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Ex-western Pa. soft drink CEO sentenced to 20 years for fraud; complicated restitution delayed
PITTSBURGH (AP) ' The former CEO of bankrupt soft drink maker Le-Nature's Inc. was sentenced Thursday to 20 years in prison, the longest jail sentence ever imposed for a financial fraud in the 25-county western Pennsylvania federal court district for the largest fraud ever prosecuted in the jurisdiction.
Senior U.S. District Judge Alan Bloch handed the down the sentence after determining that 51-year-old Gregory Podlucky, of Ligonier, defrauded investors, vendors and, mostly, lenders out of $684 million.
The case is so complicated the judge said he'd have to rule later on how much restitution he'll order, though all parties acknowledge the order will be issued more as a matter of principle ' and because the law requires restitution in such a case ' with Podlucky expected to repay only a minute fraction of the losses.
In asking for the sentence, Assistant U.S. Attorney James Garrett called the fraud "a financial mirage the likes of which I had never even dreamt could have been created."
Podlucky expressed contrition, crying as he told the judge, "I am nothing but a filthy rag, the things that I did are abominable."
Garrett argued the remorse was much too little ' given the scope of the losses and that Le-Nature's went belly-up as a result in 2006 ' and too late ' in that Podlucky was caught laundering money by selling some rare jewels he bought with the stolen money at a Sotheby's auction only last year.
"This defendant is a man who will stop at nothing, a man who answers only to his own ego," Garrett said.
The prosecutor recalled the testimony of underlings about the foul-mouthed, dictatorial style Podlucky used to get top executives to help him cook the company's books down to the mistreatment of a "go-fer" who was not only told to shine Podlucky's shoes, but also ordered to take them off, put them back on "and then tie them, and be sure to pull the socks up."
Karla Podlucky, 49, and one of their sons, G. Jesse Podlucky, 30, are scheduled for trial later this month on charges they helped Podlucky launder some of the proceeds in the Sotheby's auctions and by other means. Podlucky's defense attorney, Alexander Lindsay Jr., said the family had no comment.