Three men have emerged unscathed from a duel with the Smyrna-based, gun manufacturing giant Glock over allegations that they overcharged the company by millions of dollars.
Cobb County District Attorney Vic Reynolds on Thursday announced he would not to prosecute former federal prosecutor James Harper, Marietta accountant Jerry Chapman and Atlanta attorney Jeffery Pombert on theft charges. A recent state Supreme Court ruling essentially nullified the charges by finding that the state couldn’t extend the statute of limitations, meaning that the offenses happened too long ago to be prosecuted.
The men could still have been prosecuted on a racketeering charge, which alleged they set up bank accounts and transferred Glock money into them for their own use. But Reynolds said after reexamining the case he felt the remaining charges were not substantive enough to stand alone.
An investigation by The Atlanta Journal-Constitution in 2011 raised concerns about the prosecution of Harper, Chapman, Pombert and two Glock executives, all of whom claimed to have knowledge about illegal activities within the corporation and its related companies.
Harper, Chapman and Pombert, known as the A-Team, were hired in 2000 to investigate an effort to take over the company by a financial adviser of company founder Gaston Glock. The take-over attempt was hostile in the extreme, including an assassination attempt on Glock by a former member of the French Foreigh Legion wielding a hammer, court documents said.
Glock executives approached authorities in 2007 claiming that the A-Team overbilled the company by about $3 million.
The Cobb County district attorney brought the case years after Harper and his codefendants stopped working for the pistol maker. Glock didn’t issue a complaint until after some former employees started accusing the company of tax evasion, bribery and wire tapping.
“This was a dispute over legal fees,” said Harper’s defense attorney Don Samuel. “Rather than seeking to resolve this dispute through arbitration or a civil lawsuit, which is the way it is usually done, Glock decided to convince Smyrna Police Department and ultimately the Cobb DA to pursue criminal charges.”
The men had pleaded not guilty to 10 counts of theft or attempted theft, as well as one count of racketeering.
Harper said he always expected the case would end with a not guilty verdict or the charges being dropped. The charges of fraudulent billing never had merit and prosecutors never had any evidence, he said.
“What demonstrated the weakness of their case was the brief before the Supreme Court,” Harper said. “The state argued facts not in evidence and cited testimony never given in order to support an indictment for crimes that never happened.”
The timing of the charges against Harper and others was curious to many gun industry insiders.
Harper said the investigation they performed was thorough, and Gaston Glock agreed with the billing at the time. He said he quit contracting with Glock after he was told not to cooperate with the IRS, FBI or authorities from Luxembourg without approval from the gun makers’ Austrian attorneys.
Now that his own case is settled, Harper would like to see the issues in the case against Paul Jannuzzo, another Glock employee convicted in March 2012 of stealing from the company, addressed.
Jannuzzo, the former CEO of Glock Inc., was sentenced to seven years in prison followed by eight months of probation. He was accused of conspiring with another former Glock executive to divert about $5 million from the company between 1991 and 2003 using cloned bank accounts, forged documents and fraudulently obtained loans.
The linchpin of the state’s racketeering case against Jannuzzo was the alleged theft of a custom pistol that the company loaned Jannuzzo, and he never returned. In that case as well, the statute of limitations was called into question.
“I hope district attorney Reynolds will look closely at the Paul Jannuzzo case, which is now under appeal, because I believe a great injustice has been conducted in that case,” Harper said.
Jannuzzo had an explosive falling-out with Gaston Glock when he quit in 2003. He threatened during a confrontation at the founder’s house in Vinings to expose wrongdoing by the company if Glock did not pay him several million dollars, according to testimony given by his confessed conspirator, former Glock executive Peter Manown, at Jannuzzo’s trial.
Reynolds said Thursday he does not believe the state Supreme Court ruling will have any bearing on Jannuzzo’s conviction.
Some legal experts were critical of county’s handling of the Jannuzzo case because Glock’s private lawyers took a leadership roll in investigating and prosecuting it.
Ron Carlson, a University of Georgia law professor, said that while Jannuzzo’s case involves a different type of theft, the state Supreme Court’s decision “certainly doesn’t hurt (Jannuzzo).”
“It imparts a tone about statutes of limitations that is helpful to defendants generally,” Carlson said. “There are indications there that the statute of limitations will be strictly applied.”
Jannuzzo’s lawyer, John Da Grosa Smith, declined to comment about the development Thursday, but said he plans to file a response to the state’s brief in the Georgia Court of Appeals on Monday.