The wife and son of former Le-Nature's Inc. CEO Gregory J. Podlucky were found guilty today of money laundering by a federal jury that sat through four weeks of testimony about fraud, precious stones, and free spending.
The jury found G. Jesse Podlucky, 30, guilty of one count of conspiracy to commit money laundering and four counts of money laundering. Karla S. Podlucky, 50, was found not guilty of the conspiracy count and one of the money laundering counts but guilty of the other three money laundering counts.
Gregory J. Podlucky is already serving a 20-year sentence for defrauding banks and the IRS. Five other people associated with Le-Nature's have pleaded guilty to crimes associated with the Latrobe bottling firm, which went bankrupt in 2006.
Defense Attorney Stephen Capone, who represented G. Jesse Podlucky, said the family is "disappointed."
"I was surprised," he said, "but the jury has spoken."
There was little question during the trial that the family's income came from fraud. The question for the jury was whether Mrs. Podlucky, a stay-at-home mom, and G. Jesse Podlucky, a lower-level employee of Le-Nature's from 2004 on, knew they were spending company money and, later, selling ill-gotten assets.
Among other things, they were accused of having roles in the sales in 2009 and 2010 of three diamonds and seven Kashmir sapphires through the Sotheby's auction house for $2.9 million.
Assistant U.S. Attorney James Garrett said one key was the family tax returns, which showed income that could not support the family's massive jewelry collection.
"Where does all of this money come from if you're not reporting it?" Mr. Garrett asked after the verdict came in.
He said the suspicious ways the defendants handled various transactions -- moving money through multiple accounts, buying a car out of state, using different post offices and addresses -- seemed to give the jury enough circumstantial evidence to conclude that the family members knew the money came from fraud.
He spent much of the trial outlining the Le-Nature's fraud, in which the company used fake books to raise hundreds of millions of dollars from lenders. Gregory J. Podlucky then siphoned off tens of millions for his family's use.
"What it boils down to is the magnitude," Mr. Garrett said. "That's why we wanted to get into the historical detail" of the fraud at trial.
The Podluckys will be sentenced April 26 by U.S. District Judge Alan N. Bloch. They are free on bond until then.
Rich Lord: firstname.lastname@example.org or 412-263-1542.