Head of body armor company for solders in Iraq accused of fraud

[sabra]

Source: ABC Local

(New York-WABC, Oct. 25, 2007) - The former head of a company that manufactures body armor for solders in Iraq and Afghanistan was charged today with using company money to supplement his lavish lifestyle.

Eyewitness News has learned David Brooks, the founder and former head of DHB Industries Inc., was arrested this morning by federal agents on Long Island. He faces charges that include securities fraud, accounting fraud, tax fraud and insider trading.

Brooks will be arraigned later today in federal court in Central Islip.

Authorities say Brooks bilked cash from the company, which its headquarters from Westbury to Pompano Beach, Fla., last year, to supplement his extravagant lifestyle.

Read more: http://abclocal.go.com/wabc/story?section=local&id=5725669

[saigon68]

1. No Surprise here

[Cassandra]

2. Wasn't this the guy who threw a $10 million party...

for his kid, or was that some other bit of scum?

[sabra]

3. yes the same person

[Scurrilous]

4. The Rise and Fall of a War Profiteer (July 13th, 2006)

<snip>

"In November 2005, bulletproof vest maker David H. Brooks made national headlines when he blew a pile of his war windfalls on a celebrity-studded bash in New York City’s Rainbow Room. For Brooks, the highlight of the $10 million gala was a performance by rockers from Aerosmith. So pumped was the middle-aged Long Island businessman that he reportedly donned a hot pink, metal-studded suede pantsuit to cavort onstage with Steven Tyler.

While Brooks was enjoying his rock star fantasy, dark clouds were forming over him and his company, DHB Industries. The stock was in the toilet, the Securities and Exchange Commission was investigating him, and then there was the mood-killing matter of the military recalling his company’s bulletproof vests over concerns about their bulletproofness. In hindsight, the pink-suited Brooks showed all the symptoms of a man who feared his partying days were numbered.

And indeed, as of this week, his reign as America’s most ostentatious war profiteer does appear to be over. On July 10, the DHB Board of Directors issued a terse statement to the effect that Brooks had been put on indefinite “administrative leave” pending the outcome of unspecified investigations.

The Justice and Defense Departments are jointly investigating Brooks for possible criminal fraud and insider trading. The SEC had already been looking into the company in response to shareholder lawsuits charging that DHB execs carried out a “pump-and-dump” scheme to artificially inflate profits before selling off a boatload of their stock in 2004. Brooks personally sold about $186 million worth, shortly before the share price plummeted from about $22 to around $10. Today it’s selling over the counter for less than $1. The company was booted from the American Stock Exchange last month for blowing off reporting deadlines.

Getting shoved out of a company you named after yourself has gotta sting. But Mr. DHB’s forced vacation hardly makes up for the troubles he’s caused shareholders, taxpayers and soldiers as he capitalized on the “War on Terror.”

http://www.corpwatch.org/article.php?id=13879

[Vincardog]

5. Another example of rePIGlickin values at work

[Binka]

9. Indeed What Fucking Avarice n/t

[ikojo]

10. Yes, he threw a $10 million dollar bat mitzvah

party for his 13 year old daughter!

He's been involved in class action law suits

http://blogs.wsj.com/law/2006/07/14/the-embattled-bat-mitzvah-brooks-settles-class-action/

Embattled body-armor outfit DHB Industries announced yesterday that it has agreed to pay $40 million to settle a shareholders’ suit. In addition, the company is settling a related derivative lawsuit, in which it agreed to make sweeping corporate governance provisions.

The class action arises from stock sales made by the company’s CEO, David Brooks, who was recently placed on adminstrative leave. In 2004, with the stock at an all-time high, Brooks sold $186 million worth of stock. Shortly thereafter, its equipment — used by soldiers and law enforcement — was found to have defects and the stock tanked. Earlier this year the company disclosed that the SEC was considering bringing an action against it and was investigating certain aspects of Brooks’s compensation.

[mallard]

14. Re: same guy

Sure better be the same one.

[yardwork]

6. Horrible. How do these people sleep at night?

[Rambis]

11. It is much worse

I had a friend that risked his arse getting to the airport in Iraq and when he got there no body armour. The guy in charge made him sign a requisition that said he picked up 2400 vests that never existed. He got fire bombed on the way back too and that was the last trip the unit ever made. They decided if they were not sure the equipment was there to pick up no one was going to risk their lives. The govt couldn't or wouldn't court martial the entire group so they let it go. I am sure the tax payers bill arrived safely though.

[truthisfreedom]

7. This stuff starts as a cancer at the highest level of authority... the White House.

[mopinko]

8. how about treason?

eh?

[Kurovski]

12. K&R. (nt)

[hisownpetard]

13. This is so revolting. Some kid died, for lack of body armor, so this guy could have Aerosmith

sing at his party.

There is a special corner of Hell reserved for people like him. May he go there sooner,
rather than later,

[bigworld]

15. Here he is..

[JPZenger]

16. Any Connection to Army Refusal to Consider Alternatives?

There has been a great deal of dispute over the last couple years about whether the body armor provided by this company is as good as the body armor provided by a competing company. The Army has been refusing to conduct complete side by side testing. The matter has received attention on NBC Dateline and many websites. The suspicion has been that the profiteers of this body armor company had political connections that prevented the US from considering the product of a competitor.

Among the allegations was that the competing product holds up to multiple hits, while the product used by the Army falls apart after one hit. US Soldiers were not allowed to used the competing product, although several generals were wearing it for "testing."

If this CEO is capable of insider trading and fraud, then would it be too much to suspect him of other improper conduct? Would political connections (and kickbacks???) be used to put our soldiers lives on the line?

[Blue State Bandit]

17. Top Point Blank Armor Officials Indicted

Source: Military.com


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.





Read more: http://www.military.com/NewsContent/0,13319,154813,00.html

---

As I recall, it was a Marine General who had some sort of connection to Point Blank who pushed for the rule that soldiers injured or killed using BPV's other than PBBA's "Interceptor" would not be elegible for Military benefits.

They also tried to make it illegal for active duty members to use the "Dragon Skin" BPV's that were purchaced privately when soldiers were sent into theater with no body armor at all.

What constitutes Treason these days anyway?