Mohawk Industries announced it has received subpoenas from the U.S. Attorney’s Office for the Northern District of Georgia as part of a probe into allegations that the company fabricated revenues.
A class-action lawsuit filed by the Public Employees’ Retirement System of Mississippi claims Mohawk engaged in fabricating revenues by making deliveries to customers at times when they were closed, such as Saturdays, and recognizing those delivery attempts as sales, according to a report by the Atlanta Journal-Constitution.
The suit also alleges that Mohawk overproduced product to report higher operating margins and “maintained significant inventory that was not salable.” It also alleges that Mohawk valued certain inventory improperly or “improperly delivered inventory with knowledge that it was defective and customers would return it,” according to an SEC filing from Mohawk.
“The company intends to vigorously defend itself in the lawsuit,” Mohawk stated.
The company received its subpoenas June 25.
