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- [00:01]
Jessica Mendoza
This is the second of two episodes about Hermes, her Nicola Pwes lost fortune. If you haven't heard episode one, start there. It's already in your feed. One day this summer, reporter Nick Kostoff got a text from a source. Eric Fremont, longtime financial adviser to Nicola Pwech, was dead.
- [00:28]
Nick Kostoff
He apparently had left his chalet one morning near the town of Gstadt in Switzerland, and he'd ridden his electric bike.
- [00:38]
Jessica Mendoza
To the train tracks near a campsite by the railway. Fremont left the path and approached the.
- [00:45]
Nick Kostoff
Tracks and he'd basically been hit by a train and. And that was it.
- [00:55]
Jessica Mendoza
Fremont was 67. Local police are treating the death as a suicide. At the time of his death, Fremond's world was in upheaval. According to court documents and people close to him, his longtime client and friend Nicolas Pues was suing him in two countries for what could be the fraud of the century, stealing a $15 billion fortune. But 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. Welcome to the Journal, our show about money, business and power. I'm Jessica Mendoza. It's Wednesday, November 26th. Today on the show Part two, what we've learned about Nicola Pwesch's lost fortune.
- [02:04]
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- [02:35]
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- [03:09]
Jessica Mendoza
Ever since Nick heard about Pwesha's missing Hermes shares, he's been digging into the heir's relationship with his financial advisor, Eric Fremont. The relationship goes back decades. According to Fremond, the two met in the late 80s. They ran in similar elite social circles. Fremont had married into one of Geneva's most prestigious banking families. And he already knew members of the Hermes clan. Puy would later say that he trusted Fremont implicitly because. Because of his family connections. And when he wanted to relocate to Switzerland, he tapped Fremont to arrange things.
- [03:46]
Nick Kostoff
He's the guy who moved Puesch's shares from bank accounts in France to bank accounts in Switzerland. And then he would invest Pwy's money.
- [03:55]
Jessica Mendoza
Over the years, Fremont would assume responsibility for nearly every aspect of Pues financial life and much more besides.
- [04:03]
Nick Kostoff
You know, it got to the point where Fremont's wealth management firm was basically acting as 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 gonna make your life easier for you. And Pwesh was totally on board with that.
- [04:27]
Jessica Mendoza
Fremond became even more indispensable to Pwesh as Pwes 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 believed Puest had betrayed them and sold his Hermes shares to lvmh. But Puesch consistently denied it, and Fremont backed him up. He also counseled Pwych on how to deal with his fractious family.
- [04:56]
Nick Kostoff
Fremont 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 your family is trying to sue you. They're trying to take your shares away from you.
- [05:09]
Jessica Mendoza
Acquaintances told Nick they rarely saw Pwesh without Fremont. In those years, they were inseparable. But then in 2022, something happened that made Pwech question the integrity of his longtime advisor.
- [05:25]
Nick Kostoff
So that story goes, Nicolas Pues was sitting at home in in Switzerland one day and he was going through his usual requests with Eric Fremont, his financial advisor.
- [05:38]
Jessica Mendoza
One of those requests was about transferring some money. Puy had asked Fremont to send 1 million Swiss francs to his handyman, a guy named Jadiel Boutrac. This might seem like a lot of money, but Puy had grown incredibly close to his handyman, his handyman's wife and their two children.
- [05:56]
Nick Kostoff
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 Fremont says, yeah, it's been done. And Pues says that's strange because he hasn't mentioned it. He hasn't thanked me. That seems a bit strange to me. And Fremont's answer is, oh, well, you know what he's like. He's shy and demure and he doesn't like the tour. He's probably embarrassed in some way, and so that's why he hasn't mentioned it.
- [06:35]
Jessica Mendoza
Puesh and Fremond 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.
- [06:45]
Nick Kostoff
She overheard this conversation and she knew it wasn't true, that they hadn't received a million.
- [06:52]
Jessica Mendoza
Later, she pulled Pwesh aside.
- [06:55]
Nick Kostoff
She tells Pwesh, listen, Fremont'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. And at this point, Nicolas Puesh begins to have doubts.
- [07:13]
Jessica Mendoza
Fremont had been caught in a lie. And if he lied about this, what else might he have lied about?
- [07:20]
Nick Kostoff
Puesch 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.
- [07:31]
Jessica Mendoza
Eventually, Pwesh 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 Pwesh's banks. And in those files, Nick finally found some answers. In the mystery of the missing shares, what did the auditors find?
- [07:52]
Nick Kostoff
Essentially, what they discover is that precious shares, for the most part, 90% of them, were sold during LVMH's raid on Hermes.
- [08:05]
Jessica Mendoza
So Fremont did give up Pues shares to LVMH back in the day.
- [08:10]
Nick Kostoff
Yes, though he always denied it. He always denied it. He denied it to Pwesh, he denied it to Hermes, he denies it to prosecutors. But what this audit finds is more than likely. They were sold to LVMH during its raid on Elmes.
- [08:31]
Jessica Mendoza
By mid 2008, 90% of Puesha Zermes shares were gone, sold by Fremont to LVMH. LVMH's CEO Bernard Arnault didn't know it was Pues shares he was buying. According to people familiar with his thinking, after LVMH's buying spree, Puesch still had 10% of his Hermes stake. But then, in 2013, those shares began to move too.
- [08:59]
Nick Kostoff
What Fremont does is sell them off.
- [09:02]
Jessica Mendoza
In chunks, year by year. Fremont sold off more of pues 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, Fremont pocketed at least a portion of it. He used some of it to buy art.
- [09:24]
Nick Kostoff
He had an incredible huge house in Geneva with an art gallery downstairs. And from what I hear from people who visited his house, you know, 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, you know, a kind of piece of modern art. And he's got also a palazzo near Florence in Italy, where again, packed full of art, public gallery.
- [09:54]
Jessica Mendoza
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.
- [10:00]
Nick Kostoff
Yeah, exactly. I think you've made it.
- [10:04]
Jessica Mendoza
Fremont also made a series of investments. According to the audit, Fremont 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? Like, was there sort of rhyme or reason to the degree that you were able to see?
- [10:33]
Nick Kostoff
Honestly, 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 Fremont 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.
- [10:59]
Jessica Mendoza
What we do know is that by the end of 2021, all of PUES Hermes shares had been sold off. In the lawsuits Pwes filed in Switzerland and France, he accused Fremont 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 Fremont controlled his movements, read his mail, and organized his life, all in what he described as a climate of fear. By the time Nick was reading that testimony, Fremont was dead. But Nick learned that just two weeks before his death, Fremont too had been interviewed by French authorities. And those interview transcripts held some surprises. Foreign.
- [11:58]
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- [12:26]
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- [13:00]
Jessica Mendoza
By this summer, Push's case against Fremont in France was picking up steam and French investigators asked Fremont for an interview. He didn't have to go. Switzerland doesn't extradite its citizens. But he did.
- [13:14]
Nick Kostoff
Fremont travels to Paris. He's in the office of the investigative Magistrate. There was two investigative magistrates. You have Fremont and you have at least three, possibly four of his lawyers. And he basically answers questions for three days.
- [13:32]
Jessica Mendoza
The transcripts from those interviews aren't public, but Nick got an exclusive look at them.
- [13:38]
Nick Kostoff
It's difficult, actually, when you're reading a Fremont transcript because you don't know what's true and what's not true. And there were times when you're reading the transcript where Fremont 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.
- [14:02]
Jessica Mendoza
What was the story that Fremont was telling French investigators?
- [14:06]
Nick Kostoff
So, in a nutshell, the story that Fremont tells investigators is Pwesh was my lover.
- [14:11]
Jessica Mendoza
Whoa. Yeah. Which not what he was saying before?
- [14:15]
Nick Kostoff
No, not what he was saying before. And at this point, the French investigators have already interviewed Pwesh and as they pointed out to Fremont, he did not say that.
- [14:24]
Jessica Mendoza
Investigators would later go back to Pwych and ask whether he and Fremond were lovers.
- [14:29]
Nick Kostoff
Pwesch denied it, but anyway, his story is me and Pues were lovers. Pues loved me, actually. They say, what do you think Nicolas Puesch saw in you? And he says, probably my looks.
- [14:42]
Jessica Mendoza
Which, wow.
- [14:44]
Nick Kostoff
Yeah, probably my looks. The fact I respected him, et cetera, et cetera. And so they go into this a little bit and he paints a picture of him and Pwesh 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. And he paints a picture of Pwesh being very generous towards his lovers. And so he says a lot of the money that he received from Pues were basically gifts that, you know, one lover would give another lover.
- [15:17]
Jessica Mendoza
French investigators also ask Fremont about POY's Hermes shares.
- [15:23]
Nick Kostoff
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, Fremont answers, yes, absolutely I did. And Pues was fully aware, which is.
- [15:43]
Jessica Mendoza
Absolutely not what he had been saying for years and years and years.
- [15:46]
Nick Kostoff
Yeah, which is exactly the opposite, that he's been saying for years and years and years that he never sold precious historic shares.
- [15:53]
Jessica Mendoza
Pwesh denied having any knowledge of the share sales, calling it another lie.
- [15:58]
Nick Kostoff
And 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.
- [16:16]
Jessica Mendoza
Fremont contested the results of the audit, saying he hadn't been consulted and that the report didn't include all of Pwesh's assets. He also denied isolating Pwesh, saying the heir had a rich social life. At the end of the three days of interviews, Fremont seemed satisfied with how things had gone.
- [16:37]
Nick Kostoff
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.
- [16:50]
Jessica Mendoza
Huh?
- [16:51]
Nick Kostoff
It was his version of the truth and, you know, maybe he needed to do it. I. I don't know.
- [16:58]
Jessica Mendoza
Right after Fremont's testimony, French magistrates filed preliminary charges against him for forgery, use of forged documents and aggravated breach of trust. Fremont walked onto the train tracks a week and a half later after his death. Fremont's lawyers described their client as, quote, a man of rare sensitivity, broken by the violence of suspicion. In a statement, Pwych offered condolences to Fremont's family, despite what he called their public and legal disputes. Where does all of this leave Nicola Puesch? Does he have any money left?
- [17:38]
Nick Kostoff
No. I mean, from what he told investigators, he had about a million euros in a 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.
- [18:00]
Jessica Mendoza
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. I can't imagine what that must have felt like. Like you're. You're assuming that you're this extremely rich person and then you look at your bank account and it's all just empty. Essentially, yeah.
- [18:35]
Nick Kostoff
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.
- [18:53]
Jessica Mendoza
Where do you get it?
- [18:54]
Nick Kostoff
Once that's gone, that's gone. Yeah, exactly. You know, someone like Presh, he not only lost his wealth, but. But he also lost a lot of the connections that he had with his family, with the people close to him. From emails and letters from readers, not many people feel sorry for him, but I got to say I do.
- [19:16]
Jessica Mendoza
According to Nick's sources, Nicola Puesch 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 Push'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. That'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 Katherine Brewer, Pia Gadkari, Rachel Humphries, Isabella Japal, Sophie Codner, Ryan Knudson, Matt Kwong, Colin McNulty, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Allen Rodriguez Espinosa, Heather Rogers, Pierce Singhe, Jeevika Verma, Lisa Wang, Catherine Whalen, Tatiana Zemis 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 Singapok. Additional 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.