Glock family feud leaves millions at stake

The Local
The Local - [email protected] • 13 Oct, 2014 Updated Mon 13 Oct 2014 16:46 CEST
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Austrian hand-gun maker Gaston Glock Sr. is engaged in a bitter tussle with his family over a divorce settlement, with accusations of hidden money and cheating from his ex-wife, Helga.

According to a report in Business Week, Helga Glock and her adult children claim that in 2011, Gaston Glock Sr. cut all ties with his family under the influence of his 50-year-younger wife, Kathrin Tschikof.

On Thursday, his ex-wife and their children launched a $500 million lawsuit in federal court in Atlanta, Georgia claiming that Glock Sr. has engaged in racketeering, causing his family substantial losses.

The lawsuit alleged that the main goals of the defendants' "scheme" were to "siphon, divert, and hide monies and assets away from the view and reach of Ms. Glock."

The complaint says the Glocks, who married in 1958 and divorced in 2011, "co-founded" the gun business in 1963. According to John Smith, the attorney representing the family, Helga Glock "continues to have an ownership interest" in the company. 

"Because of Defendants’ racketeering scheme, instead of having a  15 percent interest in 100 percent of Glock, Inc., Ms. Glock now has a 1 percent interest in 50 percent of Glock, Inc.," the complaint says. 

Helga Glock's complaint is over 350 pages long and accuses Gaston and the other defendants of "hundreds of violations of the Federal mail fraud, wire fraud, national stolen property, and money laundering statutes." These violations include the alleged use of forged documents, "fraudulent invoicing," "sham royalty/licensing payments," and "phantom shipments and wire transfers" through a complex network of shell companies.

In addition to these alleged crimes, the complaint accuses Gaston of treating his immediate family members in a manner reminiscent of "the senseless and self-destructive rage of Shakespeare’s King Lear."

Helga accuses her ex-husband of hiding hundreds of millions of the family's money outside of Austria, and cheating her out of a substantial share of the global weapons maker.  In addition, a related suit alleged that soon after a stroke, the 85-year-old billionaire had an affair with a woman more than fifty years his junior.

Glock started as a curtain rod maker, and despite no experience with firearms, in 1980 he designed and successfully sold the Glock 17-round 9mm pistol to the Austrian military, launching a brand that was subsequently adopted by law enforcement agencies from around the world.

Glock has generally maintained a low profile, until a bizarre incident in 1999.  During a business trip in Luxembourg, Gaston Sr. fought off a hitman hired by his top financial advisor.  Despite the hitman being a professional wrestler and former member of the French foreign legion armed with a rubber mallet, Glock successfully fought him off and survived, with the would-be hitman and the advisor who hired him sentenced to lengthy jail terms.

In 2008, Gaston Sr. suffered a stroke at the age of 79.  While in recovery, he fired Helga, daughter Brigitte and sons Gaston Jr. and Robert from paid jobs in his company, and began to change family trusts to exclude them from ownership.  

In court filings in the U.S., Gaston Sr. has said that he bears Helga and their children no ill will. Financially they’ve been amply provided for, he has said. He denied wrongdoing of any kind. In a 2010 letter making these points and excluding Helga and their children from any operational role in the company, Gaston Sr. demanded “appreciation, compliance, and acceptance and the respect I deserve as a father.”

“At the time when Gaston Sr. started pushing his family out,” Helga stated in her March 2013 affidavit, “he had a worldwide wealth of billions. It is now becoming evident that in anticipation of filing for divorce, Gaston Sr. had already started to move and hide personal and corporate assets.” 

Before the divorce was finalized in June 2011, Gaston Sr. amended trust documents to strip Helga and the children’s rights and benefits entirely, she alleges. Most of the details remain unknown to her, she adds. One alleged shuffle involved the transfer of €172 million in cash and “all of the properties and real estate acquired during our marriage” into a private Austrian trust Gaston Sr. alone controls.

He married Tschikof in 2011 and, according to Helga, put his new wife on the supervisory board, “a position that he has denied his own grown-up children after working at the company as employees for over 20 years.”

Gaston Sr. has denied all the accusations against him. His lawyers said in a 2013 U.S. court filing that his ex-wife has “resorted to false ad hominem attacks.” What she calls “illusory trusts” meant to obfuscate the family fortune are legitimate court-supervised legal organizations in Austria, Gaston Sr.’s lawyers have argued, and “none of the Austrian courts has ever raised any issue relative to the structure of any of the corporate entities at issue in this case.” Moreover, the lawyers maintained, Helga voluntarily approved of the relevant trusts, meaning she has no basis for complaint.



The Local 2014/10/13 16:46

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