Former Exide Tech CFO Sentenced For Consumer Fraud

September 6, 20021

EAST ST. LOUIS, Ill. The AP reprpeted that a former Exide Technologies executive and shareholder convicted of consumer fraud was sentenced to five months in prison, five months' home detention and two years' probation, federal prosecutors announced Friday.

Former Exide Chief Financial Officer Alan Gauthier was also fined $30,000, U.S. Attorney Miriam F. Miquelon said.

Gauthier in April admitted to having sent the Securities and Exchange Commission a false audit opinion letter involving a scam in which Exide sold defective batteries to Sears Roebuck & Co. for the retailer's DieHard line.

Late last month, former Exide vice president Joseph C. Calio III and former Sears buyer Gary Marks also were each fined $10,000 on fraud charges.

They both pleaded guilty in March to charges arising out of consumer fraud and illegal gratuity payments of more than $100,000 made to Exide by Marks.

Prosecutors said that between 1994 and 1997, Marks kept buying Exide-made batteries even though he knew they were defective. The payments were part of the scheme, prosecutors said.

Two other top Exide executives, Arthur Hawkins, 59, of Bloomfield Hills, Mich., and Douglas Pearson, 58, of New Hope, Pa., were convicted in June of wire fraud and conspiracy to commit wire fraud in connection to the scheme.

Hawkins, a former Exide president, and Pearson, a former vice president with the company, lied to Sears in 1994 so they could secure a larger contract, prosecutors said.

Hawkins, Pearson and Gauthier were fired in 1998 after the two companies severed ties.

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.