David Brooks, now dead , was a big time scamster who sold defective body armor to the Dept of Defense. After much litigation, on November 5, 2018 U.S. District Judge Joanna Seybert entered an order forfeiting more than $143 million in assets that had been seized from David H. Brooks. David H. Brooks was controlling shareholder of DHB Industries, Inc. The armor was used extensively in Afghanistan and Iraq and was defective. David H Brooks (DHB) was also a supplier of body armor to law enforcement agencies.
In 2010, Brooks was convicted of mail and wire fraud, securities fraud obstruction of justice and filing false tax returns. The Court had ordered forfeiture and restitution to victims. Brooks died in prison while an appeal of that case was pending.
Brooks cooked DHB’s books and records and then lied to auditors to cover-up. DHB’s shares were artificially inflated through the scams to $20 per share. Brooks started selling DHB shares which delivered $185 million. Thereafter, the price of DHB stock declined to pennies. Brooks spent DHB’s funds to finance his family’s extensive spending, including an expensive bat mitzvah party, vacations and other personal spending.
Brooks was sentenced to 17 years in prison in 2013. The Court ordered Brooks to: forfeit approximately $65 million (reduced from an earlier $185 million); an $8.7 million fine; $2.9 million in restitution to the IRS; and $91.5 million in restitution to thousands of investor victims.
The US Attorney advanced a civil forfeiture action for which the Court issued a restraint to satisfy claims against Brooks and DHB.
The seized assets were intended to compensate losses suffered by investors, the victims and by DHB’s successor company, SS Body Armor I, Inc. (SSBA).
Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the forfeiture.
“This case demonstrates the critical role that civil forfeiture plays in depriving criminals of their ill-gotten gains and putting those funds back in the hands of victims,” stated United States Attorney Donoghue. Mr. Donoghue (the Eastern District US Attorney) wrote.
“Brooks was rightfully sentenced to a lengthy prison term and ordered to pay more than $90 million in victim restitution following his conviction.
The forfeiture and restitution were to be satisfied from the seized. These assets included foreign currency, gold Krugerrands, luxury cars, jewelry and a copy of the Wall Street “Charging Bull” statue.
Brooks died October 2016. In September 2017, the Second Circuit Court of Appeals ruled that Brooks’ obligation to pay approximately $91.5 million in victim restitution was relieved by the Second Circuit because Brooks died before conclusion of the appeal.
The government then prosecuted its civil forfeiture action after Brooks died, which was not abated, against the seized assets. The global settlement resolves the civil forfeiture action as well as other litigation involving Brooks’s victims and the SEC.
The $143 million forfeiture amount represents the largest civil forfeiture recovery by the Eastern District U.S. Attorney’s Office. The Department of Justice has used the forfeited assets to compensate victims. It is expected that the funds are to be distributed to investors.
When a government forfeiture fund exists, investors are required to follow procedures to achieve a recovery.
Anthony M. Abraham, Esq., PC is experienced in claims against bankrupt estates, churning and unauthorized trading claims. If you suspect that your account has been churned, or have a claim to be made against a bankrupt company, please call us Toll Free at 1-877-430-4877 for a Free Consultation or email us at Anthony@AbrahamAttorneys.com.http://www.brokerfraud.net