German company that helped in Le-Nature's fraud to pay $110 million in restitution

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A German company that helped defunct Latrobe bottler Le-Nature's Inc. trick investors will pay the U.S. Treasury Department $15 million and make restitution payments totaling $110 million, U.S. Attorney David Hickton's office announced today.

Krones Aktiengesellschaft, which dealt with Le-Nature's through a Wisconsin-based subsidiary, won't face prosecution under the arrangement.

The firm provided bottling equipment to Le-Nature's and provided the bottler with documentation indicating that the machinery cost roughly twice the actual price.

That satisfied the bottler's lenders, and Krones then steered about $118 million back to Le-Nature's.

Mr. Hickton, in a press release, noted that Krones cooperated with the successful prosecution of former Le-Nature's executives and characterized the $15 million penalty as the largest ever imposed in the Western District of Pennsylvania.

"We entered into this agreement with Krones because we are satisfied the penalty is of a magnitude adequate to deter Krones from becoming an instrument of a criminal scheme in the future, as well as to deter others from transacting business by deceitful means," Mr. Hickton said in the press release.

Former Le-Nature's chief executive Gregory J. Podlucky is serving 20 years in prison for fraud associated with the rise and 2006 collapse of the company.

Another five people associated with the fraud, plus Mr. Podlucky's wife and son, are also serving prison terms.

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Rich Lord: rlord@post-gazette.com, 412-263-1542 and on Twitter @richelord.


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