Former Exide CEO Arthur Hawkins Sentenced to 10 Years in Battery Fraud Case

EAST ST. LOUIS, Ill. The AP reported that former chairman and CEO of Exide Technologies was sentenced Thursday to 10 years in prison for his part in a scheme in which Exide sold defective car batteries.

Arthur Hawkins, 60, of Bloomfield Hills, Mich., was convicted in June of wire fraud and conspiracy to commit wire fraud in a scam in which the batteries were sold to Sears, Roebuck & Co. for the retailer's DieHard line. He also was ordered to pay a $1 million fine.

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

Hawkins, Pearson and former Exide chief financial officer Alan Gauthier were fired in 1998 after the companies severed ties.

In September, Gauthier was sentenced to five months in prison and fined $30,000 after he admitted to sending the Securities and Exchange Commission a false audit opinion letter about the scheme.

In August, former Exide vice president Joseph C. Calio III and former Sears buyer Gary Marks also were each fined $10,000.

They both pleaded guilty in March to fraud charges related to illegal payments of more than $100,000 made to Exide by Marks.

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

In a March 2001 plea bargain, Exide Illinois agreed 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.