By Kristin Jones
The founder of a company that supplied body armor to the U.S. military was sentenced to 17 years in prison for his role in a $200 million fraud scheme, the Justice Department said.
David H. Brooks was formerly chief executive of DHB Industries Inc., a Long Island-based company that also supplied armor to law enforcement agencies. He was convicted in Sept. 2010 on charges that he overstated the company's financial performance and misappropriated corporate funds for his own use.
An attorney representing Mr. Brooks wasn't immediately available for comment. Mr. Brooks, who was convicted of 14 criminal charges, including conspiracy, mail and wire fraud, securities fraud and obstruction of justice, was also ordered to pay a fine of $8.7 million, and to forfeit $65 million in ill-gotten gains.
"DHB Industries made body armor that protected the men and women of the U.S. military, who risk their lives to keep us safe," said U.S. Attorney Loretta E. Lynch. "To David Brooks, it was merely a vehicle for plunder and a means to feed his own greed."
Mr. Brooks was convicted of stealing more than $6 million from the company to finance a horse-racing business, and to buy a luxury car, plastic surgery for his wife, a burial plot for his mother, $40,000 in leather-bound invitations to his son's bar mitzvah, and a $101,000 belt buckle adorned with diamonds, sapphires and rubies.
He was also found guilty of accounting fraud intended to increase DHB's profits and inflate the value of its inventory, the Justice Department said. After the company filed reports based on his manipulations, Mr. Brooks sold shares before the stock price plummeted and the company was delisted from the American Stock Exchange, the Justice Department said. Mr. Brooks left the company in 2006. DHB Industries has since changed its name to Point Blank Solutions Inc. (PBSOQ), and moved to Florida. The company said its policy is not to comment on Mr. Brooks or anyone else no longer affiliated with the organization.
Kristin Jones at firstname.lastname@example.org
-bth: David Brooks was convicted of financial crimes, but at the heart of this was the fact that he was making defective body armor and faking the QA process allowing the defects to be fielded with soldier and marines in combat. Since this was known for probably at least six months by the government, I suspect this is why he was not charged on this matter. What happened though is that his failure to adjust his inventory to account for the defects caused an overstatement of earnings (financial) and in that period between when this mess was detected by the government and actually when they did something about it (marines did something army continued) the financial malfeasance continued and he dumped his stock leaving his shareholders to face near bankruptcy when the news finally broke, but he had pocketed around $185 MM. After ten years I guess we can say justice was partially served. I wonder how many kids are buried over at Arlington because of him?