Brooks prosecution rests, defense begins case

David Brooks, former head of DHB Industries, outside

David Brooks, former head of DHB Industries, outside of federal court in Central Islip. (June 3, 2008) (Credit: James Carbone)

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A former key executive for David Brooks' body-armor company testified Monday that she relied on legitimate documentation and her memory when she filed documents with the Securities and Exchange Commission saying that he was entitled to 10 percent of the company's net profits.

The witness, Mary Kreidell, the chief financial officer of Brooks' company, then DHB Capital, in 1999, was the first witness called by his attorneys as they mounted a defense against government fraud charges.

Earlier in the day in U.S. District Court in Central Islip, federal prosecutors rested their case after almost nine weeks of testimony. Brooks is accused of looting his company by illegally getting about $6 million in personal expenses, as well as $185 million in a fraudulent scheme involving company stock.

Federal prosecutors have argued that the millions in personal expenses were based on forged documents.

One of the alleged forgeries was a 1996 employment contract supposedly signed by then-DHB president Douglas Burns, entitling Brooks to the 10 percent of net profits.

Previously, Burns has testified that his name was forged to the contract. Prosecutors have said the contract was fabricated in 2004 when investigations began into the company's finances.

Under questioning by Brooks' lead attorney, Kenneth Ravenell, Kreidell testified that she had no recollection of the employment contract that Burns supposedly signed.

But Kreidell said she recalled that she had worked on an employment contract for Brooks and must have relied on it in her SEC filings, along with her own memory of events at DHB, which was once based in Westbury.

Ravenell suggested that since Kreidell recalled that there was only one employment contract for Brooks at the time, it had to be the one that Burns alleged was a forgery.

Federal prosecutor Christopher Ott, however, maintained that Kreidell was mistaken when she spoke about a valid employment contract, since none was attached to any company filings with the SEC, as is a standard practice.

And U.S. District Judge Joanna Seybert noted, in reference to the supposed actual employment contact that Kreidell spoke of, that "the original document has not been produced."

Ravenell said that was not significant, saying that a number of documents have not been located in the DHB files.

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