(CN) - Gaston Glock Sr., co-founder of the firearms company that bears his name, engaged in racketeering, fraud and money laundering to cheat his ex-wife out of $500 million, a federal lawsuit claims.
Gaston and Helga Glock founded Glock KG in 1963 with money the newlyweds had saved to buy a home in Vienna, Austria. Instead, they bought land to build a factory to produce a gun Gaston initially designed for the Austrian army.
Today, the company supplies firearms to two-thirds of U.S. police departments, and has a massive following among gun enthusiasts. It moved its headquarters to Smyrna, Ga., in 1985.
In a complaint filed in the federal court in Atlanta, Helga Glock says her former husband stole the company they built together by transferring 50 percent of it into a subsidiary firm, a move she says she did not know about until after the couple divorced in 2011.
But she says, Glock and his associates, "[d]id not limit themselves to stealing 50% of Glock Inc. Instead, they set up an elaborate structure of domestic and international entities that was designed to steal much, much more."
Helga Glock says the alleged scheme -- built upon what she says were improper royalty payments and money laundered through, among other things, sham lease and loan agreements -- was carried out in collaboration with defendant Charles Ewert, a Luxembourger nicknamed "Panama Charly" because of his use of entities incorporated in that jurisdiction.
"Together, they developed a comprehensive plan for structuring and operating the so-called 'Glock Group' in such a way that Glock Sr. and his associates would be able to systematically appropriate virtually all of the income and assets of the Company for themselves," she says, adding, "The Glock Group was created to and continues to operate as Glock Sr.'s alter ego."
Helga Glock claims that to carry out their scheme the defendants "carried out a methodical, deliberate pattern and practice of conducting sham transactions over a period of decades" and that proceeds generated by these transactions "were treated as the personal funds of Glock Sr. and his associates."
All the while, Helga Glock says, she was kept entirely in the dark. She says whenever she enquired about various transaction or royalty payments, her former husband would deflect her questions.
"I strongly hope you will trust me, won't you," she claims he said.
"Trust me, it's all for the family."
Gaston Glock, 85, has since married, Katrin Tschikof, a woman 50 years his junior who is now on the firearm maker's advisory board.
He also had a high-profile falling out with Ewert, who is now serving 20 years in prison in Luxemburg for arranging to have his former business partner murdered.
Helga Glock says in her complaint that she doesn't know what led to the falling out between the two men, but that the two men had scheduled a meeting in July 1999 to settle their differences. Upon his arrival at the meeting, Glock Sr. was attacked with a mallet by an individual named Jacques Pecheur . Ewert, who was at the scene at the time, turned and ran away.
The murder was intended to cover up a $100 million embezzlement of Glock company funds, the complaint says.
Despite the incident, Helga Glock says her ex-husband's reliance on "a tangled web of fictive legal relationships, offshore business entities, and international financial transactions" continued unabated, as did his penchant for spending.
In a statement submitted as part of the case, Peter Manown, a former vice president of Glock, said his one-time boss, "spends money on mistresses, on houses, on sex, on cars. He bribes people. He's just a bad guy."
In her complaint, Helga Glock claims her husband spends huge sums of money to entertain clients at strip clubs; that she and her children were tricked into giving away the rights to foundations now used to fund a horse farm where the Olympic show-jumper London is stabled.
Helga Glock says her husband spent $15 million on the 12-year-old silver-medal winner as a gift for his new wife.
In a footnote, she says the new Mrs. Glock plans to ride the horse in the "Glock Horse Performance Center," which was built near the couple's home in Carinthia, Austria. She also says the couple intends to enter London in the 2016 Olympic games, citing a report in the Austrian Times.
In addition to at least $500 million in damages, Helga Glock seeks an order prohibiting her former husband from "any further transfer, sale, or other disposition of any fraudulently obtained or stolen property"; the disgorgement of the full amount of ill-gotten funds; the removal of all of the defendants from roles with the company.
She is represented by John Da Grosa Smith of Smith Horvath LLC in Atlanta.
Neither Glock Sr. or Glock Inc. has comment on the lawsuit.
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