PITTSBURGH (AP) — A federal grand jury accused the former chief executive officer of a defunct soft-drink-maker and four others connected to the company of perpetrating an $806 million bank fraud, much of which went to the ex-CEO and his family.
Gregory Podlucky, 48, of Ligonier, provided financial institutions and equipment suppliers "with dramatically false financial statements" to get equipment leases and loans for Latrobe-based Le-Nature's Inc., said U.S. Attorney Mary Beth Buchanan. She called it the "largest fraud in the history of the Western District of Pennsylvania," a 25-county area.
According to the 29-count indictment unsealed Monday, lenders and investors poured money into the company on the basis of the phony financial statements.
The government wants Podlucky to forfeit bank accounts worth more than $7 million. Investigators have already seized tens of millions of dollars in jewelry and an 8,000-piece model train collection worth about $1 million from Podlucky.
Authorities believe Podlucky spent much of the money on himself or his family, as he once drove a Hummer and a high-end Mercedes, and was building a mansion in Ligonier, 45 miles southeast of Pittsburgh.
Buchanan said the loss to the lenders and investors continues to exceed $700 million.
Podlucky doesn't have a listed phone and his attorney, Alexander Lindsay, of Butler, did not immediately return calls.
Le-Nature's former accounting director, Tammy Jo Andreycak, 40, of Latrobe, is named but not charged in the indictment. She is cooperating with authorities under terms of her guilty plea to bank fraud, conspiracy and other charges in April 2008. She admitted fudging records at Podlucky's behest.
The criminal investigation grew out of Le-Nature's forced bankruptcy in October 2006, when a judge determined it was likely Podlucky and other company directors had engaged in criminal activity.
Turnaround firm Kroll Zolfo Cooper told the bankruptcy court that Le-Nature's financial statements showed $275 million in revenues for 2005, when the actual figure was closer to $32 million.
The bankruptcy has spawned a raft of litigation, including a racketeering suit brought by the bankruptcy trustee that accuses Charlotte, N.C.-based Wachovia Corp. of aiding the scheme. Earlier this month, a federal judge ruled the trustee can continue to pursue Wachovia for allegedly continuing to lend money to Le-Nature's despite red flags raised by Wachovia's own analysts.
Wachovia has said it was duped into lending nearly $600 million that Podlucky allegedly misspent. The bank said in an e-mailed statement Monday that it was a victim and looked forward "to the perpetrators of the Le-Nature's fraud being brought to justice."
Buchanan said she "can't comment with respect to statements made by Wachovia," but said "the investigation into other related frauds involving Gregory Podlucky is continuing."
The indictment was returned Sept. 17, but wasn't unsealed until Podlucky and three of his four co-defendants were arrested Monday. They all appeared before a federal magistrate and were released pending trial.
Also arrested were former company directors Andrew Murin Jr., 53, of McMurray; Robert B. Lynn, 65, of Ligonier; and Jonathan Podlucky, 35, who is Gregory's brother and lives in Greensburg. Authorities had a warrant to arrest the fifth defendant, Donald Pollinger, 64, of Charlotte, N.C., a financial broker hired by Le-Nature's.
Lynn's attorney didn't return a call for comment. Jonathan Podlucky's attorney, Charles Porter, said his client "maintains his innocence." Federal court records did not list attorneys for the others. Murin's phone isn't listed and Pollinger didn't immediately return a message.
Podlucky is charged with two counts of bank fraud, 21 counts of wire or mail fraud, five counts of money laundering and one conspiracy county. The others are charged with all but the money laundering counts.
If convicted, each defendant faces maximum prison sentences of more than 200 years and millions in fines.