CORRECTED - UPDATE 1-SEC charges former execs of ESSI with backdating

(corrects word in second paragraph to "unauthorized" instead of "authorized") (Adds attorneys, Thomsen comments)

By John Poirier

WASHINGTON, Feb 6 (Reuters) - The U.S. Securities and Exchange Commission said on Tuesday it charged the former chief financial officer and former controller of Engineered Support Systems Inc. with stock options backdating fraud.

The SEC accused the former CFO, Gary Gerhardt, and the former controller, Steven Landmann, of granting employees and directors about $20 million in unauthorized compensation as a result of the backdating.

Landmann agreed to pay $886,557 to settle charges brought against him in a civil lawsuit, the SEC said.

Engineered Support Systems Inc., a defense contractor was acquired last year by DRS Technologies Inc. DRS.N.

Gerhardt's attorney, Eugene Goldman, said he had not yet read the SEC complaint and could not comment. Landmann's attorney declined to comment.

"Our actions against Gerhardt and Landmann demonstrate the commission's ongoing commitment to addressing fraudulent stock-option practices and ensuring full and fair disclosure of executive compensation," SEC Enforcement Division Director Linda Thomsen said in a statement.

The SEC said Gerhardt and Landmann participated in a six-year scheme in which they granted undisclosed, in-the-money stock options to themselves and to other officers, employees and directors.

Their scheme resulted in the company's top executives and directors receiving $15 million of the total $20 million in unauthorized compensation, the SEC said. (Additional reporting by Kevin Drawbaugh)