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Arson Scheme-Long Island, NY

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  • Arson Scheme-Long Island, NY

    NEW YORK (AP) - Eight men were charged Tuesday with driving a
    Long Island pharmaceutical company into bankruptcy by lying to
    investors, torching a Brooklyn warehouse and bribing a fire marshal
    to cover their tracks.
    Federal complaints filed in Brooklyn alleged that four of the
    defendants offered the fire marshal $100,000 to rule that an arson
    last year at a warehouse used by Allou Healthcare Inc. was an
    accident. They allegedly hoped to use the report to collect on a
    $100 million insurance policy.
    The fire marshal was working undercover with federal
    investigators, who secretly recorded the negotiations. The men had
    paid $50,000 before their arrests.
    The defendants, including five of Allou Healthcare's top
    officers, were awaiting arraignment in federal court in Brooklyn on
    securities fraud, bribery and other charges.
    The publicly traded company, which distributed health and beauty
    products, filed for bankruptcy in April.
    The men "are charged with schemes whose venality, corruption
    and willful disregard for public safety staggers the imagination,"
    U.S. Attorney Roslynn Mauskopf said in a statement.
    Prosecutors allege that the defendants cheated investors by
    fabricating hundreds of millions in sales and inventory to meet
    quarterly earning projections and maintain its line of credit. They
    allegedly pocketed $15 million in the scheme's final year alone.
    In April, Allou acknowledged that it overstated assets used as
    loan collateral and fired four senior executives. Four of the
    company's operating subsidiaries agreed to file for bankruptcy
    after a group of lenders was preparing to force the issue. Allou
    defaulted on loans totaling more than $65 million, which were
    secured by inventory lost in the fire.

    (Copyright 2003 by The Associated Press. All Rights Reserved.)
    Proudly serving as the IACOJ Minister of Information & Propoganda!
    Be Safe! Lookouts-Awareness-Communications-Escape Routes-Safety Zones

    *Gathering Crust Since 1968*
    On the web at www.section2wildfire.com

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