Three years after the collapse of Latrobe bottling company Le-Nature's Inc., the former founder and CEO, along with four others, has been named in a 29-count indictment alleging the biggest fraud scheme ever in the Western District of Pennsylvania.

Gregory Podlucky is accused of scamming banks and investors out of $806 million between 2000 and 2006.

The federal indictment, handed up on Sept. 17, was unsealed yesterday and lists counts of bank, wire and mail fraud, as well as conspiracy.

It names as defendants Mr. Podlucky, 48, of Ligonier; board member Andrew J. Murin Jr., 53, of McMurray; corporate officer Robert B. Lynn, 65, of Ligonier; corporate officer Jonathan E. Podlucky, 35, of Greensburg; and Donald K. Pollinger, 64, of Charlotte, N.C., who was a broker for manufacturing equipment.

Allegations of fraud involving the company have been rampant since it went into bankruptcy in 2006.

A year later, the U.S. attorney's office filed a forfeiture action seeking to seize $20 million in jewelry that had been taken from safes in a secret room at the Le-Nature's headquarters.

Two of the counts against Mr. Podlucky list him as sending more than $6 million to a Montana company called Fine Gems International in April and July 2006.

According to the indictment. Mr. Podlucky founded Le-Nature's as Genesis Inc. in 1992. The company changed names again in 1995 before it was named Le-Nature's in May 2002. It operated a plant in Latrobe and opened another in Phoenix in September 2005, presenting itself as an innovator in the bottling industry.

However, evidence of problems within the company came to light in 2003, when the chief financial officer and two other senior financial managers resigned abruptly.

U.S. Attorney Mary Beth Buchanan said the Le-Nature's investigation began even before the bankruptcy filing.

"This fraud was difficult to unravel because it involved multiple layers of loan agreements based on fraudulent information," she said. "Each loan created the appearance of a healthier ongoing business."

The fraud has been characterized as an elaborate Ponzi scheme, in which the company would use newly invested money to pay off its earlier debt obligations.

About $100 million of the $806 million obtained by Le-Nature's was repaid, Ms. Buchanan said.

According to the indictment, Le-Nature's officials falsified financial information, including the company's business activity and assets. They created false documents, such as invoices, customer checks and account statements to verify business activity that never occurred or existed.

Based on those documents, Le-Nature's portrayed itself to banks, investors and ratings agencies as a successful, growing business that needed additional money to expand its production capacity, the indictment said.

However, the company was really in dire financial straits.

According to one related lawsuit, the company reported sales in 2002 of $135 million, when actual net sales for that year were less than $2 million.

Ms. Buchanan said she could not comment on the culpability of the financial institutions that made the loans to Le-Nature's or their conduct in choosing to do so.

She said the investigation is continuing and it would be difficult for any financial institution to ignore an alleged fraud of this magnitude.

Another part of the continuing case, Ms. Buchanan said, will look at the misrepresentation of collateral presented by Le-Nature's to obtain the loans in question.

"I would not expect this to be the last word on the Le-Nature's case," she said.

In April, the company's accounting director, Tammy Andreycak, pleaded guilty to four fraud counts and agreed to testify in the government's ongoing investigation. She admitted inflating sales records at Mr. Podlucky's direction.

At the time, Assistant U.S. Attorney James Y. Garrett, who is prosecuting the case, said the company's financial records were really "a house of cards."

Penn State University professor Edward Ketz, who teaches financial accounting, characterized the alleged Le-Nature's scheme as an old story.

"It's been done by lots of firms with a number of variations on this theme," he said. "It's almost incredible investors continue to let themselves fall for this type of thing."

In the Le-Nature's case, individual investors were not targeted, but financial institutions. For example, Wachovia Bank N.A. was taken for $285 million through a credit extension, the indictment said.

Losses like that, Mr. Ketz said, will roll down through the system and create additional costs in doing everyday business.

"It creates a negative impact on the institution -- possibly on its stock value or on its ability to operate," Ms. Buchanan said. "It does have an effect on individuals."

In addition to the fraud counts, Mr. Podlucky is charged with money laundering and a separate indictment for income tax evasion.

His attorney, Al Lindsay, could not be reached for comment.

All of the defendants except Mr. Pollinger were arrested yesterday. Mr. Podlucky was released on $100,000 unsecured bond and the others on $50,000 unsecured bond. No hearings have been set yet.

Mr. Pollinger, who is from North Carolina, is expected to report here for arraignment at a later date.

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