Two Former Top Executives Guilty in Exide Battery Scandal

EAST St. LOUIS, Ill. (AP) -- Two former top executives of battery manufacturing company Exide Technologies were convicted Thursday of scheming to sell defective merchandise to thousands of consumers during the 1990s.

Arthur Hawkins, 59, of Bloomfield Hills, Mich., and Douglas Pearson, 58, of New Hope, Pa., each were found guilty of wire fraud and conspiracy to commit wire fraud.

Hawkins, a former Exide president, and Pearson, the company's former vice president of North American operations, lied to secure a large contract with Sears in 1994, prosecutors said.

Former chief financial officer Alan E. Gauthier, 54, of Flemington, N.J., pleaded guilty to the charges early in the trial.

The three were fired from the company in 1998.

Prosecutors said the three men bribed Gary Marks, a former Sears Roebuck & Co. merchandise buyer, and paid him more than $!00,000, to sell batteries they knew were defective. Thousands of the batteries were sold nationwide under the Die-Hard brand name until Sears broke ties with the company in 1997.

The federal government launched an investigation in 1998 after a former Exide employee told officials about the payments.

In March 2001, subsidiary Exide Illinois and two men -- former Exide vice president Joseph Calio III and Marks -- pleaded guilty to consumer fraud.

Exide Illinois agreed in a plea bargain to a $27.5 million fine. The larger Princeton, N.J-based Exide Technologies filed for Chapter 11 bankruptcy in April.

Sears has agreed to a $62.6 million settlement in the case.

Hawkins, Pearson, and Gauthier each face a maximum of five years in prison, three years of supervised release and a possible $250,000 fine.

Calio and Marks each face up to 10 years in prison, a $250,000 fine and three years of supervised release.

Their sentencing is scheduled for late July.