Le Nature’s Disaster

by Johnny Debacle

Greg Podlucky former CEO of Le Nature'sYou want to know how to commit corporate fraud? Gregory Podlucky, founder of Le Nature’s / evangelist / genius, shows how to get it done. A little background, Le Nature’s is a bottled water company, based in Pennsylania that was about to be sold for $1.2bn until all this came out. This story is not getting any coverage despite being a huge fraud and an even huger source of absurdity.

WTAE Channel 4′s news exchange partners at the Tribune Review reported Podlucky was escorted out of the building last week, and the locks were changed.

Mr. Podlucky was evicted Oct. 27 after the company’s minority shareholders presented evidence of widespread accounting fraud and document destruction implicating Mr. Podlucky.

Le-Nature’s “reported revenue of $275 million to the outside world when it had [revenue of] $32 million,” Mr. Basta said.

the custodian found the situation at the company “far worse than imagined” when it took control. He cited “widespread document destruction” at a company that kept two sets of books and has less than $1 million in cash on hand. Le-Nature’s has nearly $750 million in bank and bond debt, lease obligations and other liabilities.

two safes were found at the company that contained watches, jewelry and a considerable amount of cash

“We’re in a bit of a corporate governance mess,” Mr. Basta [incoming custodian CEO] said.

LeNature’s was sued earlier this year by two investment groups, George K. Baum Capital Partners and S.W. Pelham Fund, which had invested $13 million in the company as part of LeNature’s expansion plans, which included construction of a plant in Arizona and plans for a third in Florida.

LeNature’s also is accused of “fraudulently inducing” a lending company to loan it $25 million for the purchase of equipment for its proposed Florida plant, according to Strine. The money, according to the judge’s order, was placed with an equipment manufacturer.

Then using forged documents, LeNature’s got the equipment company to transfer more than $20 million of the loan to LeNature accounts, Strine said.

Strine also found evidence that LeNature “intentionally doctored” minutes of a board meeting.

In its lawsuit, Baum and Pelham demanded an accounting of whether any corporate funds were used in the purchase of land for Podlucky’s proposed Grace Community Church of the Valley in Ligonier.

The land was purchased through Missy’s Place Foundation, named after Podlucky’s late daughter, Melissa. Tax records indicate that the company contributed $440,000 to the foundation.

and my favorite part

The firm, founded in 1989, was up for sale last November, but Podlucky rejected a $1.2 billion offer and refused to allow potential buyers to inspect the company’s records before making an offer.

You know how I know you are gay committing widespread corporate fraud? You don’t let me see your books when I am a bidding on your assets. Also, having your VP and your legal counsel threaten random bloggers who write negatively about your product is never a good sign either. It sounds like there is a lot more bizarre stuff going on with this case than what has been released in the wire reports, so if you know anything else of amusement value please post it in the comments or email it to johnnydebacle@gmail.com.

Snippets compiled from ThePittsburghChannel.com, PittsburghLive.com, Post-Gazette.com and the WSJ. Also the WSJ has a Le Nature’s entry on its Law blog.

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