Manitex International and three of its former executives have been charged with fraudulent accounting that resulted in the crane maker’s revenue and profit being overstated.

The U.S. Securities and Exchange Commission said Michael Schneider, Manitex’s former controller and CFO, engaged in a scheme with former Chief Operating Officer Andrew Rooke and Stephen Harrison, the former general manager of Manitex’s Crane & Machinery subsidiary, improperly recognize revenue on approximately $12 million in purported “bill and hold” sales of cranes.

Additionally, Rooke and Harrison were accused of creating false inventory lists and shipping documents to cover up a $1.39 million inventory shortfall at Load King, another of Manitex’s subsidiaries.

To settle the charges, Manitex agreed to pay a $350,000 civil penalty while Rooke and Schneider will pay $80,000 and $55,000, respectively.

“Manitex and [its] executives misled investors by providing false information concerning the company’s operations and financial condition,” Kathryn A. Pyszka, an associate director in the SEC’s Division of Enforcement, said in a news release.

Manitex, which is based in Bridgeview, Ill., provides cranes for customers in the oil and gas industry. According to the SEC, it began seeking new customers after a downturn in the industry in late 2015, entering into an agreement with SVW, a dormant company that never had any operations, revenue, or significant assets, to purchase cranes and rent them to third parties.

Because SVW was not able to pay for the cranes, Harrison allegedly negotiated with various financing companies and then created a financing subsidiary for SVW to conceal the fact that Manitex was making the financing payments.

Schneider approved payments, the SEC said, even though he knew the financing subsidiary’s invoices were not genuine and that their purpose “was to make SVW’s financing payments for its purported purchases of cranes from Manitex.”

As a result of the SVW fraud, Manitex allegedly overstated its 2016 net revenues by over 6.9% and its 2016 gross profits by about 8.2%. The alleged inventory fraud resulted in 2014 operating income being overstated by about 11% and its pre-tax income by about 15%.

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