David Stockman, three others indicted

March 26, 2007 at 2:32 PM
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NEW YORK, March 26 (UPI) -- Former Reagan administration Budget Director David Stockman has been indicted on securities fraud charges, New York court documents showed Monday.

Stockman, former chairman and chief executive of Southfield, Mich., auto parts maker Collins & Aikman, was charged with conspiracy, three counts of securities fraud, two counts of bank fraud, wire fraud and obstruction of an agency proceeding, a criminal indictment unsealed in U.S. District Court in New York said.

Others charged include former Vice Chairman J. Michael Stepp, ex-Controller David R. Cosgrove and former purchasing executive Paul Barnaba.

Also named, and pleading guilty, are Treasurer John Galante, Chief Financial Officer Thomas Gougherty, fabrics operations director Gerald Jones and customer relations executive Chris Williams, U.S. Attorney Michael Garcia said.

Collins & Aikman would not comment.

The indictment said Stockman and others manipulated the company's reported income and made false and misleading statements to the company's creditors and investors.

Stockman resigned on May 17, 2005, five days before the company filed for Chapter 11 bankruptcy protection. The company -- whose products included auto interiors, carpets and convertible tops -- had 23,000 employees at the time.

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