Case Studies

Tilman Reissfelder

Tilman Reissfelder, a German tech entrepreneur, was one of Fabien Gaglio’s favourite victims. Over a period of just three years, Gaglio stole more than €7 million from Reissfelder in a series of brazen frauds.

Gaglio regularly raided Reissfelder’s account if he needed to repay other clients or to fund his lavish lifestyle. An article by the magazine Brand Eins, which gives Reissfelder the pseudonym Michael Kleeman, details some of these thefts.

In one example, Gaglio arranged for $1 million to be transferred from Reissfelder’s account to a company in Hong Kong, apparently to buy a nuclear fallout shelter. But there was no fallout shelter and instead the money was transferred to a company in the British Virgin Islands. Reissfelder’s $1 million then moved on several more times before it ended up in the bank account of an Italian leather goods firm. One of the firm’s owners was related to Gaglio, Brand Eins reported.

Gaglio also transferred €2.2 million of Reissfelder’s money to another client, possibly to cover investment loses. The client who benefited was Giorgio Moroder, a composer who was won three Academy Awards including for Top Gun’s Take My Breath Away. Moroder has so far declined to return Reissfelder’s money and has brought a lawsuit against Gaglio claiming he was also defrauded.

Gaglio’s blatant behaviour even included siphoning €120,579 from Reissfelder’s company, Boavista International, to pay for a sculpture that celebrated the 2011 Rugby World Cup in New Zealand. Reissfelder had no idea that his money paid for the 3.6m statue, which was unveiled at a formal ceremony in Wellington, New Zealand.

The statue was a donation from a group called The Rugby Lovers LLP, which generously flew Gaglio and his friends to New Zealand and hosted them during the tournament. The Rugby Lovers LLP picked up bills for flights, accommodation, dinner for 45 people, cultural activities etc. But it wasn’t The Rugby Lovers LLP paying for this party, it was Gaglio’s clients. In total, The Rugby Lovers LLP drained about €1.5 million from the accounts of Gaglio’s clients, including Reissfelder.

Gaglio also stole money directly from his client. In testimony to the Swiss prosecutor, Gaglio admitted that he had fraudulently transferred €350,000 from Reissfelder’s account to a company called Carlyle Holdings in Hong Kong. Gaglio said:

“You ask me whether these operations are valid. My answer is no, these are fraudulent transactions… You ask me who the beneficial owner of the company is. I don’t remember. It is possible that I happened to be the ultimate beneficial owner…”

Gaglio also arranged for Reissfelder to invest in a French company called Cap Sud (see section in Media) but instead stole the money to pay for his school fees, rent on his home and to pay for holidays.

When Reissfelder gave evidence to the prosecutor he explained that he had never made a single cash withdrawal from his account at Bank Hottinger & Cie and that he never authorised any. Despite this, multiple cash withdrawals were made over several years. Gaglio had literally been using Tilman Reissfelder’s account as a personal cash machine.

 

Benedeks

Diana and Andrew Benedek are Canadian engineers who sold their company for $656 million. Shortly after the sale, the couple were introduced to a charismatic money manager called Fabien Gaglio. That was in 2007 and over the next five years Gaglio stole millions of dollars from the Benedeks.

The Court of Luxembourg judgement gives specific examples of how Gaglio defrauded the Benedeks. For example, in March 2011, Gaglio transferred €2 million from a company owned by the Benedeks to a Belize-registered entity called Pilsander. The money then moved on to Sigma Private Equity in Luxembourg, which in turn bought shares in a French events company called Eventeam.

Documents authorising the transfer bore the signature of Andrew Benedek and Gaglio claimed that he had made the investment into Eventeam on behalf of the Benedeks. The Benedeks denied having authorised this transaction and the Luxembourg Court ruled that Andrew Benedek’s signature had been forged.

It also emerged in the Luxembourg trial that Gaglio owned Sigma Private Equity via a company in Cyprus. He had therefore fraudulently transferred his client’s money to his own company and then bought shares in Eventeam, which was run by Gaglio’s friend Jeff Torto. The court ruling states:

“Gaglio admits having concealed this investment from the Benedeks, by using forged statements of their assets. He made them believe that the money was invested in accordance to their wishes, which was not the case. The Court grants no credibility to Gaglio’s claim that he thought the investment would benefit the Benedeks. He could not ignore the fact that he was Sigma’s sole beneficial owner, and knew that he never included [the Benedeks] as a shareholder.  Gaglio acted fraudulently in order to embezzle money for his personal gain.”

On another occasion, Gaglio obtained a $5 million loan from Banque du Luxembourg on behalf of a company owned by the Benedeks. The loan was collateralised by the Canadian couple’s assets. The loan document – a Commercial Pledge for the Account of a Third Party – has the signature of Andrew Benedek on it but Gaglio has admitted this was forged. Gaglio told the Court:

“Yes, everything is fake. The client had no intention of authorising the transfer and all the signatures of the Benedeks were forged by SA or someone else I had asked to.”

Once the loan was granted, Gaglio transferred the $5 million to a company called Great Silk Way Economic Trade Ltd. in Hong Kong. The money then disappeared. Gaglio said that part of the transfer was used to reimburse another of his clients, Alfonso Ziribotti, but he has refused to disclose where the rest of the money went or who owned Great Silk Way.