David Brooks, the founder of a manufacturer of bulletproof vests for U.S. troops in Iraq, has been called a "war profiteer" by critics, was recently charged by the U.S. government with defrauding shareholders and, according to that indictment, allegedly spent $10 million in company funds on his daughter's Bat Mitzvah. And now he has been given the toughest bail terms the U.S. Attorney for the Eastern District of New York has issued in recent memory, according to multiple sources.
Brooks, the founder and former CEO of DHB Industries, has secured a $400 million bond with $48 million in assets and agreed to home confinement terms that include paying for an armed security guard to search each visitor who enters or leaves his home and a firm to monitor each telephone call and any use of the Internet.
The terms agreed to by Brooks and approved by a federal court judge Thursday are stricter than those given to mobsters, including John Gotti Jr., and other celebrity and white-collar defendants, such as Martha Stewart and Dr. Dre.
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In large part, the terms, dubbed "bulletproof," by one senior law enforcement official, are so severe because Brooks' wealth and alleged blatant flaunting of the law make him a far larger flight risk than these and many other defendants, two federal officials said.
Other bail terms include:
-An armed escort during a permitted monthly doctor visit.
-The monitoring of all calls, conversations and Internet use (with the exception of when they are governed by attorney-client privilege).
-Agreement that his security guards could use force to restrain him if it appeared he was attempting to violate the terms of his agreement.
"Junior Gotti was running the Gambino crime family, those terms are extensive, to say the least," said security consultant Gerald Kane. The minimum charge per day for quality security would be about $3,500, Kane said, not including the monitoring of Internet usage, which could cost significantly more.
Gotti might have been running a crime family, but he couldn’t afford the security guards and computer monitoring so he was sent back to jail. There is no danger of that for Brooks, whose terms limit the government to restraining less than $190 million in alleged proceeds of the alleged crimes under the terms of the indictment.
"John Gotti Jr. couldn't afford this kind of security. So I had to turn the contract down, and he wound up going back to jail," said Paddy Barry, president of Alliance Investigative Group.
The $10 million in company funds Brooks allegedly paid for his daughter Liza's bat mitzvah included $2 million so she and her guests could be serenaded by Aerosmith. Other celebs and rock and rap stars, including Fifty Cent, Tom Petty and Stevie Nicks, were also flown in on a company jet.
Brooks was charged with committing $200 million in fraud in an indictment that includes the allegation that he inflated the profit margins of the Interceptor vest, which is the top selling vest to the United States Marine Corp, according to the Marine Corp Times.
Authorities allege that the scheme propelled the company's stock from $2 a share in early 2003 to nearly $20 a share in late 2004, according to the indictment. When Brooks and his codefendant COO Sandra Hatfield sold several million DHB shares at that time, Brooks made more than $185 million and Hatfield more than $5 million, according to the U.S. attorney. Shortly afterward, the value of the stock plunged when reports began to surface that the body armor was defective.
At least 6,000 of his company's vests were recalled by the New York City Police Department as part of an investigation into whether they were defective.
At Brooks' arraignment in October, assistant U.S. attorney John Martin said that in the past year Brooks had purchased a single diamond worth $10 million, unspecified millions in gold and "had surreptitiously moved $22 million to banks in Switzerland and Senegal," according to Newsday.
"David Brooks grew up in Brooklyn, and that means he doesn't run away from a fight," his attorney Paul Schectman responded after the hearing. "It's a lot easier [for the government] to make allegations than to prove them."