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Government witness breaks down at Brooks trial

Former DHB Industries Chief Financial Officer Dawn Schlegel

Former DHB Industries Chief Financial Officer Dawn Schlegel is escorted by the FBI to be arraigned Aug. 17, 2006 on securities fraud and insider trading. In March 2010 she is testifying for the prosecution against her former employer, David Brooks. Photo Credit: Howard Schnapp, 2006

"I'm a felon. It will affect me for the rest of my life," the key government witness in the case against body-armor magnate David Brooks said Thursday as she broke down in tears on the witness stand.

Shortly before that, the witness, Dawn Schlegel, who in 2005 was the highest-paid woman executive on Long Island, said in testimony in the federal court in Central Islip that she had "committed numerous crimes . . . so many things that were going on that we couldn't go through it on one day."

Schlegel, the former chief financial officer for Brooks' DHB Industries, was referring to illegal activities she had confessed to during a plea-bargain session with federal prosecutors.

And that was at only some of "the hundreds" of sessions, Schlegel said she spent in the last two years with federal prosecutors and agents detailing crimes she maintains were masterminded by Brooks at his former Westbury-based company.

Schlegel, 40, who grew up in Selden and got an accounting degree from Hofstra University, was one of the three people initially indicted in the case.

Schlegel, who had earned as much as $1.5 million a year working for Brooks, eventually agreed to cooperate with the government against him and his co-defendant, Sandra Hatfield, former DHB chief operating officer.

Brooks and Hatfield have maintained they are innocent, and their attorneys in cross-examination of previous government witnesses have appeared to be suggesting that Schlegel was responsible for much of any wrongdoing at DHB.

Brooks is accused of illegally making $190 million both by having the company support his lavish lifestyle and through a complex stock scheme.

Under questioning Thursday by Assistant U.S. Attorney Christopher Ott, Schlegel said she already has pleaded guilty to conspiracy to commit tax and securities fraud and withholding evidence from the government.

She acknowledged that, as part of the plea agreement, she now faces a maximum of 10 years in prison, versus the 25 when she was indicted.

Also as part of the deal, Schlegel said she has to forfeit $2.9 million, a pair of diamond earrings from Brooks, and 30,000 shares of DHB stock.

Schlegel's first few hours of testimony painted a picture of a company under the total control of Brooks, down to his approving almost all the checks that were issued and ordering the funding of his personal lifestyle.

She said that included hundreds of thousands of dollars for the training and upkeep of Brooks' horses, as well as several hundred dollars a month for his son Andrew's viewing of adult videos.

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