Gun giant faces damaging civil lawsuit that includes charges of federal and Georgia R.I.C.O. violations, theft, fraud and money laundering.
“At its bottom it’s a business dispute,” said John Da Grosa Smith, attorney for plaintiff Helga Glock in the action Glock v. Glock et al. filed on Oct. 9 in U.S. District Court, Atlanta Division. “Helga filed this case against Gaston Sr. and his associates, when she learned he committed virtually world-wide stealing of hundreds of millions of dollars from her.”
This litigation is destined to answer many of the rumors and speculations surrounding the comings and goings of many senior personnel from Glock over the past decade. It may very well shed light on questions of motive and bizarre corporate re-directions ever since the assassination attempt on Gaston Glock in Luxemburg by Panama “the Duke” Charly, who has been serving prison time there since his 2003 conviction. Charly is reportedly willing to talk on the record regarding what he knew and when he knew it.
An insider with intimate knowledge of the divorce’s twists and turns said: “This story has nothing to do with the quality and reliability of the gun that took America by storm, but rather with the quality and integrity of the company that has promoted it. This is the complaint. We eagerly await the answer and even more interestingly look forward to learning the truth, the good, the bad, and the ugly.”
In the words of another insider there is still more to come: “An interesting side story for G&P readers to watch will be how Glocks’ competitors utilize these allegations for their own marketing ends. Stay tuned – this one going to get very interesting.”
Glock is the leading global manufacturer of pistols engineered to meet the specifications of military and law enforcement agencies worldwide. The Glock pistol, sometimes referred to as a Glock “Safe Action” Pistol, is supplied to 65-percent of law enforcement agencies in the U.S.
Designed and produced by Glock Ges.m.b.H. located in Deutsch-Wagram, Austria, Glock is popular among American consumers who use the pistol for recreation, competition shooting and self-defense.
The Austrian gun store that started as a “Mom & Pop” machine-shop in 1963 was co-founded, built and co-owned by Helga Glock and Gaston Glock Sr., said Smith. According to the complaint, today the commercial empire, which has locations in the U.S., Hong Kong, Uruguay, and the United Arab Emirates, has an estimated net worth of at least 1.4 billion.
The 354-page complaint seeks punitive damages in the approximate amount of $500 million. It alleges that Glock Sr. committed a multiple-decade, world-wide, and continuing racketeering scheme for the purpose of taking money from Ms. Glock.
Defendants failed to abide by corporate formalities, diverted fraudulent royalties, initiated sham licensing schemes, improper transfers and payments, sham leases for office and firing range space, and committed mail fraud and wire fraud, said the complaint.
“In metro Atlanta, an association formed and operated several Georgia corporations for the sole purpose of owning residential properties purchased with stolen funds, so that Glock Sr. could more conveniently house women away from his wife’s notice.”
Glock Sr. improperly funneled resources from its “cash cow,” Georgia-based Glock, Inc., though the Glock Group, transferring stolen assets into foundations in Austria in order to take control of all the families’ fortune, said Smith.
“He secretly handed millions of dollars into members of the so-called Glock Group, which is wholly controlled by Glock Sr.”
Ms. Glock trusted and relied on Glock Sr., her business partner and husband for nearly 50-years, said the complaint.
“While Glock Sr. had been promising that all of his efforts were directed at building up the company, and preserving it for the family’s future, he and his associates had been systematically stealing from and laundering the proceeds through separately-owned business entities,” said the plaintiff. “This culminated in an effort to use Austrian private foundations to place his assets, including proceeds from the racketeering scheme, beyond the reach of Ms. Glock in their divorce proceedings.”
The complaint alleges that Ms. Glock was deceived into transferring her interest in Glock Ges.m.b.H into foundations that were established for the family but ultimately wholly controlled by Glock Sr.
In 1999, the Glock Foundation was formed purportedly for the benefit of Glock Sr., Ms. Glock, and their family members, however the plaintiff alleges Glock Sr. would keep control for himself only. “With the ability to enforce
the rights of the founders, appoint members to and direct the conduct of the managing board, and change the terms of the deed that created the foundation.”
It was shortly after their divorce in 2011, that Glock Sr. remarried a woman 50 years his junior, and unilaterally changed the deed for the Glock Foundation so as to remove Ms. Glock and their 3 adult children, Brigitte, Gaston Jr. and Robert, as beneficiaries of the foundations, said the complaint. “He also banned them and their descendants from any further association with the company.”
Plaintiff alleges that the foundations that hold proceeds of defendants’ racketeering scheme, now fund a multi-million dollar horse farm with lavish events, state of the art equestrian facility and the Glock Performance Center. The Austrian Times reported that Glock Sr. recently spent $15 million on a new horse for his wife, Katherine, one of the highest prices ever paid for a horse.
The defendants’ elaborate and unlawful scheme was specifically designed to deny Ms. Glock of assets she was entitled to, said the complaint. Plaintiff asks the court to punish the defendants, vindicate the law and provide some measure of personal justice to Helga Glock.