The Case of the Missing $15 Billion Fortune: Part 2

0:00This is the second of two episodes about Hermes-air Nicolas Poesch's lost fortune. If you haven't heard episode one, start there. It's already in your feed.

0:16One day this summer, reporter Nick Kostoff got a text from a source. Eric Freymond, longtime financial advisor to Nicola Puesch, was dead. He apparently had left his chalet one morning near the town of Kestadt in Switzerland, and he'd ridden his electric bike to the train tracks. Near a campsite by the railway, Frémont left the path and approached the tracks. And he'd basically been hit by a train. And that was it. Frémont was 67. Local police are treating the death as a suicide. At the time of his death, Frémont's world was in upheaval, according to court documents and people close to him. His longtime client and friend, Nicolas Pueche, was suing him in two countries for what could be the fraud of the century, stealing a$15 billion fortune.

1:20But was the allegation true? Nick had been digging into that question long before Fraymond's apparent suicide, and he kept digging. Now, finally, he has some answers.

1:37Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Wednesday, November 26th.

1:50Today on the show, part two, what we've learned about Nicola Puesa's lost fortune.

2:09Ever since Nick heard about Puesha's missing Hermes shares, he's been digging into the heir's relationship with his financial advisor, Eric Fraymond. The relationship goes back decades. According to Fraymond, the two met in the late 80s. They ran in similar elite social circles. Fraymond had married into one of Geneva's most prestigious banking families. And he already knew members of the Hermes clan. Puesch would later say that he trusted Fraymond implicitly because of his family connections. And when he wanted to relocate to Switzerland, he tapped Fraymond to arrange things. He's the guy who moved Puesch's shares from bank accounts in France to bank accounts in Switzerland.

2:52And then he would invest Puesch's money. Over the years, Fraymond would assume responsibility for nearly every aspect of Puesch's financial life. And much more besides. You know, it got to the point where Frémont's wealth management firm was basically acting as Poche's secretariat. So they would open his letters, they would answer his phone calls, they would, you know, sign his checks or whatever. And the idea was just like, listen, we're just going to make your life easier for you. And Poche was totally on board with that.

3:27Fraymond became even more indispensable to Puesh as Puesh's relationship with his family broke down. A major turning point was in 2010 when LVMH boss Bernard Arnault revealed that he'd built up a massive secret stake in Hermes. Many Hermes family members believe Puesh had betrayed them and sold his Hermes shares to LVMH. But Puesh consistently denied it And Frémont backed him up. He also counseled Poche on how to deal with his fractious family. Frémont is saying, listen, be very careful when your family calls. If they call, you need to let me know. You shouldn't answer your phone because then they can track you.

4:05Your family is trying to sue you. They're trying to take your shares away from you. Acquaintances told Nick they rarely saw Poche without Frémont in those years. They were inseparable. But then, in 2022, something happened that made Pouche question the integrity of his longtime advisor. So that story goes, Nicolas Pouche was sitting at home in Ferre, in Switzerland, one day, and he was going through his usual requests with Eric Freymont, his financial advisor. One of those requests was about transferring some money. Puach had asked Frémont to send one million Swiss francs to his handyman, a guy named Jadil Boutrak.

4:48This might seem like a lot of money, but Puach had grown incredibly close to his handyman, his handyman's wife, and their two children. He considered them like his adopted family, and he wanted them to have more money than just the kind of salary he paid them each month. And obviously a million for somebody who has a fortune of 15 billion is not that much. It should be something that's done pretty quickly. And Frémont says, yeah, it's been done. And Poche says, that's strange because he hasn't mentioned it. He hasn't thanked me. That seems a bit strange to me. And Frémont's answer is, oh, well, you know what he's like.

5:26He's shy and demure and he doesn't like to talk. He's probably embarrassed in some way. And so that's why he hasn't mentioned it. Poche and Frémont didn't know it. But there was someone else listening to this conversation. the handyman's wife, Maria Paz. She happened to be in the TV room next door. She overheard this conversation, and she knew it wasn't true, that they hadn't received the million. Later, she pulled Poche aside. She tells Poche, listen, Frement's not telling the truth here. We haven't received the million that you sent us, or that he says he sent us. He's not telling the truth.

6:06And at this point, Nicolas Poche begins to have doubts.

6:14Fraymond had been caught in a lie. And if he lied about this, what else might he have lied about? Puach talks about it to a former French ambassador who he's good friends with. And the ambassador tells him, listen, you should do an audit. Do an audit if you have some doubts. Eventually, Puach would bring on a legal team and a consulting firm to conduct a full review of his finances. Nick viewed the results of that audit, along with some of the correspondence from Puesh's banks. And in those files, Nick finally found some answers in the mystery of the missing shares. What did the auditors find?

6:52Essentially what they discover is that Puesh's shares, for the most part, 90 % of them were sold during LVMH's raid on Elmess. So, Fremont did give up Puesch's shares to LVMH back in the day. Yes, though he always denied it. He always denied it. He denied it to Puesch, he denied it to Almes, he denies it to prosecutors. But what this audit finds is more than likely they were sold to LVMH during its raid on Almes. By mid-2008, 90 % of Puesche's Hermes shares were gone, sold by Freymont to LVMH. LVMH's CEO, Bernard Arnault, didn't know it was Puesche's shares he was buying, according to people familiar with his thinking.

7:49After LVMH's buying spree, Puesche still had 10 % of his Hermes stake. But then, in 2013, those shares began to move too. What Frémont does is sell them off in chunks. Year by year, Frémont sold off more of Pouche's shares, more of his fortune. It's often unclear just who he sold the shares to and what he did with the money. But based on the audit results and documents viewed by French investigators, Frémont pocketed at least a portion of it. He used some of it to buy art. He had an incredible, huge house in Geneva with an art gallery downstairs. And from what I hear from people who visited his house, if they sat at his table, they would pick up what they thought was a salt or pepper shaker and it would turn out to be a kind of piece of modern art.

8:44And he's got also a palazzo near Florence in Italy, where, again, packed full of our public gallery. I mean, look, once you stop calling a property a house or a mansion and start calling it a palazzo, we're talking about a different level of wealth here. Yeah, exactly. I think you've made it. Frayman also made a series of investments. According to the audit, Frayman sank precious fortune into all kinds of things, like a Czech film company and hydrogen projects in West Africa and stock trades in the biotech company Moderna. You know, there are the properties that sort of make sense to me, but these investments, how do you make sense of them?

9:28Like, was there sort of rhyme or reason to the degree that you were able to see?

9:36Honestly, no. I think there still needs to be some following of the money that needs to happen to try and find who benefited from this. Where did this money end up? And also why? Why was Frémont sending all of this money to where he was sending it? What was the reason? I've heard a million theories, none of them completely confirmed and none of them completely satisfactory. What we do know is that by the end of 2021, all of Poche's Hermes shares had been sold off.

10:08In the lawsuits Poche filed in Switzerland and France, he accused Frémont of stripping him of his fortune. Testifying to French investigators, he described his former advisor as a, quote, con man, even a gangster, who isolated him from his family. He said Frémont controlled his movements, read his mail, and organized his life, all in what he described as a, quote, climate of fear. By the time Nick was reading that testimony, Frémont was dead. But Nick learned that just two weeks before his death, Frémont, too, had been interviewed by French authorities. And those interview transcripts held some surprises.

11:03By this summer, Poche's case against Frémont in France was picking up steam. And French investigators asked Frémont for an interview. He didn't have to go. Switzerland doesn't extradite its citizens. But he did. Frémont travels to Paris. He's in the office of the investigative magistrate. There was two investigative magistrates. You have Frémont and you have at least three, possibly four of his lawyers. And he basically answers questions for three days. The transcripts from those interviews aren't public, but Nick got an exclusive look at them. It's difficult, actually, when you're reading a Frémont transcript because you don't know what's true and what's not true.

11:47And there were times when you're reading the transcript where Frémont says something, and then they take a break, and then he comes back from the break and he says, actually, I said this. I wasn't completely open or I wasn't completely honest with you. What I should have said was this. What was the story that Frémont was telling French investigators? So in a nutshell, the story that Frémont tells investigators is, Poche was my lover. Whoa! Which, yeah, which... Not what he was saying before. No, not what he was saying before. And at this point, the French investigators have already interviewed Poche.

12:24And as they pointed out to Frémont, he did not say that. Investigators would later go back to Poche and ask whether he and Frémont were lovers. Poche denied it. But anyway, his story is me and Puesh were lovers. Puesh loved me. Actually, they say, what do you think Nicolas Puesh saw in you? And he says, probably my looks, which. Wow. Wow. Yeah, probably my looks, the fact I respected him, etc., etc. And so they go into this a little bit and he paints a picture of him and Puesh basically living this life where they're meeting up in London, they're meeting up in Switzerland, they're meeting up in Spain, they're meeting up at various five-star hotels across the world.

13:04And he paints a picture of Poche being very generous towards his lovers. And so he says a lot of the money that he received from Poche were basically gifts that, you know, one lover would give another lover.

13:21French investigators also ask Frémont about Poche's Hermès shares. So he was asked a very specific question by investigators, which was, we think you sold them to Bernard Arnault and LVMH, and we think you did this through an equity swap with this bank. And at this point, Frémont answers, yes, absolutely, I did. And Puesch was fully aware. Which is absolutely not what he had been saying for years and years and years. Yeah, which is exactly the opposite that he's been saying for years and years and years, that he never sold Puesch's historic shares. Puesch denied having any knowledge of the share sales, calling it another lie.

14:02And so, yeah, you have the impression of reading a transcript of somebody who is spinning a story, and for years he could spin a story, but the evidence has just piled up to such an extent that he's been boxed in. Fraymond contested the results of the audit, saying he hadn't been consulted and that the report didn't include all of Puesha's assets. He also denied isolating Puesh, saying the heir had a rich social life. At the end of the three days of interviews, Frémant seemed satisfied with how things had gone. He says at the end, you know, that this whole thing has had a disastrous impact on his mental health and on his relationships and stuff like that, but that he's really thankful that he could come for three days and explain himself and give his side of the story.

14:54Huh. It was his version of the truth, and, you know, maybe he needed to do it. I don't know. Right after Frémont's testimony, French magistrates filed preliminary charges against him for forgery, use of forged documents, and aggravated breach of trust. Frémont walked onto the train tracks a week and a half later. After his death, Frémont's lawyers described their client as, quote, a man of rare sensitivity, broken by the violence of suspicion. In a statement, Puig offered condolences to Frémont's family, despite what he called their public and legal disputes. Where does all of this leave Nicolas Puig?

15:38Does he have any money left? No, I mean, from what he told investigators, He had about a million euros in an Hermes real estate unit. And apart from that, he says he has zero. He's trying to recover some of the investments, some of the shares. But at the moment, he's being helped by members of the Hermes family and other people close to him. Pues has sizable expenses, multiple properties, staff, legal fees. And he's still discovering new losses. Earlier this year, he found out that his home in Switzerland, the one that Nick saw, isn't even his anymore. It belongs to his foundation. He told French investigators, I must have signed documents.

16:28I can't imagine what that must have felt like. Like you're assuming that you're this extremely rich person and then you look at your bank accounts and it's all just empty, essentially. Yeah, I think it must be unbelievably difficult to accept and to process. And I think, unfortunately, I don't know that there's any coming back from it. Like, we've all lost things that maybe we can replace. I don't know that you can replace a 15 billion fortune. Where do you get it? Once that's gone, that's gone. Yeah, exactly. You know, someone like Puesh, he not only lost his wealth, but he also lost a lot of the connections that he had with his family, with the people close to him.

17:11From emails and letters from readers, not many people feel sorry for him. But I've got to say, I do.

17:19According to Nick's sources, Nicola Puesh took a trip to London recently. Not long ago, Hermes' biggest shareholder, one of the richest men in Europe, would have flown private. But that wasn't Quesh's reality anymore. Instead, the Hermes Air was flying EasyJet, the famously low-budget European carrier. He squeezed into the middle seat, settled in, and took off.

17:50That's all for today, Wednesday, November 26. The Journal is a co-production of Spotify and The Wall Street Journal. The show is made by Catherine Brewer, Pia Gadkari, Rachel Humphries, Isabella Jepal, Sophie Kottner, Ryan Knudsen, Matt Kwong, Colin McNulty, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alan Rodriguez Espinosa, Heather Rogers, Pierce Singhe, Jeevika Verma, Lisa Wang, Catherine Whelan, Tatiana Zamis, and me, Jessica Mendoza. Our engineers are Griffin Tanner, Nathan Singapak, and Peter Leonard. Our theme music is by So Wiley and was remixed by Nathan Singapak.

18:31Additional music this week from Peter Leonard, Bobby Lord, So Wiley, and Blue Dot Sessions. Fact-checking this week by Kate Gallagher and Najwa Jamal. Thanks for listening, and Happy Thanksgiving! We'll be back with a new episode on Monday.

18:53Thank you.