David Brooks, body armor exec, sentenced to 17 years
A Westbury businessman who made a fortune as the military's chief supplier of body armor before his conviction in a massive fraud scheme was sentenced Thursday to 17 years in prison.
David Brooks, 58, was sentenced by U.S. District Judge Joanna Seybert in Central Islip to fewer than the 30 years sought by federal prosecutors and probation officials and fewer than the minimum 22 years term offered under federal sentencing guidelines.
Brooks apologized to the judge and his family for his actions. He did not apologize to the victims of the scheme.
"I can . . . see the defendant is truly unrepentant," Seybert said in court. In handing down the reduced sentence though, Seybert said she was taking into account Brooks' history of mental illness and her doubts that he could commit fraud once he is released from prison in his mid-70s.
Seybert also ordered Brooks to pay a fine of $8.7 million and serve five years' supervised release after prison.
Brooks had previously been ordered by the judge to pay about $60 million in forfeiture to the government. The amount he will owe to victims will be set at a future hearing, Seybert has said.
"I'm very sorry to take your honor's time, effort . . . and the headache of this entire matter," Brooks told Seybert Thursday in court. "I'd like to apologize to your honor for that matter from the bottom of my heart."
Brooks was accused of making $185 million by inflating the stock price of his company, DHB Industries, which manufactured most of the body armor for U.S. troops in Iraq and Afghanistan. He inflated the stock price despite unsubstantiated accusations that the armor was defective. Testimony at the trial indicated a chief supervisor of manufacturing was obsessed with turning out a quality product for the military.
Brooks also was accused of draining off $6 million from the company to support a lifestyle that had grown more extravagant. He used the money to buy a $101,000 belt buckle in the shape of an American flag encrusted with diamonds, rubies and sapphires; vitamins for his stable of trotting horses; plastic surgery for a former wife; a personal armored car; and flights between Atlanta and Madison, Wis., so a daughter could attend a Halloween party.
He reportedly spent $8 million to $10 million on a bas mitzvah for a daughter that featured hip-hop star 50 Cent and jazz saxophonist Kenny G.
Assistant U.S. Attorney Richard Lunger said before the sentencing that high-level Justice Department officials had requested the 30-year prison term.
"Today the fraud stops," Lunger said. "Today the victims get justice."
Several of Brooks' victims spoke briefly before his sentencing and told how they were affected by the loss of much of their life savings invested in DHB stock.
Anthony Tedeschi, 68, of Moorestown, N.J., a financial adviser, said he lost $600,000 in DHB stock. Several of his clients lost up to $1.8 million after Tedeschi said he advised them to buy DHB stock because it supported the military and was a sound investment.
"A lot of my clients had to sell their houses," Tedeschi said. And "couldn't send their kids to college."
"I don't have any savings anymore," Tedeschi said after court. He also said he wasn't able to retire as planned. "I live month-to-month."
Prosecutors said the stock scheme involved pumping up the value of the company stock from $2 to $20 a share through a number of fraudulent methods, including markedly overreporting the amount of armor in the company's inventory.
In addition to its length, the trial included a number of bizarre moments, including federal marshals reporting that Brooks had concealed regular pens from the courtroom on his person, because he did not like to write with the break-away pens that prisoners are given to prevent use as weapons. And at one point, FBI agents searched a waste can near the defense table reportedly searching for evidence of jury tampering. The result of that investigation has never been publicly revealed.
One of Brooks' attorneys, Gerald Shargel, said after the sentencing that "given the nature of Draconian sentences for white-collar crimes, I'm relatively pleased."
U.S. Attorney Loretta Lynch credited investigators and law enforcement with building the case against Brooks.
"The investing public can rest easier knowing that for the next 17 years, Brooks will not be able to lie, cheat and steal from anyone else."Brooks was forced out in 2006 as chief executive of his company. DHB also moved its headquarters to Pompano Beach, Fla., and changed its name to Point Blank Solutions in 2006. Point Blank filed for bankruptcy in 2010 and sold off its main assets, according to records.