A strange bank robbery

When €7m vanished from his account, a tech entrepreneur found himself in a byzantine criminal plot involving some dubious art and the man who created disco.

Text by: Ingo Malcher

Original text here.

In recent years Michael Kleemann has done some extraordinary things with his money. Like buying a nuclear fallout shelter. And paying for a three metre-high rugby-themed sculpture in New Zealand. But the strangest part of it was that Kleemann found he had unwittingly also transferred €2.2m (£1.9m) to the account of the Oscar-winning composer Giorgio Moroder.

Kleemann is not in the least afraid of nuclear war breaking out. And rugby is not his cup of tea, either. Nor does he like Moroder’s music. Even more remarkably, Kleemann was completely in the dark about most of the transactions until he found out about them in February 2013.

A perfect crime? Not quite. Careless mistakes were made. Signatures were forged and names spelled incorrectly. Money was sent to relatives. But the biggest mistake was that the thieves chose the wrong man when they picked on Kleemann. He is determined to track down those responsible and see them in court. And he is ready to go to great lengths to get his money back.

Kleemann has already spent €1m on lawyers and private investigators in Switzerland, Italy and France. He can afford what it takes because he still has money at another bank. And he feels he has no choice but to afford it since the public prosecutor in Geneva appears to be totally overwhelmed by the amount of material in the case.

Kleemann’s private investigators have sifted through nearly 100,000 pages of files. Thanks to their work in one of the most spectacular cases of financial crime in Switzerland, there is now a trail, but so far there are no more than suspicions.

It all started when Kleemann found himself with a load of money for the first time in his life. In 2008 he sold his internet firm for €80m, sharing the proceeds with a partner, employees and investors. He has no plans to spend the rest of his life relaxing as a man of private means, but he does want to drop down a few gears. After paying the taxes on his share, he set up a firm he could hide behind. After all, there's no need for people to know that he is a millionaire several times over. He put part of his money in the Hottinger Bank in Geneva. On 4 June 2009 his balance stood at €7,754,025.75.

Kleemann’s new life felt good. He continued with his modest lifestyle, happiest wearing trainers, jeans and a T-shirt. He pottered about with encryption technology, but only as a hobby. He felt he was in good hands with Hottinger, mainly thanks to his financial adviser, Fabien Gaglio. A Frenchman, Gaglio had worked for Schroders and Rothschild – big names in the financial sector, an industry Kleemann knew little about.

He became friends with Gaglio and they were soon on first-name terms, meeting up in London, Barcelona and Nice. Their wives also got on well. In the process a minor but crucial detail escaped Kleemann’s attention: he was not actually a client of Hottinger & Cie, which is only the depositary bank. He was a client of the asset management firm Hottinger & Partners, of which Gaglio and his partner, Jean-François de Clermont-Tonnerre, each owned 30% of the shares. It was an easy mistake to make: the company had the same address as the bank and emails were sent out from the bank addresses bearing the signature: “Hottinger & Partners S.A.; Member of the Hottinger Group, Bankers since 1786.” The distinction was lost on Kleemann.

Between 2009 and 2012 nearly €7.3m vanished from Kleemann’s account at the exclusive Swiss private bank Hottinger & Cie. He was not the only victim. A total of nearly €80m disappeared from the accounts of Hottinger customers without anybody admitting to have noticed anything untoward. The alleged culprit is still at large, living in a villa near Cannes. The bank is currently being wound up by the Swiss financial markets authority after being at risk of being declared insolvent owing to claims for compensation by cheated customers. The case shows how astonishingly easy it is to rob a bank without a gun or a mask.

Eyes wide shut

Why should that have bothered him? His money was busy making money. His €7.7m would soon be €8.5m, and there were the bank statements to prove it. When Kleemann fell ill, Gaglio was there, visiting him at his mother’s house in the provinces in Germany, wanting to see how he was doing.

Then, early in 2013, Gaglio was suddenly unavailable. It was odd. He normally got in touch very quickly. All at once, there was no response to emails or phone calls. Then, on 1 February 2013, one of Gaglio’s colleagues contacted Kleemann. She was nervous, but then came out with it: Gaglio had disappeared. He had been in difficulties for some time.

Kleemann was worried, not about his money but about his friend, and enquired further. The woman said Hottinger & Cie would send him bank statements – the ones Kleemann had been receiving were forgeries. What Kleemann saw was unbelievable: the balance in his account was just over €457,000. Nearly €7.3m of his money was missing.

The genuine bank statements revealed where his fortune had gone. Most of the names meant nothing to him. Asia Universal Trading, Entwise LCC, Etra Trading. Some sculpture he was supposed to have bought from a French artist, Stéphane Cipre; payments to a travel agent, a car dealer, a hotel. At first he was convinced the whole matter could be easily cleared up. But it gradually dawned on him that he was the victim of a particularly ingenious bank robbery, one apparently carried out by his own adviser and friend, Fabien Gaglio. Confronted with this accusation, Gaglio’s lawyer replied that his client did not wish to comment. And neither had Gaglio any desire to respond to further questions on the case.

Kleemann still does not know what really happened. But studying his bank statements he kept coming across the name of the legendary Italian record producer Giorgio Moroder. Bizarrely, the disco pioneer and Oscar-winning film composer topped the list of recipients of Kleemann’s money – 15 transactions between September 2010 and November 2012 totalling nearly €2.2m.

The money was paid into Moroder’s accounts at Raiffeisen Bank in Castelrotto, South Tyrol, at the City National Bank in Beverly Hills, California, and at the Credit Suisse in Zurich. In most cases the purpose of the transfer was given as “loan”. When summoned and questioned as a witness by prosecutors during the investigation in Geneva, Moroder said he thought these payments were profits from investments. He claimed to have given Gaglio money to invest for him. Asked if it had not bothered him that the transfers were ostensibly loans, Moroder said he had no recollection.

Brand eins sent Moroder questions on the transactions, which neither he nor his lawyer in Geneva answered. Moroder’s agent in Los Angeles confirmed that he would not answer the questions.

In some cases Kleemann’s money can be tracked through bank records. On 10 August 2010 a woman on Gaglio’s staff emailed Hottinger Bank asking for $300,000 (£192,000) to be transferred to Moroder and debited from Kleemann’s firm. She gave an assurance that Kleemann’s signature would be supplied later. And it was indeed supplied – one letter in his signature was missing, but apparently no one saw that as a cause for concern. Neither did it seem to bother anybody that Kleemann’s name was written differently – this time correctly – in a later transfer.

There was a total failure of all transaction management controls at Hottinger Bank. Otherwise, how could cash have been withdrawn? One time it was €9,045, then €10,050 and €20,100 on another occasion. One very striking transfer took place on 8 November 2010 to a firm called Asia Universal Trading in Hong Kong, with a banking link to Barclays in London. The handwritten order by a colleague of Gaglio, sent by fax, indicated that the money was to buy a nuclear fallout shelter. The contract of purchase could unfortunately not be submitted because the client was travelling and could not be contacted. To allay any fears, it added: “According to our client profile and knowledge, this kind of investment matches the personality of the client.” This casual sentence was enough for the bank to transfer $1m.

Such transactions leave a trail. Investigators suspected the case was about more than simple fraud. And that several people were behind it. The fallout shelter was never bought. Instead the money went to a firm called Saturn Trade Ltd, based offshore in the British Virgin Islands and with a bank account in Latvia. Saturn Trade was registered by a firm that had already contravened the British Virgin Islands money-laundering laws several times. But the $1m did not stay there long. It was transferred once again via Luxembourg to a firm in Milan making leather goods for luxury brands. One of this firm’s partners was related to Gaglio.

It was not the only family connection to Gaglio in this puzzle. More than €600,000 was paid from Kleemann’s account to a private equity firm that in turn invested the money in a company on the Cote d’Azur making solar-power systems. Fanny Gaglio, Fabien’s wife, holds 25% of the shares in the firm. Until 2015 another 25% was held by Marie-Laure de Clermont-Tonnerre, wife of Jean-François de Clermont-Tonnerre, Gaglio's partner at Hottinger. Very practically, he together with Gaglio is also a beneficial owner of the private equity firm which the money passed through. None of those named has answered questions about the transactions.

Another question that remains unanswered is why Fabien Gaglio distributed the money so generously: almost $1m to the firm of a relative and about €600,000 to an investment firm of his wife’s, and about €300,000 to the wife of a former top executive of Silvio Berlusconi's business empire. Why did they get all this money? All requests for answers have been met with a blanket refusal to respond by all those involved.
A round-the-world trip

There are several investigating authorities interested in hearing an answer to the question of why. The public prosecutor in Geneva has Gaglio in his sights on suspicion of committing fraud, forgery and money laundering. In Bolzano, South Tyrol, the public prosecutor is investigating Moroder. And in Rome two senators are actually demanding a committee of inquiry because so many Italians are embroiled in the case. One of the senators is Mario Michele Giarrusso. “The case is remarkable,” he says, “because the perpetrators succeeded in exploiting the complexity of the international finance system and in transferring millions of euros through several countries and banks. But the money also passed through Italy and it can be assumed that some of those involved – just voluntarily or in order to make some money – made their bank accounts available and in the process violated Italy’s laws on money laundering.”

Investigators also want to find out more about a business that Gaglio operated alongside his job with Hottinger & Partners: a company network with one firm at its heart, which Gaglio called Glendale Portfolio Inc, and through which money was transferred back and forth. This construction posed quite a few challenges for Kleemann’s private investigators. After almost a year of following paper trails across a dozen of countries, they became convinced that about €250m had passed through this network between 2003 and 2013.

The sense and purpose of the transactions are unclear. Money was paid into accounts of firms such as Ragetti Financial Corporation. Then it was forwarded to Glendale’s account at UBS in Zurich and finally finished up somewhere in the world at brass-plate companies bearing meaningless names in places such as Belize. Moroder also paid money into Glendale and got some out. Also Jean-François de Clermont-Tonnerre received money from Glendale. The question as to what was the purpose of doing business with Glendale Portfolio is one they do not answer.

Yet even a company like Glendale Portfolio is subject to the economic laws of the business world, the first rule of which is that you cannot spend more than you earn. From 2008 until 2011 more money disappeared from the network than came into it. Did Hottinger clients such as Kleemann have to foot the bill? The prosecutors in Geneva and Bolzano are checking whether this is an explanation for Kleemann’s losses. So far no charges in relation to the case have been brought forward against anybody.

In Geneva the public prosecutor requested Gaglio’s extradition but France rejected the application. In Luxemburg in 2016 in a different case he was sentenced to a term in prison for fraud and embezzlement. Gaglio has filed an appeal. Since November 2014 he is back in the south of France. He has often been summoned to Geneva for questioning, where investigations into his affairs are continuing. As he has been guaranteed safe conduct, he can return home to France.

Without having anything to fear, he admits during hours of interrogation that he siphoned off money. He admits instructing staff to forge signatures. And he repeats once more that there is nothing left of the booty. So what do you live on, the investigators ask. He answers that he is supported by his parents. Pretty generous parents it would appear. Gaglio lives in a small town near Cannes in a villa he rents. He claims to have no property of his own.
Presents for friendship

Gaglio’s former partner, Jean-François de Clermont-Tonnerre, is back in business as an asset manager, together with his wife. They have put together a network of firms extending from Malta via Luxembourg to Geneva.

Feeling cheated, Giorgio Moroder has now brought charges against Gaglio. After getting a career reboot from working with the French duo Daft Punk in 2013, the 77-year-old Moroder is now touring the world as a DJ and collaborating with musicians such as Kylie Minogue and Britney Spears. The prosecutors would like to know why he doesn’t simply pay back the money he is not entitled to. Moroder’s reply is that he has spent €2.2m on music productions, lawyers and other things.

And Kleemann? He was recently on holiday in New Zealand. He has friends there and had long cherished plans to visit them. In Wellington he went to see the sculpture he had unknowingly paid for. It stands by the harbour and consists of a wall of words with two rugby players in a scrum up against it. It was not exactly cheap. Cipre, the artist, pocketed about €120,000 for this work, which was presented to the New Zealand Rugby during the 2011 Rugby World Cup, by a group of French Rugby lovers. The donation was organised by a firm called The Rugby Lovers LLC. There was a little ceremony and photos for the press. The former captain of the French national rugby team, Jeff Tordo, was also present with his group Les Amoureux du Rugby.

The sculpture’s wall of words includes disrespect, indiscipline, selfishness, drugs, cheating, racism and individualism. The work is entitled Les Contre-Valeurs du Rugby – the opposites of rugby’s values. Kleemann had himself photographed with his wife in front of it as a souvenir. He had no desire to take the sculpture home with him. He’s not all that interested in art. And he’d rather have his money back.