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A fraudulent French banker stole millions and caused the bankruptcy of the oldest Swiss bank

Frenchman Fabien Gaglio faces up to 10 years in prison for embezzling more than 60 million francs from the accounts of Canadian, Italian and American clients, and has pleaded guilty to the main charges against him.

In a report published by the newspaper “Le Figaro” (lefigaroFrench writer Lina says that one of the smartest fraudsters in the world will appear next March before the Geneva Criminal Court, against the background of frauds that caused the bankruptcy of one of the most famous Swiss private banks.

According to the indictment, the former banker (now 48) allegedly embezzled about CHF9 million and used his clients’ money to obtain luxury utilities and services for him and his family.

According to the author, the newspaper obtained hundreds of pages of court documents, which revealed details of Gaglio’s fraud, structural weaknesses in the management of bank accounts, including gullible clients, the recklessness and negligence of bankers, and loopholes in regulations.

The young banker, since 1998, began manipulating the accounts of his clients and was obtaining money illegally (Shutterstock)

The beginning of the fraud

On the morning of January 23, 2013, Fabien Gaglio surrendered to the French police at the Palais Conciergerie in Paris, recounted the details of his trip and confessed to his fraud. One of his former colleagues described him as “a charismatic and charismatic man who had no academic qualifications to work in the bank”.

Gaglio was living in Nice, and although he did not finish his law studies, he obtained a false certificate and applied for a job at Merrill Lynch. After he was exposed in France, he found a job in London, first at Union Investment Management (UIM) and then at Rothschild Bank. His marriage cost him about 100,000 euros, and he lived in a beautiful apartment in “Sloane Square” in London, and his children were studying at a private school.

According to the writer, since 1998 the young banker began manipulating the accounts of his clients and illegally obtaining money. According to his confessions, during his work at Union Investment Management and then at Rothschild Bank, he earned two million euros.

Between 2003 and 2004, he found himself unemployed, but falsified documents to make clients believe he was still working. “It became a debt to me, and I thought that one day I would have the possibility of earning enough money to pay it,” he assured the police.

French magic

“He spoke very good English, and people succumbed to his French charm,” says a former colleague of Fabian Gaglio. “He was a skinny tan with a bleak, sultry look. He smoked a lot, but his eyes concealed everything.”

Another colleague asserts that he was “very elegant and of good taste, he was intelligent and organized. He really represented the image of a successful, sympathetic man with a high level of emotional intelligence.”

In 2005 Fabian Gaglio moved to Geneva and was appointed to Hottinger & Partners, a wealth management firm overseen by Hottinger & Cie. At that time, Fabian Gaglio became the “hunter” working to attract clients and grow the business of the company and the parent bank.

Gaglio customers

Gaglio’s clients include Italian musician Giorgio Moroder and dragster driver Danny Rowe, and since 2006 he’s been dealt with by the Canadian couple Benedek, who became wealthy thanks to their invention of a water purification system.

When he was receiving his clients at the Höttinger Bank headquarters in Geneva, Fabian Gaglio would tell them that he was one of the partners in the bank, even though he was only a partner in Höttinger & Partners, which is virtually independent of the bank.

His basic salary was estimated at about 250 thousand francs annually, but it was not enough to finance the luxurious life he aspired to, and yet he told everyone that he was a millionaire.

Financial deception

At Hottinger’s company, Gaglio followed the same path he did in London, withdrawing money from his clients’ accounts, giving them false income statements that showed good performance, and then creating transfer orders or fake emails to drain their money.

At the end of 2012, Fabian Gaglio’s best client, Andrew and Diana Benedek, thought they had $30 million, when in fact they had only $12 million left, out of the $26 million initially transferred. Another victim, Danny Roe, believed he had $19 million, while only $300,000 was left in his account.

Another client – a dermatologist from California – and his wife thought they had $15 million, when they only had $3 million. According to Maryam Mazo, the couple’s lawyer, “her clients were particularly hurt because it was a betrayal by someone who claimed to be their friend”.

According to the indictment, Fabian Gaglio was asking some Höttinger & Partners employees to change data under carefully thought out pretexts, such as increasing the value of certain accounts.

No one at the company doubted Gaglio’s behavior, and “I was told to, and I did,” says one former employee during questioning. Another asserted that staff were exhausted under the “workload” and “frenetic pace” imposed by Gaglio.

In 2012, Fabian Gaglio received 422,000 euros from the accounts of the dermatologist and his wife. He wanted to buy a vineyard with his well-known chef friend Yannick Alleño, but the transfer of the money raised suspicions in the bank. Gaglio got off the hook by claiming it was “a loan made by the client, and the bank will receive a contract soon”.

A similar scenario occurred in 2011, when he withdrew 100,000 euros in cash from the doctor’s and his wife’s accounts, and he explained what he had done, saying, “They need money to spend their holidays and do illegal work in a house in the south of France.”

Amid growing suspicions within the bank, one of the employees confirmed that Gaglio requested the money “verbally” because he “knows the customers well”.

The fraud continued until it was discovered in January 2013. In his absence, Hottinger’s managing director compared an original document from a Luxembourg bank with data Gaglio had sent to clients. It turns out that there are multi-million differences in customer accounts.

Gaglio promised to fix it, but he disappeared, before appearing two weeks later and turning himself in to the French police. Meanwhile, one of Hotinger’s partners filed a lawsuit against him.

Moroder Affair

Moroder met Fabian Gaglio in 2001 in Los Angeles, and the Italian musician explained to investigators in Geneva in 2016 that “I had a good feeling when I met him,” stressing that a friend presented him to him as “one of the best managers in the world” and that he was able to offer him returns ranging from Between 15-20%.

The Italian believed in 2012 that he had about $ 17 million in Hottinger Bank, although his account did not exist, and yet he continued to receive large sums of up to 300,000 Swiss francs, which Gaglio was withdrawing from the accounts of other clients.

Within 10 years, Giorgio Moroder earned $5 million, an amount close to his original fortune. When the fraud was discovered, Moroder found himself only owning a beautiful home in Italy, with lots of debt and little money.

VIP service

Until the end of 2012, Fabian Gaglio was behaving at ease, lent his wife more than 300,000 euros, and paid 100,000 euros to his children’s school in Barcelona, ​​where he resides most of the time.

In 2011, the French banker invited 100 of his friends to New Zealand to attend the Rugby World Cup, an invitation funded from his clients’ accounts without their knowledge.

The court documents show that the total of what Gaglio embezzled is 60 million francs, but he only spent 9 million francs on himself and his family, which raised questions about the fate of the rest of the money.

According to audit services firm Deloitte, Gaglio’s clients paid $669,000 in property rentals, $1.7 million in trips and $2.48 million for artwork. Much of the money that Gaglio embezzled was spent on clients for luxury services, which they all believed came from Hottinger Bank.

courting lawyers

In November 2012, Fabian Gaglio became famous in the Lake Como region for his participation in an international conference of private wealth lawyers, which was covered by Hottinger & Partners.

Karen Jones wrote in a report published by “City Wealth” magazine about the conference, “He had charisma, and financed many organizations. He sponsored many events, which helped him gain fame. And because he was a banker in a Swiss bank, no one questioned his reputation.”

By inviting between 20 and 40 prominent lawyers annually to Paris, London and Rome, he was able to expand his network on a global scale and develop his activities.

Fabian Gaglio confessed to the crimes attributed to him, but the trial proceedings took 9 years (Shutterstock)

Hotting consumption decline

Gagello relied on Hottinger Bank to attract the elite interested in wealth management. The bank belongs to an ancient aristocratic family from Zurich who lived in Paris two centuries ago, and Napoleon granted her the title of Baron.

In the 2000s, the bank experienced a severe crisis as a result of a dispute between the brothers Rudolf and Frederic Hotinger over the position of chairman. After the echo of the disputes reached the specialized Swiss authorities, the Federal Authority for the Supervision of Financial Markets imposed a restructuring of the bank in 2009.

To face the crisis, the Hotinger family decided to establish subsidiaries, in which private wealthy people work under the Hotinger brand, and within this framework, the company “Hottinger & Partners” was founded in 2004. Jean-France Ermou de Clermont Tonner and Fabien Gaglio joined as shareholders in the company, but the largest share remained from Hottinger family share. This initiative did not save the family fortunes, and the subsidiary companies eventually caused the bank to go bankrupt.

In 2013, Gaglio’s fraud was discovered, and in 2014, a second fraud appeared at another family business, a case involving the embezzlement of 1.7 million Swiss francs, which is currently being heard in the Federal Criminal Court in Bellinzona.

Trial delayed

Fabian Gaglio admitted to the crimes attributed to him without challenging the decisions of the Public Prosecutor’s Office, but the trial proceedings took 9 years, not 4 or 5 years as in this type of case, according to the writer.

In Luxembourg, and after reviewing some of the accounts of clients, Fabian Gaglio was sentenced to 3 years in prison, of which he served one year. In Geneva, the investigations were suspended for several years.

The Geneva Public Prosecution says that the delay in sentencing is caused by the long list of suspects, the length of time during which Gaglio is suspected of committing his crimes, as well as requests for assistance from the authorities of other countries, and investigations have been disrupted after the outbreak of the Corona virus.

The writer adds that in light of the delay in the procedures and his impunity so far, Gaglio was able to work in the field of organizing parties in the south of France.

The trial is expected to be held between March 21 and 25, and it is expected – according to the writer – that Gaglio will use the seniority of the investigations as a card to reduce the expected sentence against him.



Reference-www.aljazeera.net

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