Feds Nab Point Blank Armor Officials

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Ripped from the front page of Military.com this morning is a story I did on the arrest of former Point Blank top officials David H. Brooks and Sandra Hatfield. Just a quick note - I write this with some sense of satisfaction since I actually met Sandra Hatfield at the Point Blank HQ in Florida back in '05. When I broke the story of vest failures in Marine Corps ordered lots, I went down there to interview her about it. She was scary, and answered my questions with statements like: "well, you tell me, you seem to have all the answers here..." Very combative and pissed off. Well, turns out she might be a crook who could spend 75 years in jail. She was pissed I'd found out about the vest failures and had documents that proved she knew about them and did nothing to correct the problems.

Oh well, I guess Karma's a bitch...

David H. Brooks, the founder of Point Blank Body Armor and former head of its parent company, DHB Industries, was indicted on a variety of financial impropriety charges Thursday after months of investigations by federal prosecutors.

Brooks, who led DHB Industries until July 2006, was indicted for insider trading, fraud, obstruction of justice and tax evasion, the U.S. attorney's office for the Eastern District of New York said in a release obtained by Military.com.

The former chief operating officer of Point Blank, Sandra Hatfield, was charged along with Brooks in the indictment. She had been served with a previous indictment for securities fraud in August 2006.

Point Blank is one of the largest suppliers of body armor to the U.S. military, including more than 1 million Interceptor outer tactical vests fielded for Soldiers and Marines in combat. The Army inked a new armor contract with Point Blank in May to supply 75,000 of its updated "Improved Outer Tactical Vest" - a more modern armor system that's lighter and provides more coverage to Soldiers.

The Army was unable provide comment on the indictment or the status of the service's relationship with Point Blank by press time.

The Marine Corps broke from Point Blank this year and went with the newly designed "Modular Tactical Vest," which is designed and manufactured by Protective Products International, based in Sunrise, Fla.

The indictment alleges that Brooks and Hatfield inflated stock prices by manipulating DHB financial records to increase earnings, including fraudulent claims of armor inventory. Additionally, the duo was charged with cutting company checks for personal gain.

"They also conspired to enrich themselves and their families at the expense of DHB by causing the company to pay personal expenses and millions of dollars above the defendants' authorized compensation," the Oct. 25 release said.

A copy of the indictment obtained by Military.com alleges a series of lavish purchases by Brooks from company coffers, including $101,500 to buy an armored vehicle for his family's personal use, $16,000 to hire a photographer for his son's Bar Mitzvah and $101,190 for a "belt buckle studded with diamonds, rubies and sapphires."

Point Blank came under sharp scrutiny from the Pentagon and other government agencies after reports emerged of test failures with its Interceptor body armor in 2005. Documents show that government testers warned Point Blank officials, including Hatfield, about the vest problems and urged an immediate fix in late 2004.

The Oct. 25 indictment alleges Hatfield and Brooks cashed in tens of millions of dollars in stock during the period testers were warning the company about vest failures. It also alleges that Brooks called a Point Blank employee who brought erroneous body armor inventory data to his attention a "[expletive] snake," and threatened to scuttle any further employment opportunities after the whistleblower resigned.

Justice officials were clearly not amused by Brooks' behavior.

"This case is fundamentally about greed and excess and deceit," said Mark Mershon, the FBI's assistant director-in-charge of the New York field office. "The defendants pillaged the assets of a publicly-traded company for personal luxuries, and they repeatedly lied - to the public, to shareholders, to the SEC and to company auditors."

"If they were thinking they could get away with it, they even lied to themselves," Mershon added in a statement.

If convicted of all charges, Brooks and Hatfield each face up to 75 years in prison and a combined $190 million in fines.

-- Christian

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