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--></style><title>very old chickens coming home to
roost</title></head><body>
<div><tt><font color="#000000">From one of the people who brought us
"voodoo" economics.</font></tt></div>
<div><tt><font color="#000000"><br></font></tt></div>
<div><tt><font color="#000000">m.</font></tt></div>
<div><tt><font color="#000000">********</font></tt></div>
<div><tt><font color="#000000"><br></font></tt></div>
<div><tt><font color="#000000">Reagan Budget Chief Charged With
Fraud</font></tt></div>
<div><tt><font color="#000000"><br></font></tt></div>
<div><tt><font color="#000000">By THE ASSOCIATED PRESS<br>
Published: March 26, 2007</font></tt><br>
<tt><font color="#000000"></font></tt></div>
<div><tt><font color="#000000">Filed at 12:37 p.m.
ET</font></tt></div>
<div><tt><font color="#000000"><br></font></tt></div>
<div><tt><font color="#000000">Richard Lee/Detroit Free Press via
Associated Press</font></tt><br>
<tt><font color="#000000"></font></tt></div>
<div><tt><font color="#000000"><br></font></tt></div>
<div><tt><font color="#000000"><br>
NEW YORK (AP) -- David Stockman, a former top budget official in the
Reagan White House, and three other people were charged Monday in an
alleged securities fraud case that embroiled one of North America's
largest auto parts companies before it collapsed into bankruptcy.<br>
<br>
Stockman, who served as budget director under President Reagan, was
the former chairman and chief executive officer of Michigan-based
Collins & Aikman Corp.<br>
<br>
Federal authorities declined to comment prior to a news conference on
the case.<br>
<br>
An indictment unsealed in U.S. District Court in Manhattan charged
Stockman and three others with conspiracy to commit securities fraud,
making false statements in annual and quarterly reports, making false
entries in books and records, and lying to auditors as well as
committing bank fraud, wire fraud and obstruction of an agency
proceeding.<br>
<br>
The others charged in the indictment were J. Michael Stepp, David R.
Cosgrove and Paul C. Barnaba. It was not immediately clear who was
representing them.<br>
<br>
An investigation had concentrated on Stockman and other corporate
officers from Collins & Aikman. A spokesman for Collins &
Aikman said he had no immediate comment.<br>
<br>
The indictment said the crimes occurred as Stockman served on the
board of directors of Collins & Aikman from 2000 through May 2005.
He was chairman of the board from August 2003 until May 2005. Stepp
was vice chairman of the board of directors. Cosgrove and Barnaba also
were employed by C&A.<br>
<br>
According to court papers, Stockman responded to a financial crisis at
the company in 2005 by directing it to delay paying its bills as long
as possible.<br>
<br>
Meanwhile, Stockman allowed the company's employees to mislead
creditors about the company's revenues and the ability of Collins &
Aikman to pay its bills, prosecutors said.<br>
<br>
The government said Stockman personally decided which of the company's
suppliers and creditors would get paid and personally managed all of
C&A's liquidity during the crisis.<br>
<br>
The indictment also accused Stockman of misleading investors, saying
he wanted to hide his own and other senior management's involvement in
a fraudulent scheme to skew the company's accounting to hide its
troubles.<br>
<br>
Southfield, Mich.-based Collins & Aikman filed for Chapter 11
bankruptcy protection in May 2005. Its products included interiors,
carpets, acoustics, fabrics and convertible tops.<br>
<br>
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<br>
On the Net:<br>
<br>
http://www.collinsaikman.com<br>
<br>
http://www.maglaw.com<br>
<br>
http://www.ca2.uscourts.gov/</font></tt><br>
<tt><font color="#000000"></font></tt></div>
<div><tt><font
color="#000000">http://www.usdoj.gov/usao/nys</font></tt></div>
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