Mad Moguls

Glock Lawsuit: Gun Biz Run Like the Mob

Gunmaker Gaston Glock allegedly hired a team to root out embezzlement—then turned on them when they found his own dirty dealings.

03.24.15 9:25 AM ET

You don’t build an empire without making a few enemies. No one knows this better than eponym and current head of America’s favorite gunmaker, Gaston Glock.

The gun magnate’s newest headache comes in the form of a federal lawsuit filed last week in Cobb County, Georgia, by Jeffrey Pombert, an attorney who claims that Glock and his associates turned on him when a Glock-ordered internal investigation into an alleged criminal enterprise within the company showed that the dirty business had actually been orchestrated straight from the top.

In his lawsuit, Pombert says he was on a team of private investigators hired to look into corruption within the company after one of Glock’s most trusted business partners allegedly tried to have the Austrian gunmaker murdered, to cover up his own embezzlement scheme. But the internal investigation uncovered not only wrongdoing by the would-be assassin but also evidence implicating Glock in illegal activity within his own company, the suit alleges. In response, to further their own racketeering activities, the suit claims Glock and his associates organized the malicious prosecution of the investigative team to “silence, punish, and discredit” them. The suit further alleges the defendants tampered with and falsified evidence, and improperly influenced witnesses—all while colluding with the local police and district attorney.

Pombert’s case is the first to come from five men who have filed notices of intent to sue the city of Smyrna, Georgia, if they are not compensated for what they claim was their unwarranted criminal investigation by police, allegedly undertaken on Glock’s request. The city’s attorney, Harvey Gray, responded to allegations that the city and police department had been unjustified in the arrests and prosecutions of the Glock-organized team, telling The Daily Report in 2013 they “did not act as a pawn in doing whatever Glock wanted to do. The matter was presented to the district attorney who had independent prosecutorial discretion … to decide whether to pursue the case.”

Pombert’s is the latest, but certainly not the only, lawsuit to detail a racketeering scheme from within Glock Inc. Glock’s former wife, Helga Glock, is suing for $500 million—one of the largest civil suits ever filed under the Racketeer Influenced and Corrupt Organization Act—claiming that her ex-husband oversaw a decades-long plan to cut her and her family out of Glock Inc.’s some $400 million annual profits.

Indeed, Pombert’s suit alleges that the object of Glock’s elaborate racketeering operation was tax evasion and “to steal, siphon, divert, and hide monies and assets away from Glock Sr.’s familial relatives.

May 19, 2006 - Vienna, Austria - GASTON GLOCK at the Lisa Film ''Gala Night of Friends for Friends'' - Karl Spiehs celebrates 75th birthday.  Gaston Glock (born July 19, 1929) is an Austrian engineer, and founder of the firearms company Glock. The Glock 'safe-action' pistol is well regarded and has often been copied by other companies. In July 1999 Charles Ewert, a business associate of Glock, hired a French ex-mercenary to murder Glock (who was 70 years old at that time) with a mallet in a garage in Luxembourg in an apparent attempt to cover up embezzlement of millions from the Glock company. Although Glock's injuries included seven head wounds and the loss of about a litre of blood, Glock was able to fend off the attack by striking the hitman twice. The hired killer, 67-year-old J. Pecheur, was sentenced to 17 years in prison for the attack. C. Ewert was sentenced to 20 years as a result of Pecheur's testimony..(Credit Image: © Nekula Dabei/Viennareport/ (Newscom TagID: zumaamericaseight150046.jpg) [Photo via Newscom]

Nekula Dabei/Viennareport/ZUMAPRESS/Newscomm

The Pombert suit, alleging violations to his civil rights, malicious arrest and prosecution, and the existence of a worldwide organized criminal enterprise operated by Glock Inc., all stems from the case of “Panama Charly.”

Glock’s former business associate, Charlie Ewert, was christened with “Panama” by the press for the international shell corporations he set up for Glock Inc. At some point, Glock became suspicious that Ewert may have been moving some of the company’s money to places and accounts to solely profit Ewert, and in 1999, the aging founder set off for Luxembourg to confront his partner. Rather than be found out, Ewert engaged the services of Jacques Pecheur, a former French Legionnaire who also wrestled professionally as “Sparta,” to have his employer killed.

Ewert drove Glock to a parking garage where Pecheur waited with a rubber tire hammer. As Pecheur attacked Glock, Ewert ran away, and somehow Glock survived seven blows to the head and sustained choking without any serious injuries. (Both assailant and victim were in their 70s.) Ewert was convicted on charges of attempted murder in a Luxembourg court in 2003 and sentenced to 20 years in prison.

After the assassination attempt, Glock ordered a 16-strong team of investigators, lawyers, and accountants—run by a man named James Harper III—to conduct a company probe in 2000—what Pombert’s complaint calls a “sensitive, complicated, and multi-faceted mission”—to locate Glock funds diverted by Ewert.

The good news for Glock Inc. was that the group was able to retrace approximately $103 million in misappropriated corporate funds, according to Pombert’s complaint.

But in doing so, Pombert’s suit alleges, Harper and his team uncovered more than they set out to: Glock seemed to be participating in the scheme as well. According to the suit, Glock was paying himself inappropriate royalties for trademarks that never existed; laundering money through a network of sham international companies from Hong Kong to Aruba with phony payments, rents, and loans; and paying Glock-owned companies that provided neither services or products.

Harper’s job was supposed to have been “winning the contest and cementing Glock Sr.’s control over the lucrative” enterprise Ewert had helped build, according to the suit. Instead, his investigation allegedly implicated Glock himself in tax fraud and embezzlement.

At a meeting, Harper confronted Glock with the evidence and Glock seemed agreeable to “cleaning house,” according to the complaint. “Let the chips fall where they will,” Glock allegedly said. But following Ewert’s conviction, Pombert says, Glock instructed his legal team to halt Harper’s cooperation with government and court-appointed officials. Rather that “coming clean...Glock Sr. appeared poised to conceal and even perpetuate the embezzlement and tax fraud schemes formerly run by Ewert,” according to the complaint.

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So Harper and the team quit.

That’s when, according to the complaint, Glock retained attorneys who used a supposed misdealing by Glock’s longtime personal attorney, Peter Manown, as a pretext to get back at the team who knew too much. Manown had confessed to a long history of stealing from his employer and later pled guilty to as much in a Georgia court. (It seems neither traitors nor crooks are in short supply when it comes to Glock Inc.)

According to the suit, Glock’s lawyers pressed city officials in Smyrna to arrest and prosecute Manown, but also Harper and his team for colluding with the ousted lawyer as well as overbilling Glock with legal fees to the tune of $3 million, billing the company for services never rendered, and illegally transferring funds between private lawyer trust accounts.

Pombert, Harper, and businessman Jerry Chapman were indicted in 2010 on the authority of then-Cobb County Assistant District Attorney John Butters and detective Keith Harrison—two state officials who, the suit alleges, had entered into a conspiracy with Glock Inc. in an “extensive and comprehensive campaign of evidence tampering.” All of the charges against the team, which Pombert claims “were fabricated based on falsified evidence, influenced witnesses, and evidence either destroyed or withheld,” were later dropped because the statute of limitations had passed.

Glock’s general counsel and the two of the attorneys named as defendants—Robert Core and John Renzulli—did not return requests from The Daily Beast for comment.

James Deichert—named as a third defendant for writing what the suit claims was a misleading letter in 2007 to the city of Smyrna asking for the arrest and prosecution of members of the internal investigation team on behalf of his client Glock Inc.—told The Daily Beast in an email: “I have never participated in any malicious prosecution, falsified records, made false statements directed to law enforcement, or committed any acts in furtherance of any enterprise, as alleged in the complaint. I look forward to clearing my name.”