Company accused of running Ponzi scheme

PITTSBURGH, Dec. 3 (UPI) -- A lawsuit has been filed in Pittsburgh claiming the chief executive officer of a now-bankrupt water-bottling company skimmed millions of dollars.

Gregory Podlucky operated LeNature's Inc. basically as a Ponzi scheme, lawyer Marc Kirschner claimed in a suit filed in federal court on behalf of investors, the Pittsburgh Tribune-Review reported Tuesday. Kirschner said Podlucky obtained fraudulent loans and then used the money for his own purposes instead of putting it into the business.

The company, based in Latrobe, Pa., declared bankruptcy in November 2006. Kirschner, in court papers, said that Podlucky and his associates looted it of at least $500 million.

In addition to Podlucky, Kirschner named as defendants his brother, Jonathan, who was also an executive, other executives and associates and Wachovia Bank. Kirschner said the bank acted as an enabler, lending Podlucky money even when its own accountants raised red flags.

Podlucky was involved in "constantly raising new money and incurring ever increasing debts to refinance investors, thereby cultivating the illusion that a legitimate profit-making business

existed," Kirschner said.

Some of the money was used to build a mansion, to buy expensive gems concealed in a hidden safe in the Latrobe plant and to add to Podlucky's collection of toy trains, the suit alleges.

Federal prosecutors are also investigating LeNature's.