LI businessman ordered to forfeit $60M in illicit proceeds
An Old Westbury businessman who looted his body-armor company to finance a jet-setting lifestyle must forfeit $59.6 million in proceeds from insider trading, a federal judge has ruled.
David Brooks, 58, will also have to pay restitution to investors he defrauded when they bought stock in his company, DHB Industries Inc. of Westbury, which supplied body armor to law enforcement and the military.
Brooks' extravagant spending of corporate money for personal use included a $100,000 belt buckle encrusted with jewels, flights to Nantucket for dinner, and purchases of fine china, jewelry and an armor-plated vehicle, prosecutors have said.
He also used unreported corporate funds to finance a horse-racing business and host a lavish bar mitzvah for his son, spending $40,000 on leather-bound invitations, authorities said.
The amount of the restitution will be determined 90 days after Brooks' sentencing next Thursday, Judge Joanna Seybert of U.S. District Court in Central Islip ruled Thursday after two days of hearings.
During the hearings, Seybert was openly skeptical of some records submitted by Brooks, calling one corporate document so demonstrably false that it was "laughable."
At another point, attorneys for Brooks denied that he had signed a federal corporate tax return with his name and apparent signature. Prosecutors said the return was a certified copy of the one on file with the Internal Revenue Service and that it had never been amended.
Convicted by a federal jury in 2010, Brooks could face up to life in prison.
Seybert ruled almost two years ago that prosecutors had failed to meet the standard for establishing a dollar amount of the forfeiture, but she later reversed that decision.
The prosecution of Brooks, other DHB officers and related companies had slogged through seven years of proceedings in the federal courthouse in Central Islip as Brooks first protested his innocence and later claimed he was suffering from mental problems.
In 2012, Seybert denied a motion by Brooks' attorneys that she overturn his conviction because the tranquilizers and painkillers he was taking rendered him unable to assist in his own defense.
The latest hearings began each day with Seybert asking Brooks and his attorneys whether he was fit to proceed.
"How are you feeling today?" the judge asked him on Wednesday morning.
"So far, so good," Brooks replied.
The judge prodded him with questions about the medication he was taking, and he finally said, "I'm feeling OK."
Seybert asked him about his condition again Thursday morning.
"Same as yesterday," Brooks replied.
"What does that mean?" the judge asked.
"Yeah. I feel good," Brooks said.
The judge complained during the hearings that turnover on both the defense and prosecution legal teams had added to the length of the proceedings.
During Wednesday's court sessions Brooks had four attorneys at his table and more legal staff in the audience. The prosecution had five lawyers at its table, and more staff in the audience.
After an eight-month trial, a federal jury in Central Islip in October 2010 found Brooks and Sandra Hatfield, DHB's former chief operating officer, guilty of insider trading, fraud and obstruction of justice. Brooks was also found guilty of lying to auditors and falsely inflating the value of the company.
Brooks was removed as CEO in July 2006; Hatfield resigned in November 2005.
In 2006, the company moved to Pompano Beach, Fla., and changed its name to Point Blank Solutions Inc. The company filed for bankruptcy in April 2010 and sold most of its assets, records show.