Obituaries

David H. Brooks, a former military contractor who was found guilty of insider trading and fraudulently enriching himself through company funds, died on Thursday in prison in Danbury, Conn. He was 61. A spokesman for the Federal Bureau of Prisons confirmed the death. A lawyer for Mr. Brooks’s children, Judd Burstein, said the cause was being investigated. Mr. Brooks was the founder and former chief executive of DHB Industries, one of the largest makers of bullet-resistant vests and other body armor used by the military and law enforcement. The company originally had its headquarters in Westbury, N.Y. It now operates as Point Blank Enterprises and is based in Pompano Beach, Fla. Mr. Brooks was serving a 17-year sentence after being convicted in 2010 for his role in what prosecutors described as a $200 million fraud. During an eight-month trial, spectators were riveted by testimony detailing Mr. Brooks’s lavish lifestyle, which had captured the attention of the tabloids when he threw what was rumored to be a $10 million bat mitzvah party for his daughter featuring the rapper 50 Cent and the rock group Aerosmith. His company was said to have paid him more than $6 million in personal expenses, some of it used to pay for prostitutes for his employees, plastic surgery for his wife, a burial plot for his mother and a $100,000 jewel-encrusted belt buckle. Prosecutors also accused him of funneling money from the company to support a thoroughbred horse-racing business. Mr. Brooks was accused of misleading investors about the company’s finances. He made $185 million by selling his shares when they were at a record high, prosecutors said. The case attracted a great deal of publicity, leading Mr. Brooks’s lawyers press, unsuccessfully, for a mistrial. “The accumulation of titillating and scandalous evidence has become a centerpiece of the trial and has incurably prejudiced the jury,” they argued. Mr. Brooks was found guilty by a federal jury on 17 counts, including insider trading and securities fraud. He was sentenced in 2013 and was appealing his sentence at the time of his death, Mr. Burstein said. Mr. Brooks resigned from the company in 2006. Born in Brooklyn, he graduated from New York University with a business degree. He is survived by his brother, Jeffrey, and his three children, Andrew, Elizabeth and Victoria. His marriage ended in divorce. A version of this article appears in print on November 2, 2016, on page B10 of the New York edition with the headline: David H. Brooks, a Jailed Military Contractor, 61. Order Reprints| Today's Paper|Subscribe David H. Brooks, Founder and Former Chief Executive Officer of DHB Industries Inc., Sentenced to 17 Years in Prison for Insider Trading, Fraud, Lying to Auditors, and Obstruction of Justice Brooks Orchestrated Schemes Involving $200 Million, Used Profits to Finance Extravagant Lifestyle, Including Armor-Plated Luxury Car, Plastic Surgery, and $100,000 Belt Buckle U.S. Attorney’s Office August 15, 2013 Eastern District of New York (718) 254-7000 WASHINGTON—Earlier today, in Central Islip, New York, the former chief executive officer of a Long Island-based supplier of body armor to the U.S. military and law enforcement agencies was sentenced to 17 years in prison for his leadership role in a $200 million fraud and obstruction of justice case, to be followed by five years of supervised release. DHB Industries Inc. founder David H. Brooks, who was convicted in September 2010 on 14 counts of conspiracy, mail and wire fraud, securities fraud, obstruction of justice, and lying to auditors and subsequently pleaded guilty to conspiracy to defraud the IRS and filing false income tax returns, was also ordered to pay a fine of $8.7 million and to forfeit approximately $65 million in illegally-gained profits to the United States. The court will determine the amount Brooks must pay in restitution to the victims of his fraud scheme within 90 days. The sentence was imposed by U.S. District Judge Joanna Seybert. The sentence was announced by Loretta E. Lynch, U.S. Attorney for the Eastern District of New York; George Venizelos, Assistant Director in Charge, FBI, New York Field Office (FBI); and Richard Weber, Chief, Criminal Investigation, Internal Revenue Service (IRS). “DHB Industries made body armor that protected the men and women of the U.S. military, who risk their lives to keep us safe. To David Brooks, it was merely a vehicle for plunder and a means to feed his own greed. Brooks fancied himself a master of the sport of kings. In reality, he was a selfish man who looted his company, defrauded his investors, lied to the SEC and the investing public, and sought to profit through insider trading right before the collapse of his house of cards. And he demonstrated time and time again that he believes he is above the law. Today, David Brooks learned otherwise,” stated U.S. Attorney Lynch. “Thanks to the hard work and dedication of law enforcement, the investing public can rest easier knowing that for the next 17 years, Brooks will not be able to lie, cheat, and steal from anyone else.” Ms. Lynch thanked the FBI and IRS for leading the investigation and the Defense Criminal Investigative Service for its assistance in the case. FBI Assistant Director in Charge Venizelos stated, “David Brooks repeatedly stole from his company, stole from investors, lied to auditors and regulators, and traded on inside information. He did all this to finance an obscenely lavish lifestyle paid for by his victims. Today’s sentencing is the justice the government has been seeking.” “Tax fraud was integral to sustaining Brooks’s securities fraud schemes and fueling his lust for money,” stated IRS Chief, Criminal Investigation Weber. “Brooks falsified his income tax returns in order to prevent law enforcement from discovering that he was looting DHB. IRS-CI will turn over every stone to find where criminals are hiding and spending their illegal proceeds. This case should send a message to those who feel that they can commit fraud and evade taxes—their consuming greed will always leave a money trail.” During an eight-month trial, the government’s evidence proved that Brooks and others conspired to loot DHB for personal gain. Brooks concealed his control of a related company in order to funnel more than ten million dollars from DHB to support a thoroughbred horse-racing business. Brooks also falsely inflated inventory at a DHB subsidiary to artificially boost reported profits and then lied to auditors in an effort to cover up the schemes. Although Brooks was initially released on bail conditions requiring that he account for and repatriate all foreign assets, he was re-arrested and bail was revoked in January 2010 after the government discovered that Brooks had concealed millions of dollars in accounts in the tax haven principality of San Marino as well as in London, England. He has remained in custody ever since. During his trial, Brooks smuggled prescription pills into the courtroom, created a fake e-mail that his attorney tried to use to cross examine a government witness, and then disobeyed a court order to produce evidence of the e-mail’s authenticity prompting the court to hold him in contempt. Unauthorized and Undisclosed Compensation Brooks stole more than $6 million from DHB’s coffers to finance a horse-racing business that had no relationship to DHB’s business and to finance a lavish lifestyle that included corporate-paid trips to exotic locations and the purchase of a luxury car and an armor-plated vehicle, personal jewelry, plastic surgery for his wife, a burial plot for his mother, a plasma television for his son’s bedroom, country club bills, $40,000 leather-bound invitations for his son’s bar mitzvah, and a $101,000 belt buckle encrusted with diamonds, sapphires, and rubies. To cover up his theft, Brooks created, and directed others to create, fictitious documents and misclassified these personal expenses as business expenses on DHB’s books and records. In yet another scheme, Brooks scalped tickets to sporting events and concerts that DHB paid for and then kept more than $300,000 that he generated from selling the company’s tickets. The Related Party Scheme Brooks also concealed the related party status of Tactical Armor Products (TAP), a company supposedly run independently of DHB by Brooks’ wife but in fact wholly controlled by Brooks. Through this scheme, Brooks siphoned more than $10 million from DHB to pay for obsolete body armor plates sold by TAP. The profits from these concealed related party transactions were used to pay for more than $16 million in Brooks’s personal horse racing business, jewelry,and cash investments. To conceal the scheme and deceive auditors and investors, Brooks created fraudulent multi-million dollar transactions and doctored internal DHB documents. The Accounting Frauds Brooks also engaged in accounting fraud schemes designed to increase the net income and profits that DHB reported in its press releases and filings with the Securities and Exchange Commission (SEC) by falsely inflating the value of DHB’s existing inventory, adding non-existent inventory to the company’s books and records, and fraudulently reclassifying expenses. Lying to Auditors and Obstruction of Justice Brooks attempted to cover up several of the schemes by obstructing the SEC’s investigation. Brooks and others submitted false reports to the SEC during an investigation of DHB’s executive compensation and related party schemes that began in March 2003; Brooks lied to DHB’s independent auditors about the inventory inflation fraud; and when auditors tried to look at the phony inventory, Brooks falsely claimed that it had been destroyed in a hurricane. Brooks later admitted that the supposed inventory never actually existed. Insider Trading In November 2004, several days after DHB filed a financial report with the SEC and sent shareholders a statement containing many of the same misrepresentations and omissions described above, Brooks sold more than $69 million of DHB stock. In December 2004, he sold an additional $116 million in stock knowing that that DHB’s stock price of $20 per share had been artificially-inflated through his many and varied schemes. After those insider sales, DHB stock plummeted to pennies per share and the company was de-listed from the American Stock Exchange. The government’s case was prosecuted by Assistant U.S. Attorneys Richard Lunger, Christopher Ott, Christopher Caffarone, James Knapp, Kathleen Nandan, Laura Mantell, Bonni Perlin, and Mary Dickman. This prosecution was the result of efforts by President Barack Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit www.StopFraud.gov. David H. Brooks, the founder of America's leading supplier of body armor to the U.S. military, died in prison while serving a 17-year sentence for running a massive stock fraud scheme. He was 61. The U.S. Bureau of Prisons confirmed Brooks died Thursday at the Federal Correctional Institution in Danbury, Connecticut. On Saturday, BOP spokesman Justin Long said, for privacy reasons, prison officials cannot release additional details. Brooks' lawyer told Newsday that his client became ill Thursday and was taken to a hospital. He said it was unclear what led to his death. "It was sudden and unexpected," said Richard Klugh, Brooks' federal appeals attorney in Miami. Brooks, the founder and former chief executive of DHB Industries, was convicted in 2010 of securities fraud, conspiracy and other charges for masterminding a $185 million stock swindle and using the proceeds to pay for personal luxuries. Prosecutors said he threw extravagant bar and bat mitzvahs for his children in which entertainers such as Tom Petty, Aerosmith and the Eagles performed. They said he also bought a diamond-encrusted belt buckle in the shape of an American flag for more than $100,000. During his trial in federal court in New York, prosecutors said Brooks used the company treasury for his own extravagances, with more than $6 million in unauthorized expenditures. Brooks and a co-defendant were accused of falsely inflating the value of the inventory of the company's top product — the Interceptor vest — to help meet profit margin projections. The vest, made for the U.S. Marine Corps and other branches of the military, was designed to withstand rifle fire and shrapnel. Brooks' trial lawyer told the jury that all the expenditures were approved by the company's board and in agreements between Brooks and the company. He also told jurors that Brooks had put as much as $20 million of his own money into the business and said the money he spent on personal items amounted to less than what he was owed. Brooks resigned from DHB in 2006, at about the same time the company moved its headquarters from Westbury, New York, to Pompano Beach, Florida, where it now operates as Point Blank Solutions Inc. Brooks was appealing his conviction. Klugh said Brooks died days after being transferred to Connecticut from a federal detention center. Brooks had asked for the transfer so he could be closer to his family, Klugh said.