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Ex-CFO says DHB paid for Brooks' mom's grave

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

David Brooks even had his body-armor company illegally pay for his mother's burial plot and his children's comic books.

That was the testimony Monday of the key government witness, Dawn Schlegel, against her former boss.

Brooks, the former head of then Westbury-based manufacturer DHB Industries, is charged with looting his company of almost $5 million in personal expenses and cheating his stockholders of more than $185 million in a stock-fraud scheme.

Schlegel, the company's former chief financial officer, has pleaded guilty to fraud and is cooperating with the government; this is her third week as a witness in Brooks' trial in federal court in Central Islip.

Under questioning by federal prosecutor Christopher Ott, Schlegel said Brooks spent "thousands of dollars" of DHB money for a burial plot for his mother, Anna, who is still alive and living in Florida. Schlegel did not say how much Brooks spent on comic books.

Brooks' attorneys have said that their client had a resolution of the DHB board dating back to 1997 entitling him to have the company pay for his personal expenses.

Federal prosecutors have argued that the document is a forgery manufactured in 2004 to head off an investigation of the company by the Securities and Exchange Commission.

Schlegel said the 1997 resolution "magically . . . appeared" in the file of board resolutions she personally kept in her office. This happened in 2004, she said, after Brooks insisted she go through the resolutions after one of his aides had borrowed the file to prepare it for the SEC.

" 'I'm entitled,' " Schlegel said Brooks told her, indicating the document.

Schlegel said she replied, "Sure you are. . . . I never saw that before. . . . I don't see how this is helpful."

Federal prosecutors previously have pointed out that board resolutions usually have the heading that the action is being taken by "unanimous consent." The 1997 resolution had the misspelling "unaimous" in the heading, prosecutors have noted.

Schlegel also said Brooks had the company pay for bicycles for his children and a Mercedes-Benz for daughter Victoria, a subscription to Playboy magazine, tennis lessons and a $100,000 armored Ford Expedition with an air-filtration system.


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