PITTSBURGH (July 29, 12:30 p.m. ET) — The massive legal case from the former Le-Nature's Inc. bottled water and iced tea bottling plant in Latrobe, Pa., continues to make news, as a former director, Robert Lynn, was found guilty in federal court of 10 counts bank fraud, wire fraud and conspiracy.
Le-Nature's, which had new blow molding machines and PET preform injection presses, collapsed into bankruptcy in 2006. An investigation found that, although Le-Nature's reported audited sales of $275 million in 2005, the actual sales were as low as $32 million.
Gregory Podlucky, the founder and CEO, has pleaded guilty and is scheduled to be sentenced Oct. 20. Under a plea agreement, Podlucky faces up to 20 years in prison, according to a spokeswoman for U.S. District Attorney David Hickton.
“The Le-Nature's fraud was the largest financial fraud in the history of the Western District of Pennsylvania,” Hickton said.
A U.S. District Court jury in Pittsburgh deliberated 16 hours before returning the guilty verdict against Lynn on July 28. Lynn, 67, of Ligonier, Pa., faces a total prison sentence of 220 years, a fine of $2.5 million, or both, according to Hickton's office.
Judge Alan Bloch is scheduled to sentence Lynn on Dec. 1. Lynn ran Le-Nature's sales.
Hickton's office detailed the fraud in a news release announcing the guilty verdict: “While the company was losing millions on its products during the years 2001 to 2006, Lynn and other company executives provided false information about its business activity and financial condition to investors and lenders, making it seem the company was profitable and expanding. As a result of the false information, lenders and investors advanced funding to LeNature's of more than $800 million during the scheme. When the company collapsed, the losses were approximately $600 million.”