by Libby Howard
“I’m afraid I don’t have too much news to give you yet, Mrs. Thompson,” I said in my kindest voice. Then I went on to outline everything I’d done so far, what I’d discovered, and what my next steps were as she listened in silence.
“Thank you.”
I waited, but that was her only response.
“Are you okay?” I resisted the urge to reach out and touch her arm.
She nodded. “It’s just…. Maybe I’m doing the wrong thing. Maybe I shouldn’t be divorcing Spence. I loved him. I still love him.”
I took a deep breath, wishing that J.T. had given me some guidance on how to handle this particular situation. Unfortunately, all I had to go on was my own sympathy for someone who was clearly going through a marital crisis.
“If you still love him, if you think there’s something worth saving in your marriage, then talk to your husband,” I urged her. “I’ve found nothing so far to indicate that he might be having an affair, and you said that was your main concern. Talk to him. Maybe the two of you could try counseling or something.”
She dabbed carefully under her eyes with a napkin. “Another woman would be unforgivable, but there are things about Spencer I blindly ignored when we got married. I loved him, and just pretended those aspects of his personality didn’t exist. I fooled myself into thinking that his ambition and drive were admirable career traits, but in reality, I think they’re all consuming. Over the last five years I’ve seen Spencer become obsessed with making money. So obsessed that I think he might do something illegal or unethical if he thought it would make him rich.”
I sucked in a breath. “Is that why you’re looking for hidden assets? Do you think maybe he’s running a scam or embezzling, or something like that?”
Marissa shook her head. “I don’t have any proof of that, but Spencer has grown distant the last few years. He’s distracted. And I’m pretty sure it’s not his job at Fullbright and Mason, either. It’s either another woman, or he’s got some money-making scheme, and I’m not seeing any huge deposits into our checking accounts.”
“Have you talked to him?” I asked, because if Eli had acted this way toward me, we would have been sitting down at the kitchen table for a long chat.
“Not about another woman. That would just make me look desperate. I did mention to him that he seemed to be working lots of odd hours and never had time to go to dinner or do anything with our friends, and he blew up at me. He accused me of nagging him and not being supportive of his career goals. After that, I didn’t bring it up again.”
“What exactly do you want to happen here, Mrs. Thompson?” I asked, again in my most gentle voice.
Her laugh was sharp with bitterness. “I’d like to go back to blissful ignorance, to a time where Spence and I went to dinner with friends, or to the club, or dancing. But that’s not going to happen, so instead I want to know what’s going on. I want to know if he has a mistress or is doing something illegal. If he’s gambling or has some side thing going on that he’s keeping from me.”
“And if he does?” I asked.
Her mouth hardened into a grim line. “Then I’m going to take that bastard for every cent I can.”
Chapter 5
Violet sighed and stretched, shuffling the papers on her lap and setting them beside the tablet she’d been typing away at.
“Find anything?” I asked, looking up from my own stack of bank and credit card statements. We had taken over the entire dining room table, banishing Judge Beck to his room tonight. I’d made pork chops and roasted brussel sprouts for dinner tonight and invited the girl to join us as an added bonus to the fifty dollars I’d promised her. Madison had been thrilled, asking Violet all about her job as well as how Peony was doing at the detention center. That had made for a somewhat awkward dinner. Violet’s younger sister had finally gotten her plea deal, but it hadn’t been what she, and I, had been hoping for. The girl would spend the next year at the detention center, missing her entire junior year of high school. I guess it was better than being tried as an adult for second degree murder, though.
“I might have found something.” Violet shuffled through the papers and handed one to me. “There’s this. The abbreviation is for a property tax payment, but the amount is way less than what the tax is on the Thompsons’ McMansion in Pinedale. That’s paid in full through their mortgage escrow, so what got taken out of their checking account isn’t a partial payment. I suspect it’s not on their primary residence, but on another property.”
I frowned. “He bought a house on the side?”
“Maybe. I tried to trace the reference number on the bank statement, but it’s not coming up. I can’t find him listed as the owner on any other properties, so either he bought them under an LLC or he’s paying someone else’s property taxes. We get that sometimes, especially with elderly parents.”
I made a quick note—check family’s real estate in county, check business entities and LLCs in state with Spencer as a forming party.
“Is there any other way to track it down?” I asked. “Like searching by the amount? Will it narrow down a list of properties and owners if we do that?”
“Not really. Sometimes people pay the annual amount, and sometimes they pay quarterly or bi-annually. If I search county property tax by annual, bi-annual, and quarterly, that’s going to end up being a huge list to wade through.”
I tapped my pen against my lips. “Assuming it’s not a family member he’s helping out, and he decided to buy something either for rentals or for a mistress, where in the heck would he get the money for a down payment? And how is he making the mortgage payments?” I held up a page of the bank statements. “That two-hundred-dollar difference in his paycheck isn’t enough to cover a mortgage, and I’m not seeing anything on here besides the payments for the property he owns with his wife.”
“If he bought it outright, then there wouldn’t be an escrow for taxes and insurance,” Violet offered. “He’d need to pay that himself each year.”
I snorted. “I can’t see where he had the money for a down payment, let alone buying something outright.”
“You’d be surprised. Elderly people who don’t have close family forget to pay their taxes or mortgage, or they have a medical emergency and can no longer afford the house. I’ve seen homes get snatched up for a few thousand because the ninety-year-old widow living there can’t afford both her prescription medicines and the tiny mortgage payment. People fall behind, and the next thing they know, the property is at a tax or foreclosure auction.”
Now that made me mad. “Isn’t there some sort of charity that can jump in and help?” I asked, outraged at the thought of some ninety-year-old widow being evicted because she couldn’t pay the measly two grand left on her mortgage.
“Yeah, but they need to apply for it. They need to speak up. It’s not a common thing,” she told me, “but it does happen sometimes. If it’s a property tax problem and they’re elderly, the county has programs available. We also refer people to Humble House. It’s a non-profit foundation that buys out people’s mortgages. It’s kind of a reverse mortgage deal from what I’ve seen.”
I took a breath. “Okay, so we’re thinking that this guy siphoned eight or nine thousand from his paycheck into some secret savings account, then bought a house on the cheap at auction?”
“It could be. The tax payment was three months ago.” Violet looked up. “You know, this ‘savings plan’ could have started five years ago, and the two-hundred-dollar difference you noted is an increase from what he’d been siphoning off before. If that’s the case, he could have accumulated twenty or thirty thousand. That’s definitely enough to pick up a distressed property at a tax or foreclosure sale.”
I was ready to pull my hair out over this. “How far do I seriously need to go back on this?” I asked her, already wondering how I was going to spin this to Marissa.
“Five, ten years?” She shrugged. “Ask the wife. They usually have a good nose for when this sort of thing started. I know my mom can
pinpoint to the day when dad starts drinking or gambling again.”
“She said things started going bad about five years ago.” I rubbed between my eyebrows at the headache that was threatening to form. “So, twenty grand would buy him a house? Then what? He’d have rental income and a property to manage? Seems like a lot of work for very little gain, if you ask me.”
Violet shrugged again. “Maybe he’s one of those flippers.”
“Pardon?” I was envisioning the dolphin from that show I’d watched as a kid.
“Flippers. Or tax lien sharks. Either one.”
“I have no idea what either of those things mean,” I told the girl.
“They’re get-rich-quick schemes. It was a lot more popular about ten years back. People would buy up houses at tax and foreclosure auctions super cheap, throw a few thousand into some cosmetic repairs, then sell them for a big profit. Back when the market crashed, sometimes a house would be underwater, and the lender would retain the title at the auction because it was worth more on their books than they could get on the market. The balance sheet can only take so many hits, you know? So, if they couldn’t buy something cheap enough at foreclosure auction to flip, then these get-rich folks would haunt the tax sales instead. Mortgage companies are swamped and can’t always keep up. Sometimes back taxes slip through the cracks and if some enterprising person buys the tax lien, they can basically hold the mortgage company hostage for double or triple what they paid. House can’t be sold until someone pays off the lien, so it’s really just a waiting game.”
“English please,” I teased. “I never learned accountant-speak in college, but I’m a former journalist. I learn fast.”
She laughed. “Okay. There are a few ways people lose their homes. Most of the time it’s due to job loss or unexpected medical costs or some family crisis. The family sometimes knows it’s coming. They put their house on the market and sell it fast. The mortgage bankers work with them because companies really don’t want to have to go through the expense of foreclosing on a house, and they really don’t want to own it and deal with the upkeep or the sale, all while it’s vacant and getting trashed by neighborhood kids.”
“Got it.”
“Now that doesn’t work when there’s a housing slump, like the crash ten years ago. Suddenly people need to unload their homes, and they can’t because that twenty-percent equity they had is gone. Sometimes the house is worth fifty or sixty thousand less than the mortgage. That’s when it goes to auction and in those cases, the lender winds up holding the bag.”
“Because the mortgage company doesn’t want to sell it for too far under what they have invested in the house. And a private investor can’t buy it cheap enough to make any money on the resale.”
“Exactly. The lender is willing to lose a good bit, especially in a crash, because they don’t want to have to manage thousands of properties that can’t sell for any more than half the lien amount. They’ll take the loss at auction at close to fair market value, but not at flipper prices.”
This was fascinating. I pushed the papers aside and leaned over the table. “Go on.”
“There are those cases like I said, where someone is elderly and doesn’t owe much on their mortgage, but just can’t pay it. Those are the houses flippers snatch up at auction for ten or twenty thousand. That and they like to read the obituaries and approach people who inherited houses as part of an estate. Lots of times those people just want to unload the house for as little time and effort as possible. The flipper gets a lowball appraisal, offers eighty-percent cash at closing, then flips the property.”
“Eighty percent?” I wrinkled my nose. “That doesn’t leave much profit, does it?”
“It’s all in the appraisal,” Violet told me. “They vary. And people that inherit aren’t always that savvy about local markets. Paying eighty percent of a low appraisal is sometimes like paying fifty percent of a fair appraisal.”
I suddenly pictured Spencer Thompson at all those county events, schmoozing with real estate professionals. I was willing to bet a lot of those people he was sharing drinks with in those pictures were appraisers.
“Go on. You mentioned tax sales as well?”
“Yep. Some flippers like to also haunt the tax sales, then basically blackmail the lender or the owner double or triple the tax lien price, making their money that way. It’s not really flipping, but it can be a lucrative source of money.”
Flipping and tax lien scams. It was a whole world I’d been completely unaware of. It made sense based on the company Spencer Thompson seemed to keep. And the mysterious tax payment from his checking account seemed to fit in with that scenario as well.
“Do you have a way of tracking those people who buy at tax and foreclosure auctions?” I asked. “I mean, without crossing the line at work?”
She smiled. “Of course. All that is public record. Do you want me to pull a list of all non-property owners who have paid the tax lien at auction in the last five years? And what houses were sold at foreclosure auctions?”
I thought about that for a moment. Spencer was probably using an LLC or shell company for this, but I might be able to connect a name or two with what I hoped to dig up at the State Licensing Division.
“Yes, please. And I probably owe you more than fifty dollars at this point.”
She waved the comment away. “This is the sort of thing I really want to do for a career. The county tax office is just a stepping stone. Your company name on my resume, plus a reference is worth the extra work.”
“You do realize that ninety percent of forensic accounting is probably high-profile divorce cases like this one,” I warned her.
“Yes, but there’s a lot of bank fraud and corporate embezzlement, too. I wouldn’t even mind leveraging my county job for a federal one. My major was accounting, but I minored in IT security, and I’m taking some online Master’s classes to get an advanced degree.”
She was so driven and focused. And I couldn’t help but compare her to her sisters—especially Peony.
“What…what spurred this interest of yours?” I asked, trying not to insult the girl.
She flushed. “You mean a poor girl from the ‘hood getting into accounting and cyber security?”
“I’m sorry—”
“It’s okay, honestly. Lots of kids from the wrong end of town go into law enforcement, trying to make a difference. This is my way of making a difference. I grew up with crime, but it was the sort of stuff that’s stereotypical for a poor neighborhood. Smash and grab. Dime bag deals. Two-bit cons. Like when we were in middle school and we needed to have a tablet for schoolwork. The rich kids got theirs new from their parents. The middle-income kids had the rental tablets from the school system. For the poor kids, you needed a form filled out by your parents, and they’d waive the rental fee.”
I nodded, wondering where she was going with this.
“The only problem is some kids couldn’t get their parents to sign. Maybe they were embarrassed, or maybe too drunk to sign it. Most of us just forged our parents’ signatures. Some kids went out and stole a tablet from somewhere and used that. Some just went without and failed.”
“I’m assuming you just forged your mom’s signature?” I asked, knowing Violet wouldn’t have jeopardized her future by committing robbery.
“Yeah, on that as well as all my financial aid forms for college. But there was a kid who hacked into the school system. If you paid him a few bucks, he’d get you the tablet, or two or three. He’d change grades. He’d make it look like kids had paid the fees for sports, even though they hadn’t. And he wouldn’t do it for the rich kids, either, only us poor ones. We all kept mum about it, and no one ever knew. He’s probably still doing it.”
I frowned. “Your grades…?”
She blushed. “I earned mine, but there were lots of football kids who didn’t earn those Cs that kept them on the team.”
“Holt?” I asked.
Her smile was full of fond nostalgia. “I don
’t speak ill of the dead. Anyway, I knew that hacker kid. And I thought if he could do that barely knowing how to find the control-alt-delete keys, then someone with far more savvy in IT systems, or in processes and procedures for handling large sets of data, could become rich.”
“Did you ever think of becoming rich that way?” I asked. “Because I’m not sure I would have blamed you for that.”
“No.” A dimple creased her left cheek. “Wealthy people with connected families get away with that stuff, not poor people. Besides, I don’t really care about the money. I want to catch the crooks and send them to jail, especially the ones who think they’re too smart to get caught. That’s what drives me.”
I nodded, completely understanding this young girl. “So, we’ve got flippers running icky but legal scams with property tax liens. What else?”
“With some of those property tax purchases, they end up with the house. Those are the cases where someone has died and the estate is in limbo or there is no immediate next of kin. Some are where an elderly person forgot their tax bill, and there isn’t any family to bail them out. Sometimes it’s just an abandoned house and who knows what happened to the owners. Those places aren’t in the best of shape. The flippers have to basically foreclose on the house with the tax lien to get a clear title. Then they fix it up and sell it.”
“Okay. That’s property tax auctions. Anything else?”
“Like I said, sometimes they can do a lowball purchase of an estate property. Out-of-state grandkids, none of whom want the house and just want the whole thing settled and done so they can move on. The flipper buys it with a quick close and no inspection or repairs, and then fixes it up and sells it quick.”
“Basically, buy cheap and sell for a profit.” I looked down at the bank statements. “So, where do you think this guy would be getting the money for this?”
“Well, if he started siphoning money from his paycheck a decade ago and was able to pick up one or two purchases for a few thousand, he could be funding recent investments from the sales profits of those earlier homes,” she suggested.
