Dueling portraits emerged this week of gun maker Glock as both a company oblivious for years that it was being bilked by greedy executives and a company capable of steering an investigation into a former employee who clashed with its wealthy founder.
One thing that is certain as the Cobb County embezzlement trial for former Glock Inc. CEO Paul Jannuzzo heads into its second week: the role the international gun manufacturing company has played assisting the district attorney's investigation of Jannuzzo continues to be at issue.
The defense has not yet presented its case. However, Jannuzzo's lawyers have repeatedly highlighted the company's heavy-handed involvement to cast doubt on whether Glock or Jannuzzo is the real victim in pretrial motions, subpoenas and objections taken up outside the presence of jurors.
As the public face of the company throughout much of the 1990s, Jannuzzo served as its lead counsel and CEO of Glock's North American subsidiary, which is headquartered in Smyrna. He reported directly to the company founder, Gaston Glock, in Austria. During Jannuzzo's time at Glock, the gun manufacturer's sales soared and Glocks became one of the most widely used pistols in the world, thanks to their lightweight design, ease of use and reliability.
Jannuzzo, 55, is accused of conspiring with another former Glock lawyer, Peter Manown, to divert millions of dollars from Glock between 1991 and 2003 using cloned bank accounts, forged documents, sham investments and fraudulently obtained loans. He has pleaded not guilty.
Jannuzzo's defense attorney, John Da Grosa Smith, said in court Wednesday that Glock is on a "witch hunt" to get Jannuzzo, who quit on bad terms in 2003.
The defense has raised concerns with the judge this week about records they subpoenaed from Glock that show over $200,000 was paid last year to an outside attorney, Robert Core, to aid prosecutors in preparing the case. Core is a former FBI agent with 26 years of experience handling white-collar investigation, according to his website.
The defense accused the state in a pretrial motion of playing into Glock's hands by essentially outsourcing the prosecution to the company.
Core sat at the prosecution table during pretrial hearings to consult with Assistant District Attorney John Butters. Butters was also seen at those hearings flipping through a thick three-ring binder of documents with a cover page featuring Glock's corporate logo.
One state's witness, David Roberts, a manager for a Cayman Islands company that insures Glock, testified this week that the only investigator who had traveled to meet with him prior to the trial was Core.
Butters, the prosecutor, said that Glock's involvement is not unusual and that the defense's argument is "mind-boggling to me."
"Their point is the DA needs to go to a company and say, ‘everybody step aside, I don't want anyone to help me,'" Butters said. "They think if a company discovers a crime they shouldn't investigate. I don't want to live in a world where a company can't investigate the theft of their property."
Jannuzzo's alleged conspirator, Manown, testified on Wednesday that Jannuzzo's departure from the company in 2003 followed an explosive confrontation at Gaston Glock's home in Vinings. Jannuzzo slammed down a stack of papers and told Glock, "you're going to pay me X million dollars, or I quit," Manown said.
Manown did not say what was in the papers.
A few months later, under pressure to choose loyalties between Jannuzzo and Glock, Manown said he suffered a breakdown. He contacted Glock's lawyer in New York to say that he and Jannuzzo had been stealing from the company for years.
That confession launched an internal investigation that resulted in the company bringing information about the alleged crimes to Smyrna Police. Jannuzzo was indicted in 2008 on charges of theft and racketeering.
Manown pleaded guilty in 2008 to three counts of theft and was sentenced to 10 years on probation. As part of the plea he also agreed to give a sworn statement, to prosecutors about the pattern of thefts that he and Jannuzzo allegedly engaged in. Another of Glock's attorneys, John Renzulli, led the questioning of Manown for that statement.
The same year Jannuzzo was indicted, he accused the gun maker of using its complicated corporate structure to hide profits from the Internal Revenue Service. He also supplied the IRS with boxes of internal Glock documents, according to a story published in Business Week.
In October, The Atlanta Journal-Constitution raised questions about why Glock handed its case to its local police department instead of going to the FBI, which employs a 250-agent national white-collar crime unit. In doing so, Glock gained the opportunity to participate in the prosecution of former employees who were accusing the company of corrupt business practices.
Butters said that many criminal actions have the potential to be prosecuted in either federal or state court. "Companies have the right to go to whichever one they choose, or both," Butters said.
Brian F. McEvoy, a former federal prosecutor in Savannah who exclusively handled white collar crimes, said it's not unusual for a victim such as Glock to cooperate with the government by providing the prosecution with their own internal investigation, but he said it is uncommon for the District Attorney's Office to essentially deputize the company's investigator to act on its behalf.
"It raises questions and it just requires close examination of the information that has been obtained," said McEvoy, who is now in private practice at Chilivis, Cochran, Larkins & Bever in Atlanta. "Obviously it doesn't have the same type of objectivity you might expect from a government-run investigation when you have the victim conducting the investigation."
About the Author
