BUSTED: David Brooks, indicted Body Armor Official, is led to court.
Posted on 10/26/2007 3:56:34 AM PDT by Former Military Chick
David H. Brooks, the founder of Point Blank Body Armor and former head of its parent company, DHB Industries, was indicted on a variety of financial impropriety charges Thursday after months of investigations by federal prosecutors.
Brooks, who led DHB Industries until July 2006, was indicted for insider trading, fraud, obstruction of justice and tax evasion, the U.S. attorney's office for the Eastern District of New York said in a release obtained by Military.com.
The former chief operating officer of Point Blank, Sandra Hatfield, was charged along with Brooks in the indictment. She had been served with a previous indictment for securities fraud in August 2006.
Point Blank is one of the largest suppliers of body armor to the U.S. military, including more than 1 million Interceptor outer tactical vests fielded for Soldiers and Marines in combat. The Army inked a new armor contract with Point Blank in May to supply 75,000 of its updated "Improved Outer Tactical Vest" - a more modern armor system that's lighter and provides more coverage to Soldiers.
The Army was unable provide comment on the indictment or the status of the service's relationship with Point Blank by press time.
The Marine Corps broke from Point Blank this year and went with the newly designed "Modular Tactical Vest," which is designed and manufactured by Protective Products International, based in Sunrise, Fla.
The indictment alleges that Brooks and Hatfield inflated stock prices by manipulating DHB financial records to increase earnings, including fraudulent claims of armor inventory. Additionally, the duo was charged with cutting company checks for personal gain.
"They also conspired to enrich themselves and their families at the expense of DHB by causing the company to pay personal expenses and millions of dollars above the defendants' authorized compensation," the Oct. 25 release said.
A copy of the indictment obtained by Military.com alleges a series of lavish purchases by Brooks from company coffers, including $101,500 to buy an armored vehicle for his family's personal use, $16,000 to hire a photographer for his son's Bar Mitzvah and $101,190 for a "belt buckle studded with diamonds, rubies and sapphires."
Point Blank came under sharp scrutiny from the Pentagon and other government agencies after reports emerged of test failures with its Interceptor body armor in 2005. Documents show that government testers warned Point Blank officials, including Hatfield, about the vest problems and urged an immediate fix in late 2004.
The Oct. 25 indictment alleges Hatfield and Brooks cashed in tens of millions of dollars in stock during the period testers were warning the company about vest failures. It also alleges that Brooks called a Point Blank employee who brought erroneous body armor inventory data to his attention a "[expletive] snake," and threatened to scuttle any further employment opportunities after the whistleblower resigned.
Justice officials were clearly not amused by Brooks' behavior.
"This case is fundamentally about greed and excess and deceit," said Mark Mershon, the FBI's assistant director-in-charge of the New York field office. "The defendants pillaged the assets of a publicly-traded company for personal luxuries, and they repeatedly lied - to the public, to shareholders, to the SEC and to company auditors."
"If they were thinking they could get away with it, they even lied to themselves," Mershon added in a statement.
If convicted of all charges, Brooks and Hatfield each face up to 75 years in prison and a combined $190 million in fines.
A copy of the indictment obtained by Military.com alleges a series of lavish purchases by Brooks from company coffers, including $101,500 to buy an armored vehicle for his family's personal use, $16,000 to hire a photographer for his son's Bar Mitzvah and $101,190 for a "belt buckle studded with diamonds, rubies and sapphires."
At least the indictment was not for selling defective products, we can give some small thanks for that.
No mention of the reported $10 million bat mitzvah he threw for his daughter that had performers such as Tom Petty, 50 Cent, etc.?
“belt buckle studded with diamonds, rubies and sapphires.”
A lousy crook and had bad taste to boot.
LLS
one of those “take the mitzvah out of the bar/bat mitzva” parties
Brooks made headlines in November 2005, when he rented two floors of the Rainbow Room for the bat mitzvah of his daughter, Elizabeth. He reportedly sent the company jet to fly Aerosmith in from Pittsburgh, paying them a cool $1 million. In return, they let his nephew play drums.
In honor of the band's appearance, Brooks changed from a black leather suit into a magenta suede biker outfit covered with chains.
The indictment said the body-armor tycoon spent $122,000 of company cash on iPods and digital cameras for his guests.
It also revealed he shelled out $20,000 for leather-bound invitations to his son's bar mitzvah in 2000.
According to the indictment, Brooks lined his pockets by having DHB underwrite his lifestyle and by artificially inflating the value of company stock. Brooks also was accused of evading taxes by giving money to charities he ran.
Point Blank came under sharp scrutiny from the Pentagon and other government agencies after reports emerged of test failures with its Interceptor body armor in 2005. Documents show that government testers warned Point Blank officials, including Hatfield, about the vest problems and urged an immediate fix in late 2004.
Opps. Well, scratch my previous statement.
MARINE CORPS SYSTEMS COMMAND, QUANTICO, Va., Nov. 20, 2006 — Rather than waiting for the next generation of body armor in the years to come, the Marine Corps listened to its warfighters and provided them a solution. That solution is the Modular Tactical Vest (MTV). Providing enhancements to the existing vest, the MTV will instill greater comfort and confidence in Marines’ warfighting capability.
The MTV is a load bearing vest and wears more comfortably than the existing Outer Tactical Vest (OTV). The MTV optimizes the same OTV ballistic protection and enables the Marine to easily configure components of their combat load to best meet specific mission requirements. Responding to an Urgent Universal Need Statement, submitted in Jan. 2006, the Marine Corps Systems Command (MARCORSYSCOM) developed the MTV.
Protective Products International.
I wonder if the company will be barred from doing business with the government. Back in the 80’s, GE was banned over some jet engine fiasco and you couldn’t buy light bulbs or appliances made by GE from the Base Exchange and NBC was removed from on-base cable TV.
It’s always the bling that gets them.
Dennis Kozlowski (Tyco) had his $5000 shower curtain and $2million birthday bash.
Did they develop the armor technology, or just the fit and form of the MOLLE vest?
Military services routinely have significant say in the design of their procurement items, but the core technologies are usually private sector.
wow
Lock. Them. Up.
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