Bloomberg News

Le-Nature’s Ex-Chief Executive Officer Pleads Guilty to Fraud

June 22, 2011

June 22 (Bloomberg) -- Former Le-Nature’s Inc. Chief Executive Officer Gregory J. Podlucky pleaded guilty to fraud, tax evasion and money-laundering charges related to the 2006 collapse of the bottled-water company.

Podlucky may be sentenced to a maximum of 20 years in prison when he appears in U.S. District Court in Pittsburgh in October, under a plea agreement he negotiated with federal prosecutors, Assistant U.S. Attorney James Y. Garrett said today in an interview.

Federal prosecutors accused Podlucky of masterminding a $800 million scheme that created fake invoices and transferred funds among various accounts to create the appearance of sales revenue. The fraud was uncovered after a court-appointed custodian arrived at the company’s headquarters in Latrobe, Pennsylvania, in October 2006, Garrett said.

“They found very little cash in the bank,” Garrett said, describing what he told the judge when Podlucky pleaded guilty on June 20.

Podlucky’s brother Jonathan and at least three other Le- Nature’s employees also have pleaded guilty to charges related to the fraud, which cost lenders and other investors about $800 million, according to court records.

Some of the money was used to buy gems, watches and toy trains, which investigators found in a secret room at the company’s Latrobe bottling plant, according to court records.

Le-Nature’s filed for bankruptcy in 2006 and was liquidated.

The case is U.S. v. Podlucky, 2:09-cr-00279, U.S. District Court, Western District of Pennsylvania (Pittsburgh).

--Editors: Stephen Farr, Fred Strasser.

To contact the reporter on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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