John Blahnik, the former treasurer and vice president of treasury, mergers and acquisitions at auto parts maker Delphi Corp., agreed to pay $100,000 to settle accounting fraud charges with the Securities and Exchange Commission.
Blahnik was ordered to pay disgorgement and prejudgment interest totaling $50,000 and a civil monetary penalty of $50,000 by U.S. District Judge Avern Cohn. The court also prohibited Blahnik from serving as an officer or director of a public company for five years.
The SEC alleged that Blahnik participated in three fraudulent schemes at Delphi, a major GM parts supplier, filing materially false and misleading financial statements on the companys Forms 10-K for 2000 and 2003, and Forms 8-K for 2001 and 2003-2005.
According to the complaint, Delphi improperly accounted for two round trip transactions as sales rather than as financing transactions, and thereby improperly recognized a material amount in cash flow from operations and materially overstated its reported earnings per share and net income for the fourth quarter of 2000, and, combined with other misstatements, materially overstated its net income for the year 2000. In addition, from 2003 to 2004, Delphi intentionally failed to disclose material sales of accounts receivable, or factoring.
The case against the four remaining individual defendants is set for trial in the U.S. District Court for the Eastern District of Michigan on Oct. 18, 2010.
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