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Ex-DHB exec: I didn't alert SEC about Brooks

Former DHB chief financial officer Dawn Schlegel leaves

Former DHB chief financial officer Dawn Schlegel leaves federal court in Central Islip earlier this month. As a witness for the prosecution, she is under fire from the defense team of her former DHB boss David Brooks who is charged with looting the body armor company. (March 17, 2010) Photo Credit: Ed Betz

The main witness against the body armor executive charged with looting his former Westbury-based company conceded Wednesday that she did nothing to alert authorities about what she said she knew was false information filed about his compensation.

Dawn Schlegel, the former chief financial officer of DHB Industries, has been on the witness stand in federal court in Central Islip since March 4, testifying against David H. Brooks, the company's former chief executive.

He's charged with having the company fraudulently pay almost $5 million in lavish personal expenses, as well as making $185 million in a stock scheme.

Schlegel, who is cooperating against Brooks in return for leniency concerning charges against her, has said that she believed an apparent 1997 resolution by the board of directors authorizing the payments to Brooks is not legitimate.

During a painstaking cross-examination by defense attorney Kenneth Ravenell of Baltimore, Schlegel repeatedly acknowledged that she did not object to or request changes in documents justifying Brooks' compensation that were filed with the Securities and Exchange Commission.

In the documents, some of which bore Schlegel's signature, the company explained that it paid for Brooks' living expenses in New York and Florida and for the use of his personal airplane because he had made risky loans to the company and given up some of his salary when the company went through difficult times. The documents also said that Brooks wasn't compensated for personal expenses he made on behalf of the company.

"You did not voice any concerns or stop that report, is that right?" Ravenell asked of one SEC filing. "Yes," Schlegel replied, acknowledging that she still knew it was false.

At day's end, Judge Joanna Seybert expressed frustration with the plodding pace of the trial, when attorneys asked for time off on Monday for Passover, which begins at sundown. Seybert had said they'll work until 3 p.m. Monday.

"I don't know if you've noticed, but the jury has lost patience with sidebars," she told attorneys. Indeed, Wednesday attorneys spent 1 hour and 3 minutes in nine sidebar conferences with Seybert.

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