Arson, Fraud and Bribery Charges Face Owners of Major Beauty Aids Distributor
By Marcus Solis
(Brooklyn-WABC, August 12, 2003) — Charges of bribery and fraud are facing former executives of a Long Island firm.
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Investigators say they set their business on fire then tried to bribe the fire marshal, hoping to collect the insurance.
Eight men are accused of the crimes that came to light following a huge warehouse fire in Brooklyn last year.
Marcus Solis reports from downtown Brooklyn with the story.
There's not much left of Allou Healthcare, a company that's literally and figuratively gone up in smoke.
Last September the company's Brooklyn warehouse on Evergreen Avenue was destroyed, gutted in a three alarm fire that burned for 15 hours.
The fire was ruled arson and today federal prosecutors say top officials at the company then offered a $100,000 bribe.
Roslynn Mauskopf, US Attorney, Eastern District: "To a person that they believed was a corrupt New York City fire marshal. Who they wanted to issue a new report declaring the fire an accident."
Prosecutors say the fire was not only designed to cash in on a $100-million insurance policy, but also to cover up evidence the company was cooking the books.
Officials have charged Victor Jacobs and his sons Herman, Jack and Ari with skimming $200-million over 10 years. But the family's lawyer says years of audits would have uncovered any wrongdoing.
Jeffrey Hoffman, Defense Attorney: "There's nothing that has come out that those audits would not have seen. And the results of what they saw went on for 10, 12 years, and nobody complained."
At one time the Brentwood based company was one of the largest publically held businesses on Long Island. But Allou Healthcare is now in bankcruptcy, its shares are worthless.
Prosecutors say it's all the result of corporate greed.
Roslynn Mauskopf: "Phony accounting manipulation, looting their public company, impoverishing investors, obstructing regulators and bribing public officials."
The eight people being arraigned are being held pending a bail hearing on Thursday. The four people charged with bribery face up to five years in prison. Those charged with fraud could face up to 30 years if convicted.
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