CENTRAL ISLIP, N.Y. (AP) — Two former top executives of the nation's leading supplier of body armor to the U.S. military shared a limitless appetite to steal from the company and cover up their wrongdoing, a federal prosecutor said Monday in closing arguments at the pair's fraud and insider trading trial.
An attorney for one of the defendants argued that his client had permission to make purchases with the money he earned for the company and that prosecutors had failed to prove their case.
David H. Brooks, the founder and former chief executive of DHB Industries, Inc., and Sandra Hatfield, the former chief operating officer, are accused of falsely inflating the value of the inventory of the company's top product, the Interceptor vest, to help meet profit margin projections in a scheme that netted Brooks $185 million and Hatfield $5 million.
Brooks also is accused of looting the company treasury, spending millions on his horse racing business, as well as European vacations, private jet travel around the country and lavish gifts and parties for his family.
The six-month-long trial was expected to go to a jury later this week.
Assistant U.S. Attorney Christopher Ott blamed lengthy trial on the defendants.
"It's testament to the amount they stole. It is about the depths they sunk to. It's about greed and lies," he told jurors during a nearly five-hour summation.
Prosecutors say Brooks splurged on six-figure parties and other extravagances, including a diamond-encrusted belt buckle and a Bentley. He also allegedly spent more than $15 million of company funds on his horse-racing hobby and permitted his daughter to use the company jet for personal travel, including a trip from Atlanta to Wisconsin for a Halloween party.
There was also $40,000 spent on leather-bound bar mitzvah invitations that were expensed as company advertising, Ott told jurors. One allegedly phony invoice billed the company more than $7,300 for pens and paper clips, the prosecutor said.
Defense attorney Kenneth Ravenell, who represents Brooks, said in brief remarks to the jury that a 1997 agreement with the company's board of directors allowed Brooks to make the purchases, although prosecutors have argued that the authorizing document is a fraud.
"We do not back down from any share he earned and every dollar he made," Ravenell said, adding prosecutors "took everything he did and made it a negative."
Brooks resigned from DHB in July 2006, about the same time the company relocated its headquarters from Westbury, N.Y., to Pompano Beach, Fla., where it operates as Point Blank Solutions Inc.
Hatfield left the company in November 2005. Her attorney was expected to make closing arguments Tuesday.
The Interceptor vest, designed to withstand rifle fire and shrapnel, was made for the Marine Corps and other branches of the military. There are no allegations that the vests or other DHB products were unsafe.
Brooks and Hatfield also are accused of failing to report to the IRS more than $10 million in bonus payments they and other DHB employees received.
The company's former chief financial officer, Dawn Schlegel, has pleaded guilty to conspiracy to commit fraud and has testified for several weeks against her two former co-workers.
Brooks had been freed on a $400 million bail package until January, when U.S. District Judge Joanna Seybert found he and his brother had engaged in schemes to hide assets from the government and the court.