The brother of the alleged mastermind of an $800 million fraud scheme pleaded guilty Thursday to taking part in the scam to bilk investors in now-defunct soft-drink company Le-Nature's Inc.
Jonathan E. Podlucky pleaded guilty before a federal judge along with Donald K. Pollinger, the owner of a Charlotte, N.C.-based equipment company that authorities said shifted money to Le-Nature's so it could be claimed as revenue.
Podlucky, 37, is the brother of indicted Le-Nature's CEO Gregory Podlucky, who is scheduled to go on trial in July along with two others.
Jonathan Podlucky and Pollinger agreed to serve five-year prison sentences as part of a plea deal with prosecutors. Attorneys for both men declined comment after the hearing and did not answer questions about the possibility of their clients testifying against Gregory Podlucky.
The company allegedly overstated sales and falsely reported revenues and expenses in order to attract money from banks and other investors. Prosecutors said Le-Nature's reported net sales 40 times larger than the actual figure of $3.8 million in 2003.
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.
The company was forced into bankruptcy in October 2006 after a judge found company officials may have engaged in financial fraud. Investigators later seized tens of thousands of dollars in jewelry and an 8,000-piece model train collection worth about $1 million from Gregory Podlucky.
Latrobe-based Le-Nature's made bottled waters, teas, juices and nutritional drinks.