In an interview years later, Ewert contended: “Glock says I have less than five percent of Unipatent? Glock is a nut!” As for the murder attempt, he blamed unnamed Glock associates who he alleged wanted to gain control of the gun-manufacturing empire. His presence in the underground parking garage was part of a diabolical conspiracy, he said: “They needed me out of the way so they could grab everything.”
Pecheur, faced with the sticky problem of having been arrested at the scene of the attack, had no coherent explanation of his actions beyond a vague contention that it was he who was the victim of an unexplained assault by Glock. Unlike Ewert, Pecheur seemed resigned to a prison term.
In March 2003, Ewert and Pecheur were found guilty after a three-week nonjury trial in Luxembourg. Ewert was sentenced to twenty years, the maximum penalty for attempted murder. Pecheur received seventeen years as the would-be hit man. In the courtroom, Ewert didn’t react to the verdict, sitting motionless. Pecheur sighed but said nothing.
“It is a good day,” Glock said afterward. He added ambiguously, “It is one step in a war.” In 2003, in a rare interview, with Forbes , he explained: “The attack is the best thing that happened to me. Otherwise I would have gone on trusting Ewert.”
Pecheur served seven years of his seventeen-year sentence and was released on good behavior. Ewert remains behind bars at a maximum-security prison in rural Luxembourg, continuing to insist on his innocence.
The investigation and prosecution of Charles Ewert resulted in more than his conviction. It also brought to light a trove of documents describing the intricate financial structure of the Glock companies. This information received little attention outside of certain legal circles in Luxembourg—until two colleagues and I reviewed it while researching an article about internal intrigue at Glock, which was published in Business Week in September 2009.
Gaston Glock’s attorneys aided the Luxembourg investigation with the explicit goal of demonstrating that Ewert had created an international daisy chain of fraudulent Glock affiliates. The Glock legal team argued that Gaston Glock retained ownership of the interrelated companies—or at least those that had any real economic value. While trying to establish that Ewert had made false claims to owning parts of the gun-making kingdom, the Glock attorneys were not shy about conceding that one original purpose of establishing a complicated corporate structure was to shelter portions of the profits from taxation in the United States and Austria.
For example, the Glock lawyers submitted documents to the court in Luxembourg showing that in 1987, Ewert, acting on Glock’s behalf, transferred ownership of the valuable 50 percent stake in the American unit of Glock to Unipatent, the Luxembourg holding company. “The purpose of this holding company was to appear externally as a partner of Glock and hold approximately 50 percent of the shares of its subsidiaries,” according to an April 3, 2000, document entitled “Establishment of the Glock Group,” which the Glock attorneys filed with the court. In other words, Ewert helped Gaston Glock create an essentially fictional co-owner, making it more difficult to trace company earnings generated in the United States.
Other shells established in Ireland, Liberia, and Curaçao were fabricated to issue bills for various “services” to Glock headquarters in Austria and to operating units in Latin America and Hong Kong, the documents show. But these service firms “had no economic substance and were motivated by tax reasons,” according to a confidential ninety-two-page analysis of the Glock companies conducted by Pricewaterhouse-Coopers. The Luxembourg court had appointed a provisional administrator to sort out who owned Unipatent, and that administrator hired the giant auditing firm to do the arduous forensic accounting. Pricewaterhouse found that the Glock service companies’ role appeared to be the shielding of company profits from potential taxation in Austria, Latin America, and Hong Kong. The Latin American and Asian operating units, in turn, appeared to be used to extract profits from the US subsidiary, Pricewaterhouse alleged.
The point of the paper shuffle, as noted, was to reduce Glock’s tax liabilities. This was accomplished by having pistols manufactured in Austria sold first to the Latin American and Hong Kong units and then resold for higher prices to Glock, Inc., in Smyrna. By inflating costs to the American subsidiary, this practice decreased the profits the subsidiary was required to report to the US Internal Revenue Service.
The court in Luxembourg did not show any interest in enforcing the tax laws of other countries—hardly surprising, given that Luxembourg’s economy rests on its reputation as a tax haven. The court was trying to sort out whether Ewert had a legitimate claim to Unipatent and half of Glock’s lucrative US unit. Once the Luxembourg judiciary concluded that, on the contrary, Ewert was an embezzler and failed murderer, it left the propriety of Glock’s tax-minimization strategies to others.
As part of his effort to clarify ownership of his companies, Glock hired a team of American investigators based in Atlanta. The lead private eye, James R. Harper III, had served as a federal prosecutor and was active politically in Republican circles in Georgia. Harper retained a quartet of former cops and US government agents to help with his work for Glock. Their locked workspace on the Glock grounds in Smyrna was off-limits to regular company employees. Before long, the Harper group was traveling around the world, looking for evidence of Ewert’s wrongdoing. Referring to themselves as the “A-Team,” the secretive private detectives reported only to Paul Jannuzzo and, sometimes, directly to Gaston Glock.
Jannuzzo, who had risen to chief operating officer of Glock, Inc., and was the company’s most senior executive in the United States, seemed a little baffled by the mysterious Harper group. “A lot of the time,” he told me, “no one knew what these guys, the so-called A-Team, were even up to.”
Harper, a captain in the Marine reserves with a bulldog head and demeanor to match, traced the peripatetic Ewert to far-flung locations and connected him to unsavory characters. Harper amassed enormous files of corporate documents, witness interview transcripts, and PowerPoint flowcharts. The A-Team discovered that Unipatent was once owned by Hakki Yaman Namli, a controversial Turkish financier with a reputation for doing business in North Cyprus, a well-known center for money laundering and other financial fraud. The Glock-affiliated Panamanian company Reofin also had a tie to Namli, Harper determined. In 1995, Reofin and Namli co-founded Unibank Offshore, a bank in North Cyprus.
Harper warned Glock and Jannuzzo that by associating Glock with Unipatent, Reofin, and Unibank Offshore, Ewert had created a seeming link between the Glock companies and Namli. In a memo dated November 1, 2000, Harper wrote that Gaston Glock was “in danger of being flagged as an international money launderer because by all appearances … Ewert was working at [Gaston] Glock’s direction up until the time of the assault” on Glock. “Even a rumor in the press about the Glock connection to Cypriot money laundering,” Harper added, “could have significant if not devastating effects on Glock sales, especially to law enforcement.” The private investigator concluded: “Mr. Glock doesn’t understand the breadth of the problems or the potential disaster that could befall him.”