SEC charges ex-execs of military contractor

Financial, operations chiefs at DHB Industries accused of alleged fraud; investigation continues.
WASHINGTON (Reuters) -- Federal authorities said Thursday they filed securities fraud charges against two former executives of a major supplier of body armor to the military and law enforcement agencies.
The U.S. Securities and Exchange Commission said it charged Dawn Schlegel and Sandra Hatfield, former officers of DHB Industries Inc., alleging they "routinely overstated the value of the company's inventory and directed the booking of numerous fraudulent journal entries in order to reduce the company's cost of goods sold."
The SEC said the U.S. Attorney's Office for the Eastern District of New York also charged Schlegel and Hatfield.
Attorneys for the two former DHB executives could not immediately be reached for comment.
Schlegel was formerly chief financial officer and Hatfield was chief operating officer at the Pompano Beach, Fla.-based company, the SEC said in a statement.
The two executives falsely inflated DHB's gross profit margins, and in some instances, its net income, the SEC said.
"By manipulating DHB's gross profit margin, Schlegel and Hatfield knew that investors would be given a false portrait of DHB's operating results," SEC Enforcement Division Director Linda Thomsen said in a statement.
DHB is traded on the Pink Sheets. Its DHB Armor Group unit consists of Point Blank Body Armor Inc. and Protective Apparel Corp. of America, according to the company's Web site.
The SEC said its investigation is continuing.