Aug. 10 (Bloomberg) -- David Brooks, the Point Blank Solutions Inc. founder convicted by a jury last year of committing a $185 million fraud and looting the military contractor, pleaded guilty to tax charges.
Brooks entered the plea today in federal court in Central Islip, New York, according to Robert Nardoza, a spokesman for U.S. Attorney Loretta Lynch in Brooklyn.
Brooks, 56, a former chief executive officer, and former Chief Operating Officer Sandra Hatfield were convicted last September in Central Islip on charges of insider trading, fraud and obstruction of justice. Point Blank, which makes body armor for the military and police, filed for bankruptcy protection in April 2010. The company was formerly called DHB Industries Inc.
“We’re going to now turn our attention to the remaining issues of the case -- forfeiture, restitution and our motion for a new trial based on our contention that he was incompetent during a significant portion of the trial, partly because he was on medication,” Brooks’s lawyer Gerald L. Shargel said today in a phone interview.
Brooks today pleaded guilty to one count of conspiracy to defraud the U.S. and two counts of filing a false tax return. He failed to report $189,400 in dividend and interest payments in 2003 and $762,500 in compensation in 2004, the government said.
In 2009, U.S. District Judge Joanna Seybert separated the counts from the others Brooks was tried on because they weren’t sufficiently related, she said.
At last year’s trial, prosecutors said Brooks and Hatfield lied about the inventory of “Interceptor” combat vests shipped to the U.S. armed forces and falsely inflated the company’s value and their own stock.
Brooks earned $185 million in the scheme while Hatfield earned $5 million, according to prosecutors.
Brooks spent company funds “lavishly” on himself and his family, including purchases of a Bentley and a Ferrari and grooming of 100 purebred trotting horses, Assistant U.S. Attorney Richard Lunger told jurors in his opening statement at the trial in January 2010.
The scheme took place from July 2000 to July 2006, according to the government. In July 2006, DHB moved its headquarters from Westbury, New York, to Pompano Beach, Florida.
Brooks has been in custody since January 2010.
The case is U.S. v. Brooks, 2:06-cr-00550, U.S. District Court, Eastern District of New York (Central Islip).
To contact the reporter on this story: Thom Weidlich in Brooklyn federal court at firstname.lastname@example.org.
To contact the editor responsible for this story: Michael Hytha at email@example.com.