A former Glock executive testified Wednesday in Cobb County Superior Court that he and the former CEO of the company collaborated in skimming money from their employer.
The former CEO, Paul Jannuzzo, is on trial for conspiring to embezzle millions of dollars from the gun manufacturing giant for his personal use. In the late 1980s through the 1990s, Jannuzzo and Peter Manown were local lawyers hired to run the fast-growing operations of Austrian gun manufacturer Gaston Glock in North America.
Manown testified that the first time the two men decided to skim money from their employer came when they were discussing the purchase of real estate to house an office in Smyrna.
"The price Glock was willing to pay was more than the price the seller wanted," Manown testified. "And we just, in a conversation at lunch, were saying ‘Gee, it's a shame this much money has to be left on the table and Mr. Glock doesn't even care.'"
And so, Manown said, he and Jannuzzo formulated a plan to get a kickback from the seller without Glock's knowledge.
That was the first of many such collaborations between Manown and Jannuzzo to siphon money from Glock, according to Cobb prosecutors.
The pair also is accused of diverting thousands of dollars from Glock into Cayman Islands bank accounts and forging documents to secure a $1 million loan from Glock's insurance company for a real estate venture in which Manown had an interest.
Manown pleaded guilty in 2008 to three counts of theft in exchange for 10 years probation and no jail time. Jannuzzo, who is charged with stealing a custom LaFrance pistol as well as racketeering, could face up to 30 years in prison if convicted.
Assistant District Attorney John Butters, in his opening statement to the jury Wednesday, described Glock Inc. as a "roaringly successful" company.
When Jannuzzo was hired in the 1980s, the Austrian gun manufacturer was quickly gaining popularity in law enforcement and military circles for its reliable, lightweight and easy-to-use pistol.
With Jannuzzo and Manown at the helm, Glock sales in America grew at a brisk clip.
But then Jannuzzo quit in February 2003 after a confrontation at Gaston Glock's home in Vinings. According to Manown, Jannuzzo called an impromptu meeting there in which he slammed down a stack of papers and told Glock, "you're going to pay me X million dollars, or I quit."
Manown said he was in an uncomfortable position, being pressured by Jannuzzo on the one hand and by Glock on the other. Glock, Manown said, was determined to "get Mr. Jannuzzo."
A few months after the blow-up between Jannuzzo and Glock, Manown said he had a crisis of conscience. He contacted Glock's general counsel in New York to confess that he and Jannuzzo had been stealing from the company. He then flew to Austria to tell Glock personally about what he had done.
What followed was an extensive internal investigation that resulted in the company bringing the case to Smyrna police to seek charges against Jannuzzo, Manown and, in a separate case, three other former executives who were also accused of stealing from Glock.
Those employees, in turn, have alleged that the company regularly engaged in bribery, tax evasion and money laundering to pump up its profits and influence politicians who made decisions about gun policy in America.
The trial is expected to open a window into the inner workings of Glock, a hugely profitable, privately owned company that provides handguns to the majority of law enforcement agencies in the United States.
Manown is expected to take the stand again Thursday to detail more about the thefts that he and Jannuzzo allegedly committed.
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