Defunct Soda CEO Pleads Not Guilty In $806 Million Fraud
PITTSBURGH (AP) — The former chief executive of a defunct western Pennsylvania soft-drink maker is scheduled to change his not guilty plea to charges that he perpetrated an $806 million bank fraud then allegedly sold or tried to sell millions of dollars' worth of gold, jewels and other valuables he's accused of buying with money stolen from the company.
Alexander Lindsay, defense attorney for 50-year-old Gregory Podlucky, of Ligonier, did not immediately return a call for comment on the change of plea hearings scheduled Monday afternoon before a federal judge in Pittsburgh. Because Podlucky has already pleaded not guilty to the charges, the hearings signal that he will plead guilty or no contest to at least some of the charges he faces.
Podlucky's brother, Jonathan, 37, and Donald K. Pollinger, the owner of a Charlotte, N.C.-based equipment company, pleaded guilty last week to charges related to the scheme, and former company director Andrew Murin Jr., 53, of McMurray, is scheduled to change his not guilty plea on Tuesday.
Jonathan Podlucky and Pollinger agreed to serve five-year prison sentences as part of a plea deal with prosecutors, but refused then to say whether they had agreed to testify against Gregory Podlucky who had been scheduled to stand trial starting July 5.
Podlucky and other Le-Nature's officials are charged with overstating sales and falsely reporting inflated revenues and expenses in order to obtain bank loans, equipment leases and other financing. The U.S. Attorney's office in Pittsburgh contends Le-Nature's reported net sales 40 times larger than the actual figure of $3.8 million in 2003.
Latrobe-based Le-Nature's made bottled waters, teas, juices and nutritional drinks before it was forced into bankruptcy in October 2006 after a judge found company officials may have engaged in financial fraud. Investigators later seized jewelry and an 8,000-piece model train collection worth about $1 million from Gregory Podlucky. Authorities believe Gregory Podlucky spent much of the money on himself or his family, purchasing cars and building a mansion in Ligonier, 45 miles southeast of Pittsburgh.
Earlier this year, Podlucky, his wife, Karla, 49, and their son G. Jesse Podlucky, 30, were indicted on money laundering charges for allegedly selling or trying to sell millions of dollars' worth of gold, jewels and other valuables allegedly bought with money stolen from the company.
Gregory Podlucky remained free on bond when he was arraigned in February, but only after he agreed to turn over a $289,000 Jaeger-LeCoultre watch he allegedly tried to sell at Sotheby's in New York earlier this year. Podlucky agreed to surrender the watch once a judge threatened to jail him overnight. The newest indictment charged the Podluckys with buying gold, sapphires and even patio furniture with the proceeds allegedly stolen from Le-Nature's Inc., and then trying to sell some of those items through Sotheby's and other means.
Assistant U.S. Attorney James Garrett of Pittsburgh contends most of the financing Gregory Podlucky obtained by overstating the company's financial performance was never spent on Le-Nature's, which Gregory Podlucky founded and which owed creditors more than $700 million when it was forced into bankruptcy.
Federal agents who searched the company's headquarters at that time reported finding a secret room containing millions of dollars' worth of valuables, including gold, silver and platinum jewelry and diamond-rich watches.
Investigators believed there were other valuables they couldn't find during that search, and claim in the February indictment that they included three diamonds worth $539,000 the Podluckys allegedly sold through Sotheby's in October 2009 and seven sapphires worth $2.27 million also sold through the auction house in April 2010.
The Podluckys are charged with money laundering and they're also accused of buying more than $11,000 worth of patio furniture with ill-gotten cash in June.
Podlucky's wife and son have pleaded not guilty to the money laundering charges and it was not immediately clear whether prosecutors intend to pursue them. Attorneys for G. Jesse and Karla Podlucky did not immediately return calls for comment Monday.