Judge in Brooks trial to allow defense to use SEC testimony

Over the strenuous objections of federal prosecutors, a federal judge has said she will allow lawyers for defendant David Brooks to read into the record the Securities and Exchange Commission testimony of two former board members of the body-armor magnate's company supporting his claims of innocence.

Gary Nadelman and Jerome Krantz have declined to testify at the trial in federal court in Central Islip, invoking their Fifth Amendment privilege against self-incrimination, Judge Joanna Seybert noted in her opinion last week.

Brooks' lead defense attorney, Kenneth Ravenell, says that unless the testimony is allowed into evidence it will keep Brooks from getting a fair trial.

In testimony before the SEC in 2004, Nadelman said that documents from the former Westbury-based DHB Industries showed that chief executive Brooks was entitled to receive millions of dollars for personal expenses, and Krantz said he believed that such an arrangement existed.

Brooks is charged with looting the company of more than $6 million in personal expenses, as well as masterminding a stock scheme that netted him $185 million.

But federal prosecutor Richard Lungher has argued that allowing the testimony without giving prosecutors a chance to cross-

examine Nadelman and Krantz is almost unprecedented, and would allow the jury to hear, at best, misleading testimony and, at worst, perjured testimony.

Lungher noted that Nadelman, in a 2007 statement to the FBI, recanted his SEC testimony, saying he never signed a 1997 board resolution allowing Brooks to receive the compensation and he believed that document was a forgery.

Krantz's testimony to the SEC was less precise, the prosecutor argued. At the time, Krantz said he believed Brooks was entitled to the money, but he had no direct knowledge of how the arrangement came about.

Seybert ruled that while Brooks can use the SEC transcripts, the government is entitled to introduce contradictory evidence, such as Nadelman's retraction to the FBI.

In any event, Brooks might not be in a position to introduce the SEC testimony because federal prosecutors said this week they will grant Nadelman immunity, forcing him to testify, under penalty of perjury. They added they haven't decided whether to grant Krantz immunity or allow his testimony to be introduced.

Krantz's attorney, Alan Vinegrad of Manhattan, said Tuesday he had no comment.

Nadelman's attorney, Robert Gottlieb, who has offices on Long Island and in Manhattan, said Tuesday that if his client is called to testify, "he will testify truthfully about everything." But Gottlieb would not say whether the SEC testimony or the statements to the FBI were accurate.