Military Supplier Is Charged With Fraud

[babylonsister]

Military Supplier Is Charged With Fraud
by Frank Eltman

CENTRAL ISLIP, N.Y. - The former CEO of the nation’s leading supplier of body armor to the US military was indicted yesterday 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 of DHB Industries Inc., appeared in federal court on Long Island and was ordered held without bail. His lawyer entered a not guilty plea.

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

Authorities allege the scheme propelled the company’s stock from $2 a share in 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 US 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.

more...

http://www.commondreams.org/archive/2007/10/26/4836/

[flashl]

1. Each time I read about military fraud and body armor ...

I think Duke Cunningham which means to me a solid connection to him was made at the beginning of his downfall.