NASA Director Indicted in Sgt. York Weapon Overrun : Fraud Laid to 4 at Gen. Dynamics

James M. Beggs, the administrator of NASA, was indicted today along with three other present or former executives of General Dynamics Corp. on charges of trying to hide overrun losses on the Army’s ill-fated Sgt. York anti-aircraft gun.

General Dynamics and the four men were charged with conspiring to reduce the company’s losses on their Army contract to build the prototype gun systems by illegally mischarging contract expenses to other government-funded accounts.

The seven-count indictment was returned in federal court in Los Angeles. It is the latest in a series of controversies involving General Dynamics, the nation’s third-largest defense contractor.

The individuals and the corporation were charged on one count each of conspiring to defraud the Defense Department between Jan. 1, 1978, and Aug. 31, 1981, in its function of administering and paying its contractors. They were also charged on six counts of making false statements.

A government source said $7.5 million was mischarged, resulting in a $3.2-million net loss to the government.

Beggs became head of the National Aeronautics and Space Administration on July 10, 1981, after leaving a post as corporate executive vice president of General Dynamics.

Other Defendants

In addition to Beggs, the indictment named as defendants:

Ralph E. Hawes Jr., 54, of Claremont, formerly corporate vice president and general manager of General Dynamics’ division in Pomona and now corporate vice president and general manager of the Valley Systems Division of General Dynamics.

David L. McPherson, 45, of Alta Loma, a General Dynamics employee who was program director for the anti-aircraft program at the Pomona Division.

James C. Hansen, Jr., 53, of Upland, a General Dynamics employee who was assistant program director for the program.

If convicted, the corporation faces a maximum fine of $10,000 on each of the seven counts. The individuals face maximum sentences of five years in prison and $10,000 fines on each count.

According to the indictment, the company officials fraudulently charged several million dollars worth of expenses on the contract as “bid and proposal” and independent research and development expenses.

To Reduce Losses

They did this, the indictment said, to reduce multimillion-dollar losses on the firm’s $40-million Army contract for the production of the Sgt. York prototype systems.

Contractors are reimbursed by the Defense Department for those two types of expenses, but they are not permitted to use the funds for work required by an existing contract.

The Sgt. York--also called DIVAD for Division Air Defense--was a gun mounted on a tank and was designed to protect tanks and infantry against enemy aircraft and helicopters.

The system, however, did not work. In August, Secretary of Defense Caspar W. Weinberger ordered further work abandoned--the first such cancellation in years.