David Stockman, the former budget director for President Ronald Reagan, was indicted on charges of defrauding investors of Collins & Aikman Corp. while he was chairman and chief executive officer of the auto supplier.
Stockman and three others were alleged to have made fraudulent statements in order to keep the Southfield-based company from defaulting on credit agreements, according to an indictment in U.S. District Court in New York today.
Stockman was charged with conspiracy, bank fraud, securities fraud, wire fraud and obstruction of an agency proceeding.
Former Collins & Aikman Vice Chairman J. Michael Stepp, ex-controller David Cosgrove and onetime director of financial analysis Paul Barnaba were also charged in the indictment.
Stockman, who resigned in 2005, is the first CEO of a U.S. auto parts maker in bankruptcy protection to be charged criminally after regulators started investigating the industry.
Collins & Aikman filed for Chapter 11 bankruptcy protection in May 2005. Its products included interiors, carpets, acoustics, fabrics and convertible tops.
Stockman co-founded Connecticut-based buyout firm Heartland Industrial Partners LP in 1999. The company bought a controlling stake in Collins & Aikman in 2001.
All Rights Reserved. Do not reproduce, copy and use the editorial content without permission. Contact us: email@example.com.
Anytime and anywhere to know the dynamics of China's auto industry