Celadon Group Inc. has agreed to pay $42.2 million in restitution as part of a settlement agreement announced last week by the U.S. Department of Justice. The company admitted to “filing materially false and misleading statements to investors and falsifying books, records and accounts.”
The plea deal is a result of an SEC investigation into Celadon which found that the company had deliberately inflated their financial statements.
Quality Companies LLC, a truck leasing company which was wholly owned by Celadon, wasn’t doing well. In 2016, they had over 11,000 tractor trailers. According to a press release published by the DOJ, there were “a significant number… with mechanical issues, which many drivers did not want to lease.” Instead of selling the trucks at a loss and negatively affecting share prices, executives came up with a plan.
“Between approximately June 2016 and October 2016, Quality engaged in a series of trades as a means to dispose of its aging and unused trucks,” the DOJ press release reads. “In order to avoid disclosing the losses connected to these trucks, executives executed the trades using invoices purposely inflated well above market value. Celadon ultimately used these invoices and inflated truck values to hide millions of dollars of losses from investors.”
“Celadon executives misled the investing public for a simple reason: profit,” said Assistant Attorney General Brian A. Benczkowski.
When an investigation into the fraud began, Celadon executives denied any wrongdoing. They even lied to the company’s own independent auditors. Still, the SEC investigation led to the DOJ bringing criminal charges against multiple Celadon executives including the CEO and CFO.
Celadon will be required to pay $5 million within 90 days. The remainder of the settlement will be paid in annual installments through 2023. The amount to be paid each year will be based off of the company’s performance. Any remaining balance will be due as of June 2024.
Before allegations of Celadon’s wrongdoings came to light, the company’s stock was valued at around $30 per share. It is now trading at $2.50 per share.
Source: DOJ, fleetowner, overdrive, ttnews, freightwaves, wsj, ibj
Buy a bunch of brand new trucks they said, save on fuel they said, safety is with the big companies they said…..
This is why you can’t trust them, their motivation isn’t to satisfy customers, only shareholders.
Time to find a privately owned company.
It is no safer.
Yep. Exactly.
Amen!
How much of this is going to the contractors that lost almost everything they owned for all the lies and non payments …..
Amen!
Imagine that. A mega fleet that runs new junk equipment. Figured they would make money leasing trucks to seat warmers. Wonder how many other mega fleets are inflating profits. Sure would be nice to see them go under. Maybe then we would see market manipulation go away. All we would need to do then is weed out the thieving brokers.
Get rid of companies like this and youd be surpeised how many thieving brokers go to. Worst brokers I’ve ever dealt with were from these mega crap companies.
A actually Celadon is now doing the same fraud with the brokerage business.
The only part of this article that is “news” is on the amount of the settlement and how it will be paid. I’m actually surprised that the names of the CEO, CFO, etc. aren’t listed in the article. That Celadon/Quality had an awful lease/purchase program, that they didn’t do maintenance to trucks before re-leasing them, that most people failed miserably in their program, that their business model was failing — all of these things would only be surprises to those in trucking who didn’t do any research. When you can start a business with no money down, with no requirements (can’t hold a job or make a good carrier choice? currently in bankruptcy? no problem, they’ll give you a truck), it’s probably not going to end well for anyone involved. That doesn’t make it less sad that they did this and so many people got hurt by it. The whole thing is disgusting but it’s not surprising.
The problem is, not one of the things you said got them busted.
guess who they got the money from to pay such a fine ?
P&S bailed them out. That’s where Jon Russell went from Celadon when they sold the logistics business
Never ever feel sorry for a corporation losing profits because they challenge you to work harder to produce, much less threaten you or treat you inferior. It’s all lies and deceit. You wonder why socialism is growing in popularity. Read the headlines daily of corporate America paying out fines for state and federal law violations. Let that sink in. This is money that could’ve otherwise been distributed to YOU for your generous contribution for helping them succeed. Instead, Government will do it for you. Capitalism is dying. Learn Mandarin.
Go to Cuba and Venezuela And you will see what bad things can the socialism will do to you and your family,dreemer put your feet on the ground.
Haven’t lived in any other countries have you? I wonder what sustains our roads, schools, police departments, etc etc? Hmm.
The government isn’t taking money from businesses to give it to you. I have haven’t received a dime. Quite the opposite. 61% of my taxes in California go to state pensions; pension money I’m not getting because I don’t work for the government bureaucracy.
Amen Brother! Amen!!
Another maga-carrier caught CHEATING??! NO!! Say it aint true!!! Anyone driving their junk trucks might want to consider their options & RUN DRIVERS RUN!!!!!
Lots of good trade jobs out there, no one wants to learn how to do anything unless it uses their 2 thumbs on a game console
Excuse me? I’m too OLD to get into trades. I know a lot of older folks getting into trucking because they cant do trades and cant do the soul killing grind of customer service. Maybe you should have stopped while you were ahead instead of getting all bad mouthy and judgemental.
After the old man died that company went to hell. Too bad.
Schneider?????
That crossed my mind in less than a heartbeat hoppie
Cel a con, piece of crap company if their ever was one!
Celandon and other mega carriers do the very same thing, they haven’t been caught, not yet, but probably soon, Werner, JB Hunt, Schnieder, it’s a matter of time, they’ll fall, you just can’t trust companies like these, promise you the world then have you sitting at the truck stop all week waiting on dispatch, all the time you just spent what little money you had now you have to plead for fuel money and spending money just to get by, it’s not cool for companies to take advantage of the poor sap just trying to make a liviy
Couldn’t have happened to a nicer company. I worked for them (very briefly) and they were, far and away, the worst and shadiest company I’ve ever been associated with. I hear they are trying to change after the old man died, but I still wouldn’t trust them. There are plenty of better options than a shady mega-carrier that treats drivers like disposable commodities.
Went there in 2016 could not find a truck worth leasing all the nice trucks at least the made to look good were hiding in the back 4 acres. I smelled a fraud and con job and got out of there the first day. What a bunch of con artists! Maybe we will finally get them all before long REAL TRUCKERS DONT LEASE JUNK!
Real truckers don’t lease PERIOD
Wrong, but they don’t lease with prime are swift, swift just agreed to a 200 million Dollar settlement over their lease fraud.
Real TRUCKERS do not lease trucks !!! They pay for them .
So… The company is paying restitution to whom? For fraud against investors… I notice that the truck drivers that they conned into leasing their junk equipment, aren’t getting anything… Do we investigate when stock traders get ripped off, but not when it happens to the workers? And who would have gotten the money that is being used to pay restitution? Those same investors who got ripped off the first time? The drivers who are still being ripped off? Because you can bet it’s not coming out of executive salaries or executive assets…
Interesting no jail time stated for anyone.
As soon. As there all busted the sooner rates may go up ,less trucks more money
Amen Brother! Amen!!
Greed
I knew these guys were full of BS. 1st, they tried to have me, Lease/Purchase a Tractor that had Oil Leaks and Turbo Problems! Said “They did not Fix those problems because they were Not DOT Related? Seriously! They actually tried to tell be that load of BS. 2nd, $450 a week for a Payment. Then, to fix the problems, wanted to have me buy a “Full Service Lease” for like another $550 a week ON TOP OF THE PAYMENT.. So $1,000 a week/$4,000 a Month!! For a Tractor that was 10 years old! Please! I asked the guy if he was “Smoking Crack”. I was even lied to, by the Son of the guy who’d I’d known in 2012/13, who “claimed” he took over for his father on the phone one day, after his dad “Retired”! Celadon also took the Best Tractors out of the Tractors that were available to Lease/Purchase, so IF YOU WERE NOT A DIRECT CELDON CONTRACTOR, you got to pick from the remaining Trucks. Those were the one’s that were the worst of what they had. With all kinds of Mechanical Problems, from Engines, Rear Ends, to Transmissions and Stacks! Waxahatchie, Texas had some VERY BAD Units they were trying to Lease/Purchase. Even their Sale Dept there was worthless, with lousy Units Available! Indianapolis, IN was NOT ANY BETTER!!! I’m glad they got Busted. The one thing I would have done was made Celadon PAY the $42 Million ALL AT ONCE (First 90 Days!) and put them OUT OF BUSINESS!!! These guys are some REAL Bottom Feeders! My question is who are they paying? I have never gotten any letter in the mail saying I was going to be paid from this Lawsuit. So again, who are they paying? It’s not me! So where is all the money going? Also, why did they Not have to pay it all at once? To those of us who they “Burned”, (or attempted to scam!) why are we Not getting any of this money? I hope Quality AND Celadon GO OUT OF BUSINESS. Glad Celadon’s Stock has Crashed, it’s worthless!!!
That’s all Celadon does is lie. Recruited me to do a lease purchase from Quality Truck sales. Flew me up to Indy and then I found out they had cut ties with Quality. Spent a week up there after orientation waiting on a company truck and gave up. Flew home out of my pocket.
Wow and I thought the owners kids were running company into the ground unless they were in the same boat as you can imagine I am only guessing
Well I guarantee we’ll see another company disappear soon all due to crooked people.
2.50 A share is twice what it’s worth! Never, never, never work for this company.
Greed is an old and powerful force. Remember about a camel and a needle and a rich man getting into Heaven. It is a very old story, and will continue thru our lives. Don’t expect it to go away. You have to just be very wary of who you do business with. Watch out for brokers,rattlesnakes,lawyers,scorpions, and greedy seedy folks. They will all bite you.
What’s obvious from this article is the investors didn’t do their homework on this company and the trucking business over all. If they had the first thing they would have noticed is the high turn over rate of drivers in these mega truck companies and the reason why (how they treat their drivers and maintain their equipment). Too bad whom ever wrote this article didn’t interview the mechanics and get a few comments from them as to what was going on.
Tell me that a good mechanic making good money and all the work he wants to do is going to say anything derogatory about the Company. Dream on !
The corporates do what they do best: lie, cheat and steel !!!!
The whole corporate economy it’s based upon explanation to the maximum of those most vulnerable (labor) for the benefit of a very small elite called “investors”.
Whenever “the investor” is in trouble, the laborers are already dead and buried.
You see, you need to stay glued to that frigging job and live from one miserable paycheck to the next miserable paycheck and even borrow in order to stay alive while you work and toil for the corporatists. They, on the other hand, can’t lose and are protected from losing that $50 million Cessna Citation and that $100 million luxury yacht anchored just offshore their private island in some paradise tropical archipelago in the Caribbean Sea or in middle of the Pacific.
Who gonna buy out this company next 👀!
Is this the next Falcon?
I for see bankruptcy in Celadon’s near future. Their drivers will be running for the hills.
Amazing. A major carrier in the big leagues that will require, enforce and even threaten employees and potential employees that they be 100% honest, to turn around and loose face by lying and knowingly give false info. Surprised? Really?