Body Armor Execs Indicted For Fraud

(AP)  The former CEO of the nation's leading supplier of body armor to the U.S. military was indicted Thursday on charges of insider trading, fraud and tax evasion in a scheme that netted him more than $185 million, prosecutors said.

David H. Brooks, 53, the founder and former chief executive of DHB Industries Inc., appeared in federal court on Long Island and was ordered held without bail. His lawyer entered a not guilty plea.

"David Brooks grew up in Brooklyn and that means he doesn't run away from a fight," attorney Paul Shechtman told reporters after the proceeding.

The charges were outlined in a superseding indictment that also named Sandra Hatfield, 54, the former chief operating officer of DHB. The pair was accused of falsely inflating the value of the inventory of DHB's top product, the Interceptor vest, to help meet profit margin projections.

The vest, designed to withstand rifle fire and shrapnel, was made for the Marine Corps and other branches of the military.

Last year, Hatfield and former Chief Financial Officer Dawn Schlegel were indicted on charges of insider trading in the same scheme to inflate the value of the vests. Hatfield, who was released on $1 million bond in that case, is expected to be arraigned on the new charges next week.

Hatfield's lawyer, Roland G. Riopelle, said the charges announced Thursday are "basically the same" as those in the previous indictment and predicted his client would be acquitted at trial.

Schlegel was not named in the superseding document. Prosecutors declined to comment on whether she may have taken a plea deal; her attorney did not immediately respond to a phone message.

Authorities allege the scheme propelled the company's stock from $2 a share in early 2003 to nearly $20 a share in late 2004. When the pair sold several million DHB shares at that time, Brooks made more than $185 million and Hatfield more than $5 million, according to the U.S. attorney's office.

When an employee identified only as "John Doe" confronted Hatfield in late 2004 with evidence that the inventory of vests was overvalued by up to $8 million, prosecutors say she told him the company "could not 'take a hit' of reducing the valuation to the correct amount."

Brooks and Hatfield also are accused of failing to report more than $10 million in bonus payments to themselves and other DHB employees to the IRS.

Brooks also is accused of using DHB funds to buy or lease luxury vehicles for himself and family members, and to pay for vacations, jewelry, cosmetic surgery, country club bills and family celebrations.

Prosecutors say he threw lavish bar and bat mitzvahs for his children in which entertainers like Tom Petty, Aerosmith and the Eagles performed.

Brooks, who owns more than 100 horses and races them at harness tracks around the country, also used DHB funds for his private horse racing business, prosecutors said.

During the bail hearing, Assistant U.S. Attorney John G. Martin argued that Brooks was a flight risk and should not be granted bail because he may have millions in assets hidden overseas.

Shechtman argued he wasn't, noting that Brooks, who had moved to London after the two women were indicted, moved back to New York earlier this year despite knowing he could be arrested in the case.

U.S. District Judge Joanna Seybert ordered the hearing continued until Monday.

Brooks resigned from DHB in July 2006, about the same time the company relocated its headquarters from Westbury to Pompano Beach, Fla. Hatfield left the company in November 2005.

Also Thursday, the Securities and Exchange Commission filed related civil charges against Brooks, accusing him of manipulating DHB's earnings and funneling millions of dollars out of the company through fraudulent transactions with an entity that he controlled.

In a civil lawsuit filed in federal court in Miami, the SEC alleged that Brooks profited from selling his DHB stock at the end of 2004 when the stock price was at its height, and that he did so while possessing significant nonpublic information in violation of insider trading laws.

The SEC is seeking unspecified fines against Brooks, restitution of any ill-gotten gains, return to DHB of his bonuses and profits from stock sales, and a prohibition against him serving as an officer or director of any public company.

If convicted, Brooks and Hatfield could face up to 70 years in prison.

[lloydbest1]

Posted by brianbwb at 11:43 AM : Oct 27, 2007

The 72 hour limit''s about up. Just wanted to get back and thanks for the leads.....

Haven''t read the whole thing yet nor have I checked all the links referenced but so far....my GAWD!!!!

What does Bush and his mob have to do to get indicted, anyway...rob a bank? Goose an Alter Boy? What????

[brianbwb-2009]

http://www.defensereview.com/article842.html

check it out.

[brianbwb-2009]

And this exerpt from DefenseReview.com

"It has been confirmed that;

Gen. Moran now has in his possession ballistic test data/results clearly showing that Pinnacle Armor''s Dragon Skin body armor has been tested to DoD standards and exceeded each standard and far exceeded the standards to which the plate technology is tested at a civilian test lab. Is the DoD/U.S. Army on testing SAPI, ISAPI, and ESAPI plates (ceramic hard armor) below civilian standards? We can only speculate as to why the DoD/U.S. Army would want SAPI, ISAPI, and ESAPI plates and/or Dragon Skin (or any body armor tech for that matter) intended for military use to be tested to less than civilian standards, when our infantry warfighters are facing military-level ballistic threats (assault rifles, machine guns, etc.) from the enemy. If the DoD/U.S. Army is testing the SAPI, ISAPI, and ESAPI ceramic armor plates to lower standards, this could at least partially explain the durability issues that they suffer on the battlefield, as well as the same limited coverage U.S. infantry warfighters have had for the past ten years."

You think my post was chilling, you should really read this entire article...

[brianbwb-2009]

eo Lloybbest

Sorry it took so long, but I am in Singapore, 12 hours ahead of you.

I wrote my representative the day I heard that My friend''s son was forbidden by order to wear the dragon skin armor, paid for by his family as a gift. this was what, some five years ago.

I will point you to a starting place to check my assertions, I get my info from sources that have no real reason to play "left vs. right" politics.

www.military.com/soldiertech/0,14632,Soldiertech_060420_dragon3,,00.html - 39k - for one, there are various military and non military and law enforcement publications that discussed this for quite some time, some until today.

Peace.

[robertsgt40-2009]

Imagine my absolute shock that someone would profiteer from the war. Just think if someone would "investigate" Haliburon,KBR,GE,Cheney,Bush Wolfie,Pearljam,Feith,Condie and all the rest that sold out our country...Nahh. But CBS has done their part at least in covering it up.

[lloydbest1]

Oops.

Brian, I guess you did as I suggested while I was composing my next post. Sorry about that.

Still we should keep the heat on as it were...Thx, Lloyd

[lloydbest1]

Brianbwb:

I don''t generally respond to others'' comments to my posts; in my opinion this is not a chat room. But this one time....

Read the question at the end of my post at 8:23 AM. It is not a frivilous one. I am very serious when I consider the possibility that The president and his vice president might be liable for murder IF it can be proven beyond a reasonable doubt that DHB''s product is, in fact, trash; that Bush and/or Cheney gave DHB exclusive right to manufacture this product and market it to our defense; that they insisted that this vest and no other may be used; and that they had prior knowledge that the armor was inferior for the job it was asked to do.
Where ever did you get your information from, anyway? Your posts of 7:49 and 8:12 are chilling indictments. We need to keep this one visible. I have already dashed a note off to my representative regarding this case and the possible White House involvement in it. I would like to ask you do the same (if you haven''t already) and since you have access to information I do not, ask you to hand some of it off to an attorney who might be able to determine the extent of Executive guilt (if any) and take action.....

[brianbwb-2009]

The "war on terror" is a fraud and the largest bank (US Treasury) heist in world history.
Posted by tuckerndfw

Actually it pales next to the estimated 15 trillion adjusted dollar cost of Vietnam, but is still one that will bankrupt the US (again).

[brianbwb-2009]

Oh and by the way, he was forbidden by order to wear his own, safer, family paid for vest...

[brianbwb-2009]

.then can we consider charging Brooks and Hatfield - as well as two infamous goons in the executive branch of our government - with capital murder?
Posted by LloydBest1

I would certainly consider it, I would also consider that even I knew of this only a few months into the war, when a friend''s family bought him a Dragon Skin vest to take to Iraq, as the father was a police officer, who bought his own dragon skin because it was common knowledge that the Interceptor was inadequate.

If I, a civilian knew that much way back then, surely the facts must be known to far more than just the a-holes in the Whites'' House, for example, the representatives of the districts the factories are located, the military brass in the Pentagon, etc. Quite a few new inmate candidates, on both sides of the muddy aisle.