LeNature's investors claim gems belonging to former CEO Podlucky should be theirs
Several investors in a failed Arizona bottling facility are claiming they are entitled to a share of a cache of precious gems and jewelry that former LeNature's Corp. CEO Gregory Podlucky claims are his personal possessions, according to federal court records.
Seven people were indicted in connection with a huge fraud case involving the former Latrobe-based corporation that bilked banks and other investors out of $856 million. Four of the seven are members of the Podlucky family.
Podlucky's wife and a son were sentenced to federal prison terms for their convictions on money-laundering charges in connection with the sale of $2.8 million worth of gems through a prestigious New York auction house.
Podlucky, a former Ligonier Township resident, claims that, under the plea deal which sent him to prison for 20 years, the government agreed to allow him to keep 160 items — including a $289,000 watch encrusted with 41 diamonds.
So far, four investors have filed claims in U.S. District Court in Pittsburgh arguing they were bilked out of more than $2 million when they invested in LeNature's state-of-the-art facility in Phoenix:
• John C. Whitmore Jr. of Florida lost $1.2 million through the fraud scheme.
• Songfisher LLC, a retirement fund in South Carolina, filed a claim seeking $1.1 million, according to court records.
• Kenneth and Ginger Chrobak of Rhinelander, Wis., said they lost $50,000 in the deal but managed to recover $30,000 of their original investment. They said they were unaware of the potential recovery until they were notified by the U.S. Attorney's Office in Pittsburgh.
“We didn't know a thing until we got the letter,” Ginger Chrobak said. “It was a complete surprise to get it. We were small investors, but I felt it was worth the price of a stamp.”
When Podlucky decided to expand his Latrobe operations out West, he settled on Phoenix as the site for his newest production facility. He built a 500,000-square-foot plant and solicited investors to help him pay for it.
The investors were part of an investment trust known as a tenancy in common. Under the terms of a tenancy in common, an unlimited number of investors can hold title to property and can deed ownership to their heirs. LeNature's was forced into bankruptcy in 2006 and defaulted on its payments in Arizona, leaving investors on the hook for the mortgage.
In 2007, the investors sold their ownership stake to CBRE Global Investors for $88.5 million. The 35 investors in the deal received a total of $20 million for their investment. In May, CBRE sold the plant for $72 million.
The Phoenix operation figured prominently in the fraud scheme that sent Podlucky, his wife, son and brother to federal prison.
Krones Inc., a German-based bottling equipment manufacturer, was accused of conspiring with Podlucky to help deceive investors by inflating the cost of bottling equipment destined for the Phoenix plant by twice its actual cost. Then Krones agreed to return “excess” payments to Podlucky.
Last year, Krones agreed to pay a $15 million penalty to the federal government, plus $110 million more to settle claims against it.
Bankruptcy trustee Marc Kirschner, who is charged with recovering as much money he can to satisfy creditors, wants the gems and jewelry items sold and the proceeds turned over to the trust to pay off creditors.
He argues that the items Podlucky claims are his were purchased with money he stole from LeNature's.
The gems that Podlucky claims belong to him were part of a large collection found during a search of the company's Latrobe headquarters by federal agents. They were hidden in a secret room Podlucky had built at the plant.
Richard Gazarik is a staff writer for Trib Total Media. He can be reached at 724-830-6292 or at email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- 3 institutionalized Westmoreland men file suit, claim lack of programs
- Latrobe City Council OKs sale of Old Athletic Field for new elementary school
- 40 years later, siblings of South Greensburg girl who disappeared still seek closure
- Re-enactor commits to pioneer lifestyle in Murrysville cabin
- Jeannette trudges through blight
- Greensburg streetlights to be updated, save city $90K
- Family of man accused of shooting St. Clair officer say allegations don’t fit his character
- Drones hover at top of holiday wish lists
- Harrold Middle School students hit new high with food drive
- School lunch group hopes to revise rules it calls impractical, too restrictive
- Contractor eyes early finish to work on New Stanton interchange of Interstate 70