The former chief financial officer for Roadrunner Transportation has joined two other ex-financial executives from the company as defendants in a criminal action.
According to both news reports and court documents, Peter Armbruster, the CFO, was indicted and arrested earlier this week in an action taken in the Eastern District Court for Wisconsin, where Roadrunner is located. In an expanded indictment, Armbruster joins former controllers Mark Wogsland and Bret Naggs who were indicted in June of last year.
Among the charges in that first indictment were conspiracy to make false statements, falsifying the company’s books, records and accounts, and conspiracy to commit securities fraud and wire fraud.
The charges in the new superseding indictment are similar but also include charging Armbruster with bank fraud. Armbruster had been CFO for roughly seven years.
Armbruster, Wogsland and Naggs also were charged by the Securities & Exchange Commission this week with fraud “for manipulating the company’s financial results in order to meet earnings targets and projections,” according to an SEC prepared statement.
The alleged fraud broke in May 2017 and led to the ouster of Armbruster and then CEO Mark DiBlasi, who has not been charged in connection with any accounting irregularities. However, DiBlasi was pushed out in favor of Curt Stoelting who had joined the company in 2016 as president and COO. Stoelting remains CEO and recently engineered a major restructuring of the firm that led to Elliott Partners owning more than 90% of what is still a publicly-traded company. Roadrunner has said it is cooperating with all the investigations.
According to the SEC statement, the executives “hid incurred expenses by improperly deferring and spreading them across multiple quarters to minimize their impact on Roadrunner’s net earnings.” The three men also “manipulated” the value of liabilities to create a “cushion” to help the company in quarters where such a boost to the company’s earnings might be needed. The SEC also said they did not write down the carrying value of assets and receivables that should have undergone that reduction.
While Armbruster was CFO of the corporation, Naggs and Wogsland were controllers of Roadrunner’s truckload division.
