocent of these charges, and we are delighted for Bobby and his family that justice has prevailed,” Kelly said in a statement.

The ongoing pandemic created several delays in the case against Meek and Peavler. A jury trial had been scheduled to begin Sept. 6 in an Indianapolis federal court.

Meek and Peavler were indicted in December 2019 on multiple charges of fraud and making false statements to a public company’s accountants while they were working at Celadon. The indictment came just weeks after the trucking giant filed for Chapter 11 bankruptcy and closed

Celadon is the largest truckload carrier in U.S. history to file bankruptcy. The north-south truckload carrier had 2,695 trucks, including 2,000 in the United States, 360 in Canada and 335 in Mexico. The company employed 3,500, including 3,200 truck drivers.

A financial scandal at Celadon emerged in 2017, when the alleged fraud scheme by Meek and Peavler was first discovered. Celadon was forced to restate several years of its financial results, going back to 2017, causing the trucking company’s stock to plummet.

The indictment indicated that by 2016, Meek, Peavler and others at Celadon knew the value of a substantial portion of the company’s trucks had declined in value in part due to a slowdown in the trucking market.

“Instead of accounting for this decline in truck values, Meek, Peavler and others allegedly devised a scheme that caused Celadon to conceal tens of millions of dollars in losses to its shareholders, banks and the investing public,” according to the indictment.

The indictment also claimed the former executives schemed with an Indianapolis-based truck dealer to trade hundreds of the company’s older and unused trucks for newer used trucks. If the overvalued trucks had been sold at their fair market value, Celadon would have suffered losses, according to the indictment.

Watch: FreightWaves carrier update for Aug. 11.

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5 Comments

  1. If these 2 men were charged by f.b.i. for fraud and false statements yet the f.b.i. is the one who presented false testimony ( perjury) and concealed info on Mr.Ps. innocence shouldnt he counter sue the f.b.i. for fraud and making false statements against him? They charged these 2 men with a crime but they are the criminals. How come they arent in prison? WHEN ARE WE GOING TO HOLD THESE PEOPLE ACCOUNTABLE THAT INCLUDES THE C.I.A. E.P.A. F.D.A. C.D.C. F.C.C. N.S.A. H.S.A.

  2. Much of the company’s problems go back to the engine problems in their fleets’ truck provider. This drove the trade in value to way below comparable trucks with other engines.
    They were trying to survive while changing to better trucks.

  3. As a former Celadon employee that dove for them for 11 years from 2000 to 2011 I think Meek and Peavler should be held accountable for what they did to Celadon and be sent to jail

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Noi Mahoney

Noi Mahoney is a Texas-based journalist who covers cross-border trade, logistics and supply chains for FreightWaves. He graduated from the University of Texas at Austin with a degree in English in 1998. Mahoney has more than 20 years experience as a journalist, working for newspapers in Florida, Maryland and Texas. Contact nmahoney@freightwaves.com