David H. Brooks made a lot of money selling body armor to the Defense Department for troops in Iraq and Afghanistan through a company, DHB Industries, that he led until 2006. But now Brooks stands accused of orchestrating a $190 million stock fraud scheme aimed at enriching himself and another top company employee, the New York Times reports.
In the course of Brooks' trial, currently underway on Long Island, New York, it was revealed that DHB Industries covered some $6 million in his personal expenses. Among the items paid for by the company (using, of course, dollars that came from the Defense Department and, ultimately, the taxpayers): "a $100,000 American-flag belt buckle encrusted with rubies, sapphires and diamonds."
COMMENTS
In reading Jimmy 37's comments, it is clear he does not understand corporate financing. Being a retired Army contracting person, I have the advantage of understanding this. The corporate income to pay for Mr. Brook's personal excesses would have been classed as indirect expenses, either "overhead" or "General & Administrative" (commonly called G&A).. These costs would have been entered in the company's books as one or a combination of these, which go into a calculation of a per centage of direct costs (using a set of direct costs chosen in advance by the company. Overhead is usually based on direct labor costs; G&A based on all direct cost. What IS allowed as an indirect cost for determining the per centages is strictly regulated, and monitored by DCAA (Defense Contract Audit Agency) audits. Bravo to the alert auditor who discovered this abuse!!
Don 08/02/10 09:49 am ET
He will only get his wrist smacked and continue as before! I'm tired of these CEOs getting rich from the American Taxpayer and it's brought to light and NOTHING is done except an expensive trial and equittal!
Ann 08/02/10 08:53 am ET
BORING. Did he cheat the taxpayer by overcharging for his merchandise or did he just use his company as his personal piggy bank? I would care if he overcharged. Using his company as a piggybank is a tax issue. That's why we need a consumption tax, not an income tax.
jimmy37 07/28/10 11:34 am ET