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Former DHB Industries execs ordered to pay $53.9M in restitution

David Brooks, one of three former DHB Industries

David Brooks, one of three former DHB Industries Inc. executives who have been ordered to pay a total of $53.9 million in restitution. Brooks is escorted to arraignment on Oct. 25, 2007, to face charges of looting his Long Island company. Credit: Howard Schnapp

Three former executives of Westbury body armor company DHB Industries Inc. have been ordered by a federal judge in Central Islip to pay $53.9 million in restitution to the company.

U.S. District Judge Joanna Seybert issued the order on Friday to complete the sentencing of former executives David H. Brooks, Sandra Hatfield and Dawn Schlegel, who previously had been convicted of defrauding the company.

In July 2006, DHB relocated its headquarters from Westbury to Pompano Beach, Florida, and in October 2007, DHB changed its name to Point Blank Enterprises, Inc.

In her ruling Friday, Seybert recounted a series of plots used by the former executives that began in 2003.

"The sheer number and diversity of these fraudulent schemes strains belief," she said, citing "millions in unauthorized compensation," and diversion of company assets to buy jewelry, cars and vacations.

Hatfield resigned as chief operating officer in November 2005; Brooks was removed as chief executive in July 2006.

In 2007, the government charged the trio with securities fraud, mail fraud, wire fraud, insider trading and conspiracy. Schlegel, the former chief financial officer, pleaded guilty to two counts of conspiracy, but Brooks and Hatfield went to trial.

In August 2013, Brooks was sentenced to 17 years in prison and 5 years of supervised release after being convicted of fraud and conspiracy. In May 2014, Hatfield was sentenced to 7 years in prison and 3 years of supervised release. In November 2014, Schlegel was sentenced to time served and 3 years of supervised release.

DHB Industries manufactured body armor for U.S. troops in Iraq and Afghanistan; DHB successor Point Blank continues to make bullet-resistant vests for customers including the New York City Police Department.

Seybert also ordered that the former executives pay restitution to shareholders of DHB during the period when the company was being looted. Those awards vary from a few dollars for individual shareholders to sums like $1.4 million to a fund run by American Century Investments based in Kansas City, Missouri.

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