Spy Scandal Rocks LVMH Luxury Brand - The Anatomy Of Private Intelligence

Former French Spy Chief found guilty of using public intelligence resources to aid LVMH and France’s richest man, Bernard Arnault.

Nothing gets the blood flowing like a little corporate espionage. On 7 March, Bernard Squarcini, the former chief of France’s domestic intelligence service, was convicted of using public resources to benefit a private client, LVMH (Moët Hennessy Louis Vuitton). According to court records, Squarcini used government surveillance assets in 2008 to monitor a cyber cafe in an effort to identify an individual attempting to blackmail LVMH CEO Bernard Arnault and for conducting illegal surveillance against other individuals. Squarcini was sentenced to two years' house arrest, two years' probation, and a 200,000 Euro fine. Spicy.

Bernard Squarcini was conducting private intelligence operations for LVMH. 

The Squarcini-LVMH case sheds light on the lengths luxury brands will go to protect their reputation as well as a window into the common, but little understood, practice of corporate espionage and private intelligence. LVMH is arguably the largest luxury conglomerate and owns several watch brands, including Zenith, TAG Heuer, Hublot, and Bulgari. The conglomerate was also an investor in Hodinkee through its corporate venture capital arm: LVMH Luxury Ventures.

Bernard Squarcini, known in some circles as “The Shark” (Le Squale), is a former police officer who rose to lead France’s domestic intelligence service, Direction Centrale du Renseignement Intérieur (DCRI - later DGSI), from 2008 to 2012. Appointed by then-president Nicolas Sarkozy, he played a significant role in domestic security and counterterrorism during this timeframe. He also appears to be somewhat of a watch guy, and he was photographed wearing an older model Breitling Navitimer chronograph in steel and gold (shocker).

Bernard Squarcini wearing what appears to be a steel & gold Breitling Navitimer. 

While it appears Squarcini’s freelancing may have started when he was head of DCRI, in 2013, he founded Kyrnos, a private intelligence firm, which provided a range of intelligence and investigative services to private corporations. It was at this point that he was reportedly hired by the luxury brand as a “security consultant”—a vague term that can mean many different things.  

Bernard Arnault, the founder, CEO, and chairman of LVMH, is among the world's richest people. 

The client was LVMH and, therefore, also its founder, chairman, CEO, and largest shareholder, Bernard Arnault. With an estimated net worth of $233 billion, he was dubbed Forbes Magazine’s richest person in 2024, ahead of Elon Musk, Jeff Bezos, and Mark Zuckerberg. It is no surprise that Arnault’s watch game is strong, and he owns what is likely a pièce unique (one-of-one) Tiffany-Blue Patek Philippe Nautilus Perpetual Calendar 5740, an even more limited edition of the Patek Philippe Nautilus Tiffany & Co. edition, limited to 170 pieces. Of note, LVMH also owns Tiffany and Co., and the limited release with Patek has traded for over $1 million on the secondary market.

 
Bernard Arnault pictured with son, Frédéric Arnault, who now serves as CEO of LVMH Watches. On Bernard's wrist is his one-of-a-kind Tiffany Patek Philippe reference 5740. Photo Credit: Arnault Instagram.

It is clear that Arnault values the watch companies in the LVMH portfolio and has even appointed his 26-year-old son Frederic Arnault as CEO of TAG Heuer, who was later promoted to CEO of LVMH Watches before the age of 30 (key succession music).

Accusations & Conviction

The conviction and sentencing of the former French spy chief is related to Squarcini’s misuse of public resources to identify a blackmailer targeting Arnault. According to court documents, Squarcini also drew on his influence to collect classified information and spy on activist journalist Francois Ruffin. Ruffin produced a documentary, “Merci Patron!,” which discussed companies' outsourcing of French jobs to foreign labor and was heavily critical of Arnault and LVMH.

While LVMH CEO Arnault's involvement in the illicit activity is denied by the company, it is not a stretch that he was at least potentially aware of Squarcini’s work for LVMH. It is clear that brand and personal reputation are key aspects of a luxury brand's value proposition.

Squarcini at the courthouse in Nov 2024. (Photo Credit: Reuters)

According to press reporting, LVMH previously settled a case involving Squarcini spying on private individuals by paying 10 million euros but was quick to note that this payment did not constitute a judgment against the company or an admission of guilt. Squarcini’s lawyers said they would appeal the verdict.

“Private Intelligence” - Mercenaries for Hire?

In Hollywood, intelligence firms are vilified as mercenaries for hire, willing to work for the highest dollar with nothing off the table. There is some truth to this, but most “private intelligence” companies work for corporations and provide relatively mundane investigations, political risk assessments, and due diligence.

That said, some are willing to operate in the grey/black like Squarcini, and their actions can and do result in convictions and prison sentences. We have touched on this in the past with Daniel Corbett, a Rolex-wearing former SEAL turned mercenary who was arrested in 2017 in Serbia while visiting a source to collect information on a terrorist financier on behalf of an unspecified client.

Daniel Corbett, a former SEAL who was jailed in Serbia.

Former intelligence officers from CIA, British MI6, and other agencies are valued for their skillset and knowledge but also their tolerance for risk and network of contacts. Many former colleagues of mine at CIA have gone into this business, and roles range from benign political risk for large oil companies to more murky work for unspecified clients “based out of” the United Arab Emirates. It can be a dangerous game with real consequences.

While these arrangements are generally kept secret, they do sometimes make international headlines and can have a significant impact on geopolitics. The controversial Trump-Russia “Steele dossier” opposition report compiled by Fusion GPS and former MI6 officer Christopher Steele is one recent example. Separately, according to press reports, Qatar hired former CIA officers (Global Risk Advisors) to influence their bid for the World Cup. Israeli firms, notably NSO Group and Black Cube, have (allegedly) been used by private entities and governments to collect damaging information about individuals and human rights activists. The line between legal research and illegal practices can often be blurred and open to interpretation.

Christopher Steele, a former British Secret Intelligence Service officer and founder of Orbis Business Intelligence.

Espionage is illegal in every country, and intelligence officers from CIA and other services are trained to lie, cheat, and steal on behalf of their government. As government officials, intelligence officers are mostly protected from third country prosecution through diplomatic immunity, but this goes away once they leave the government. After a life of operating in the grey area, some practitioners find it difficult to make this transition to the private sector where laws and norms must be adhered to. 

The world is not all flowers and rainbows. To quote the German philosopher Friedrich Nietzsche:

“Whoever fights monsters should see to it that in the process he does not become a monster, for when you look into an abyss, the abyss also looks into you.”

If you enjoyed this article, please consider signing up for our weekly free newsletter for further updates HERE.

Read Next: Watches of the Middle East and the Israeli-Palestinian Conflict

This article has been reviewed by the CIA's Prepublication Classification Review Board to prevent the disclosure of classified information.