Details of Massive Fraud Revealed by Whistleblowers

Whistleblowers have released confidential documents from a fraud investigation into Fabien Gaglio in an attempt to encourage Swiss prosecutors to bring charges against the investment manager.

The Huffington Post reported that a website (www.hottingersa.com) had been launched by whistleblowers to bring attention to the crimes committed by Gaglio at Hottinger & Partners SA (HPSA).

The French money manager admitted in 2013 that he had defrauded HPSA’s clients for years and he was convicted of fraud and money laundering by a court in Luxembourg in 2016.

However, the Swiss authorities have still not brought charges against Gaglio despite investigating the case for five years. The Hottinger & Partners Fraud website has released numerous documents from the prosecutor’s investigation, including transcripts of interviews with Gaglio and witnesses.

The Hottinger website says: “The Swiss authorities have amassed a huge amount of information but have done nothing with it. We are therefore releasing hundreds of pages of evidence so that everyone can understand how Gaglio perpetrated this fraud and how he got away with it for so long”

Gaglio was the co-founder of HPSA with his former business partner Jean-Francois de Clermont-Tonnerre. It was part of the Hottinger Group, which included the Swiss private bank Hottinger & Cie.

Clermont-Tonnerre discovered his partner’s fraud in early 2013 and Gaglio turned himself in to French police shortly afterwards.

According to the Huffington Post, Gaglio told the Court of Luxembourg that he had no money left and, as a result, he was only fined €150,000. But the whistleblowers behind the Hottinger & Partners Fraud website ask how this can be true when Gaglio had boasted to clients and friends about having an extensive art collection that included works by Andy Warhol.

Gaglio explained to the Luxembourg Court that the entire art collection had been stolen shortly after an unknown individual had approached him at a restaurant in Nice and forced him to reveal the location of the collection. The Court of Luxembourg said in its ruling: “Gaglio’s explanation relating to the sudden disappearance of his paintings collection, without evidence, is not credible.”

Despite Gaglio’s claim that he had no money left, BloombergBusinessweek reported in 2017 that the fraudster was now living in a rented villa on the French Riviera at a cost of $10,000 a month.

The Hottinger & Partners Fraud website also uses the documents it has obtained to correct some of the information reported by BloombergBusinessweek in its article. For example, Bloomberg reported that Gaglio owned a Belize-registered company called Glendale and he used this vehicle to transfer funds “back and forth until they became almost impossible to trace”. Bloomberg’s implication appears to be that Gaglio was using Glendale to launder money for his friends and clients.

Bloomberg names some of the people who received money from Glendale, including Gaglio’s former business partner Clermont-Tonnerre. While Gaglio may have been using Glendale for illicit purposes the evidence submitted to the Swiss prosecutor shows that at least some of the payments, including all of those to Clermont-Tonnerre, were legitimate.

There are bank statements in the prosecutor’s evidence that show on a number of occasions that Clermont-Tonnerre paid for Gaglio’s expenses such as credit card bills and he was then repaid this money from Glendale. The website shows a bank statement that clearly states Clermont-Tonnerre was paying Gaglio’s American Express credit card bill. The same amount of money was then repaid to Clermont-Tonnerre from Glendale.

“By only looking at the payments made by Glendale, Bloomberg appears to have jumped to conclusions that are not supported by the evidence now in the hands of the authorities,” the website said. “None of these transfers to Clermont-Tonnerre are under investigation by the Swiss Public Prosecutor.”

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.