Legal News

More Hot Water for Le-Nature?s Executives

By Ashby Jones

In the early days of the Law Blog, former Law Blogger Peter Lattman got a bee in his bonnet about a Latrobe, Pa.-based bottled-water company called Le-Nature’s.

Peter banged out a few pieces about the company, which had at the time, late 2006, been pushed into bankruptcy by creditors. At the time, there was word of criminal fraud, and allegations of shredded documents and falsified company minutes. Click here, here and here for Peter’s posts.

Well, Peter, over in private-equity land, take note: the other shoe has dropped on Le-Nature’s. Federal prosecutors charged the former Le-Nature’s chief executive and other officers of the defunct beverage bottler with orchestrating a scheme to defraud lenders and investors out of $806 million. (In our opinion, someone should be prosecuted for that name: “Le-Nature’s.”)

In a 29-count indictment, Gregory Podlucky, who was Le-Nature’s chairman and chief executive, and four other defendants were accused of bank, mail and wire fraud, as well as conspiracy. Click here for the AP story; here for the Reuters story; here for the Sept. 17 indictment, which was unsealed on Monday.

Podlucky was also charged with money laundering and a separate indictment charged him with income tax evasion for the 2003 to 2006 years. The government wants him to forfeit $7.18 million.

“Greg Podlucky and his co-defendants are alleged to have perpetrated a fraud against lenders and investors by dramatically overstating Le-Nature’s financial statements,” said Mary Beth Buchanan, the U.S. attorney in Pittsburgh in a statement. “This fraud is believed to be the largest in the history of the Western District of Pennsylvania.”

According to the indictment, the defendants concocted false invoices, checks and other documents to inflate Le-Nature’s financials and portray the Latrobe, Pennsylvania-based company as a “successful, growing business.”

Podlucky, who was arrested on Monday, pleaded not guilty. A call from Reuters to his attorney was not returned.

Full post as published by Law Blog - WSJ.com on September 29, 2009 (boomark / email).