Sunday, October 9, 2011

More trouble for Glock

There have been allegations that Glock Pistols used dodgy business practices to raise its market position. A major investigation of the company two years ago reported that Glock was then the subject of an otherwise secret IRS investigation to determine if Glock had concealed profits from tax officials.

The magazine quoted the former head of the U.S. subsidiary, Paul F. Jannuzzo, as saying that Glock had “organized an elaborate scheme to both skim money from gross sales and to launder those funds through various foreign entities.” The magazine also quoted Jannuzzo, who was eventually charged by Georgia state prosecutors on racketeering charges, as alleging that “the skim is approximately $20 per firearm,” suggesting that millions of dollars has been hidden from the IRS over the years. The company insisted at the time it had been “victimized” by Jannuzzo and others and denied any wrongdoing.

Now, it has come out that Jannuzzo, a former New Jersey prosecutor who served as Austria-based Glock's general counsel and top executive in the U.S. from 1991 to 2003, has been extradited earlier this year from Amsterdam, where he fled in 2009 shortly before he was scheduled to go to trial on the charges. He will be going to trial Oct. 24 in Cobb County Superior Court on theft and racketeering charges related to allegations that he misappropriated millions of dollars from the international firearms maker.

Jannuzzo's indictment stems from Manown's decision in October 2003 to confess to Gaston Glock that he and Jannuzzo had, for years, skimmed funds from Glock companies in the U.S. and abroad. In October 2009, as Jannuzzo's scheduled trial on theft and racketeering charges was approaching, he jumped bail and fled to Mexico, according to court records. His failure to appear in Cobb County Superior Court on Oct. 23, 2009 led to state and federal warrants for his arrest on charges of flight to avoid prosecution. The FBI and U.S. marshals tracked Jannuzzo to Amsterdam in December 2009. He was extradited to the U.S. last May and is awaiting trial in the Cobb County Jail.

The indictment specifies the theft of more than $300,000 in corporate funds and accuses Jannuzzo of using company assets without authorization and forging Gaston Glock's signature to make a $1 million loan to a real estate development company with which Peter Manown was affiliated. It also accuses Jannuzzo of guaranteeing, without authorization, a second loan for $3.4 million and fabricating the accompanying loan documents. In an affidavit in Cobb County court filings, Gaston Glock accused Jannuzzo of stealing "millions."

The charges against Jannuzzo also include the theft of a .45-caliber LaFrance Special semi-automatic custom pistol that the company said it placed in Jannuzzo's "temporary custody" during his tenure at Glock. The firearm, valued at $2,200, according to court records, was recovered by Smyrna police on Aug. 27, 2007 when Jannuzzo was arrested during an alleged incident of domestic violence at his home, according to Smyrna police. The domestic violence charges were dismissed, police said.

The indictment tracks Manown's confession to Glock's outside counsel in New York, John Renzulli, and, a few days later, to Gaston Glock and his attorney, Johann Quendler, in Austria during the fall of 2003. At that time, Manown described to Glock's founder and counsel how he and Jannuzzo had misappropriated and stolen company funds, according to a 283-page transcript of a proffer that Manown made to Cobb County prosecutors on Oct. 17, 2007.

Manown made the proffer as part of a binding plea deal, said his attorney, Bruce H. Morris of Morris & Finestone in Atlanta. Morris said that Manown confessed to Gaston Glock and the company's attorneys in 2003, and that he repaid as much as he could of the funds he had stolen. Manown said in his proffer that he can't remember how much money he siphoned from Glock's corporate accounts, but he recounted multiple instances in which he or Jannuzzo misappropriated monies —a total of more than $5 million.

Asked by Glock attorney Renzulli why they took the money, Manown replied, "I'll tell you why. … I'll say it as concisely as I can. Glock is not Snow White. He's got a lot of skeletons. He's done, in my mind, a lot of things that are much worse than what Jannuzzo and I did. He makes roughly $200,000 a day, him personally. …He's just a bad guy, and with all this money laying around, he needed it like a hole in the head, and we just, you know, we let greed and our ethical standards slip … It wasn't like we were stealing from Mother Theresa. We were stealing, in my mind and in Jannuzzo's … from a bad guy."

And, he added, '"It was so easy. There was so much money flying around in this company, in this industry. It was like Monopoly money."

If convicted on all counts, Jannuzzo could face up to 20 years in prison.

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1 comment:

  1. Just remember, it's not gunz that stealz moneyz, it's people that makez gunz that stealz moneyz.

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