The federal trial of David Brooks, who won the Little Brown Jug with Timesareachanging and has campaigned numerous other stakes winners, got underway in U.S. District Court in Central Islip, NY, on Monday. Part of the opening day session included federal prosecutors showing the belt buckle worn by Brooks in the Jug winner’s circle. The design of the belt buckle shows the American flag, with rubies, diamonds and sapphires creating the red, white and blue.
Brooks, who has raced and bred horses under the stable name of Perfect World Enterprises, is charged with insider trading, fraud and tax evasion in an alleged $185 million scheme. He was in court in street clothes, although he is presently being held in prison. Brooks’s attorneys made a motion that he be allowed out of bail, but it was denied again late Monday.
Brooks had been free on a $400 million bail until Jan. 16, when authorities were notified that investigators in London, England, had by chance observed Brooks's brother, Jeffrey, leaving a bank with a duffel bag and found other evidence that convinced them that Brooks was hiding assets overseas.
Brooks had been allowed to live in his condo in Manhattan as he awaited trial, but a condition was that he and his family, including his brother Jeffrey, would account for their assets and keep them in monitered accounts in the U.S. One of the alleged schemes was uncovered by police in London who were conducting a separate money-laundering investigation. An undercover video showed Jeffrey Brooks removing duffel bags from a safe-deposit box at a London bank. The next day, a person allegedly working for the Brooks brothers rented another safe-deposit box, and when police opened the box it contained more than $3.6 million in pounds, euros and U.S. currency in envelopes marked "Jeffrey Brooks Securities."
The 72-page federal indictment against Brooks includes numerous mentions of his harness racing operation, citing bonuses paid to trainers and expenses for trucks and trailers.
Brooks is the founder and former CEO of DHB Industries, which sold body armor to the US government. He and former DHB chief operating officer Sandra Hatfield are charged with falsely inflating the value of inventory and running extravagances—including the cost of Brooks’s horse operation--through the publicly-traded company. Authorities allege that by inflating the value of DHB's inventory, the company’s stock rose from $2 a share in early 2003 to nearly $20 a share in late 2004. Brooks and Hatfield later sold stock and made more than $190 million ($185 million for Brooks), the indictment states.