At 23.52 hours, the unescorted and unarmed Acme (Master Sigsmund Schulz) was hit in the stern directly aft of the stack by a torpedo from U-124 about one mile west of the Diamond Shoals Light Buoy, North Carolina. The explosion destroyed the engine room, killing the three men on watch and blew away the rudder and propeller, however the bulkheads forward of the engine room held. In all one officer and ten men died in the explosion and four men were wounded. When she was hit, the Acme had proceeded completely blacked out and on a non-evasive course, because many other ships were in the vicinity. Two tankers and two freighters lay ahead and the Greek steam merchant Kassandra Louloudis and two other tankers astern. USS Dickerson (DD 157) and the US Coast Guard cutter USS Dione (WPC 107) were two and four miles distant, respectively.

The remaining crew of six officers and 14 men abandoned ship in two lifeboats at 01.20 hours on 18 March, but before they left they searched the ship and found the 2nd Engineer and a fireman with both legs broken. They were helped into the boats and USS Dione (WPC 107) picked up all ten minutes later and landed them at Norfolk.
Acme settled by the stern and came on ground in the shallow water. The tanker was later towed to Lynnhaven Roads, Virginia by Navy and Coast Guard vessels, where she was anchored. The ballast was shifted until they were able to negotiate the channel into Hampton Roads and was towed to Newport News where she was repaired and returned to service.