In a scene worthy of a Hollywood movie, the flamboyant fund manager Fabien Gaglio surrendered himself to French police in Paris in January 2013 and confessed to a decade of lies and fraud at Hottinger & Partners SA (HPSA).
After giving the police his possessions – €500 Euros in cash – Gaglio made a statement and then walked free. It wasn’t until three years later that Gaglio was found guilty of fraud and money laundering by the Luxembourg courts. The Swiss prosecutors have still not brought charges against him.
Bloomberg BusinessWeek speculated in its story on Gaglio that the fraudster had chosen to given himself up in France because the country rarely permits the extradition of its citizens. So Gaglio would not face justice in, say, the United States, where the penalties for white-collar crime are much more severe.
This could be important to Gaglio because, Bloomberg suggested, there was evidence that he had been laundering money for clients on a massive scale and for many years. “[He] helped businessmen, politicians, and criminals wash roughly $300 million through the offshore financial system,” the magazine said.
While there is little public evidence to support this allegation, it casts new light on Gaglio’s character.
Appearances are Deceptive
Gaglio spent years deceiving clients by dazzling them with his charm, lavish lifestyle and his willingness to splash the cash. But while clients were blinded by this dazzling version of Gaglio, his employees at Hottinger & Partners SA (HPSA) saw a different side of his personality.
SA, who was in charge of administration and accounting at HPSA, described Gaglio as a tyrant. In an interview with the Geneva prosecutors on 5th November 2014, SA outlined Gaglio’s abusive personality in detail:
“I would like to express myself on the atmosphere created by Gaglio in the office. We were drowning in work. We worked like robots. At a feverish pace, 15 or 17 hours a day. Personally, I never took any lunch breaks, but when I would, (Gaglio) would call me. It was like this seven days a week. I very rarely took holidays, but when I could, it was only where I worked from that changed… There were no room left for our free will… Gaglio was a very demanding boss, merciless, to the point that we felt guilty of producing the next document [i.e. forged document], because we knew we were out of bounds. Let me add that we were clearly told by Gaglio not to speak about any of this to anyone. Now we understand why.” (Interview 5th November 2014, p18/19.)
Based on this testimony and from interviews with others, Gaglio sounds like a narcissistic bully. Specialists typically describe such individuals as exploitive. They take advantage of others to achieve their own ends but also have a strong sense of self-importance and entitlement and therefore expect automatic compliance with their desires. Gaglio told the Swiss prosecutor that in most cases, he had given instructions to SA to forge signatures on bank transfers or loan agreements and that she would do so without asking any questions out of a “profound admiration” for him. (Gaglio’s interview 5th November 2014).
In another interview with the prosecutor, Gaglio was asked about Adam’s description of him as tyrannical. Gaglio responded saying: “I did happen to be bossy and commanding sometimes, but I certainly was not the “tyrant” that SA said I was.” (Interview 13th August 2014.)
Where Did Gaglio’s Money Go?
Gaglio claims to have lost all his money and that when he gave himself up to French police he “had nothing left”. As a result, the Court of Luxembourg fined Gaglio only €150,000 but there are questions over whether he really is as penniless as he claims.
For example, where is his legendary art collection, which is said to have included pieces by Andy Warhol?
As Bloomberg reported, Gaglio’s artwork could have been auctioned off to compensate his victims but the collection was apparently burgled from his property a few weeks before the 2013 confession. Gaglio elaborated further claiming that he was at a restaurant in Nice when an unknown individual approached him and coerced him into disclosing the location of his art collection, which was stolen later that night. The Court in Luxembourg stated that “Gaglio’s explanation relating to the sudden disappearing of his paintings collection, without evidence, is not credible.” There has been no further investigation to locate the paintings.
Gaglio’s clients and colleagues were also under the impression that he had a lot of money. Jean-Francois de Clermont-Tonnerre, the co-founder of HPSA, said in testimony that Gaglio had told him when they first met that he was worth about €15 million.
Bloomberg also reported that Gaglio is now living in a rented villa on the French Riviera at a cost of $10,000 a month. So much for penniless.