Witness In Pa. Soft Drink Fraud Case Gets 5 Years

Published January 3, 2012 7:00PM (EST)

PITTSBURGH (AP) — An accounting director-turned-government witness has been sentenced to five years in federal prison and five years on federal probation for creating fake financial records that fooled auditors of defunct Pennsylvania soft drink maker Le-Nature's.

Tammy Jo Andreycak, 44, asked for probation or house arrest because she has been cooperating with investigators since even before she pleaded guilty in April 2008 to wire fraud, bank fraud, conspiracy and filing a false tax return as part of fudging accounting records at the behest of former chief executive and company founder Gregory Podlucky.

Podlucky pleaded guilty and is serving 20 years in prison for the scheme, which cost lenders and vendors about $684 million. Prosecutors contend Podlucky obtained $800 million in financing by fraudulently overstating the company's revenues but spent much of the money on a lavish lifestyle while the company foundered, with sales a fraction of what he ordered Andreycak to report.

She had faced between 12 and nearly 16 years in prison.

In a sentencing memorandum, Andreycak's attorney described her as a single mother with a high school education and a secretarial certificate from a business school, with no accounting background, and as someone whom Podlucky called his "secretary" despite listing her as the company's director of accounting.

Among other things, Andreycak acknowledged inflating the company's 2005 gross sales to $287 million — about $247 million of which were based on phony invoices and bank deposits, to defraud lenders. Andreycak reportedly used a computer program developed by Podlucky to keep two sets of books and "honestly believed the company would expand to profitability," according to the memorandum filed by her attorney, Edward Bilik.

When Andreycak learned otherwise as the company was forced into bankruptcy in 2006, she told a bankruptcy trustee everything she knew about the fraud. She continued to provide similar information to federal prosecutors, which is why Bilik has asked the court to consider probation or some form of home confinement, instead of federal prison.

Also to be sentenced later Tuesday is Robert Lynn, former president of Le-Nature's. Lynn, of Ligonier, was convicted of 10 counts of bank fraud, wire fraud and conspiracy in July despite claiming that he also was fooled by Podlucky and wasn't part of the scheme.

By Salon Staff

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