by Pat Muir
During the next few weeks, Steve and I worked to wrap up loose ends. We questioned Wayne Collins after reviewing his past e-mails and phone logs. Ryan had concluded that he had nothing to do with the money laundering. We decided Wayne was not involved with the murder of Flynn. His computers and records were released to him. I heard later he hired an attorney to get back the money from his business, personal, and wife’s accounts that the DEA had taken. Sadly, the attorney told him it would take so long that his fees would exceed the seized funds. The DEA reported their examination of the computers and paperwork seized from Swift’s various businesses indicated the businesses were operated both legally and profitably.
Brenda Williams called me three weeks after Collins’s death to say the federal attorney handling the money laundering charge would like me and Steve present during her questioning of Laurence Swift. “You two were so involved in the investigation that led to his arrest that she…her name is Jane Daumont…feels your presence could be helpful. She will be calling you.” Brenda coughed before continuing. “Give me a written synopsis of the evidence against Swift so I can forward a copy to Daumont.” She coughed again. “Sorry, I’ve got a cold. There’s always the possibility that in being questioned about money laundering, Swift may say something implicating himself or others in Flynn’s murder.”
I asked Steve to review my written synopsis and to be ready to accompany me. I let Thompson know where things stood and then began writing the synopsis, six pages in all. I had Steve look at my work to make sure I had not omitted anything. He made a useful suggestion concerning the alibi for Dollar and Johnson, but then he irritated me by making editing corrections on my report. “They are to make the points clearer or less ambiguous,” he said apologetically when I raised my eyebrows at them. Steve had a better command of English than I, so I accepted his corrections. But I did not like them being pointed out by my subordinate. I gave the synopsis to Thompson, who reviewed it promptly and said that I had expressed myself very well in assembling the evidence. Then I sent it by department courier to Brenda Williams.
The forensic report on Collins killing came the same day. In addition to what we already knew came the information that any fingerprints found in his apartment belonged either to friends or house cleaners. There were no Bailey fingerprints.
Brenda, Steve, Jane Daumont, and I introduced ourselves in an office at the federal detention center. Also present were Drew Ryan and Joseph Jackson, the latter carrying a briefcase filled, I was sure, with financial reports on all of Swift’s businesses, statements on the type and values of assets seized, and an evidence report on the money laundering process, including the marked bills. Jane Daumont, about forty years old, blessed with good looks, elegantly dressed in a Vera Wang top, slightly taller in her four-inch heels than my seventy-one inches, stared down at me when we shook hands. Her patrician air and Southern accent disturbed me in part due to envy and in part due to innate racial prejudice. Brenda told me later Jane had been at the University of Alabama and later graduated from Stanford University’s law school. Already present were Larry Swift and his attorney Pearson Sweeny.
Jane started the interview. “Mr. Swift, we have tried to question you before, but you have declined to answer. We are here to present our case to you in the hope that you will cooperate and reach a plea agreement with us. I need to impress upon you how serious we view this case. It is not just a matter of laundering money believed to come from the sale of illicit drugs. We also believe the money laundering led to the murder of two men, one of which the state believes involved you.”
Pearson replied, “My client gave no order to murder anybody and is unaware that any of his associates or employees were involved.”
“Our evidence shows you have been laundering money recently at the rate of four million dollars per month,” stated Daumont. “Is that a correct number?”
“My client will concede the validity of that number,” answered Sweeny.
“How long have you been laundering at that rate?” asked Daumont.
“My client tells me that it has gradually built up to that rate over a period of twenty years,” replied Sweeny.
Daumont took out a calculator and pressed a few buttons. “That would mean you have laundered about five hundred million dollars over that period of time?” she asked.
Sweeny looked at Swift, who responded. “Something like that.”
“Processing a sum of that magnitude merits the maximum federal penalty,” said Daumont, “unless you give us mitigating evidence or lead us to others who have participated in that processing.”
Sweeny raised his hand to speak. “My client has prepared a written statement about his involvement in money laundering.”
He reached into his briefcase and pulled out copies of a thick document and handed one to each of us. “My client would like to tell you how he became involved and why he is requesting leniency in the handling of his seized assets. This document lists in an appendix all the assets he controls and the names of the various entities that own them. The ownership of those entities is also listed and marked whether that ownership came by legal or illegal funds. You will find many local investors in that legal category, people of sterling reputations. We are asking that their ownership be protected from seizure.”
He motioned for Swift to speak, but Daumont forestalled him. “Mr. Swift, your assets have been seized because they are all tainted by your money laundering activities. Nothing you can say here diminishes that tainting. Cooperating in our investigation by telling us the extent of the money laundering and what you know about other participants that will allow us to convict them could be helpful in any recommendations we might make for leniency in the sentencing for your crime.”
What a damper!
Sweeny looked at Swift, who shrugged and said, “This conversation is being recorded, I presume.” Daumont nodded, and Swift continued. “My name is Laurence Swift, and I am fifty-two years old. I live at 2455 Magnolia Drive in San Marcos, California. I am the general partner or managing director of the various entities that operate the numerous businesses that are listed in the document you have been given. These businesses have all been operated legitimately, and their closure following seizure of their assets has put my valued employees out of work. Given the current state of the economy, I earnestly request that they be allowed to open for operation.”
He paused for a moment as though he expected some acknowledgement signal from Daumont. None was forthcoming. “To understand how I came to be where I am,” he continued, “I need to tell you something of my career. I grew up in San Diego and obtained my degree in accounting from San Diego State University. I got a job with the local National Republic Bank in San Diego right after graduating at age twenty-two. By age twenty-nine, I had become the branch manager. I became friends with many of the bank’s wealthier customers, and this put me in good stead when an opportunity arose. The then owner of the Palomar South mobile home park suffered some severe losses in his other businesses and needed to raise money quickly. I formed a consortium to purchase the park in which I put what modest cash I had saved at that point together with cash from these customers to make a twenty percent down payment. My bank made the bridge loan until we obtained long-term financing. I earned a reputation among these bank customers as an entrepreneur. I also earned a monthly fee for managing the park, where I installed my uncle as manager.”
He paused before he resumed. “A few months later, one of these customers offered me a job to manage a check cashing business he had in town at a salary that was sixty percent higher than what I was earning at the bank. He also said he would back me in any further real estate or business ventures. It was an excellent offer, and I took it. The client base for a check cashing business is quite different from that of a bank, but I adapted to it. The check cashing business grew as I introduced better ways of serving the customers and expanded our reach to sharing data with pawnshops and liquor stores. About two years into that job, my patron
wanted me to write a check from the business for twenty-five thousand dollars for the cash he said his friend had won at the casino and did not want to declare to the Internal Revenue Service. My patron…”
“What was his name?” interrupted Daumont.
“His name was Hector Gomez,” replied Swift. “He is deceased.”
He stared at Daumont as though expecting her to interrupt again. She did not, so he continued. “I knew it was wrong, but my patron had been very good to me, so I declined to report this large cash transaction to the authorities. I hid it by making three deposits under the reportable amount of ten thousand dollars spaced out over three weeks. My patron was very pleased and gave me a bonus of two thousand dollars. The same thing happened a couple of months later. This time, he said his friend had won the money betting on horses. I did not believe him and asked him if he was sure about the origin of the money. He replied that he was not really sure but that this friend had a hold on him and might injure him if the transaction did not go through. I said he should go to the police, but he replied he would then have to report the prior transaction as well. ‘That would cause you a lot of trouble,’ he said, staring at me in his usual friendly way. I realized then that I had been compromised. I hid the money in the business as before and received a bonus of nearly ten percent of the funds processed.”
Swift sighed and shook his head before continuing. “I was asked to hide further monies, and I did so for a year or so, but I declined to be compensated for doing so. As the funds to be hidden grew, I pointed out to Gomez this process was bound to be discovered, since the amounts to be hidden were overwhelming the check cashing business. I said we needed to start another such business and we should diversify into other cash generating businesses to better conceal the funds. Gomez said that was a great idea. He said he and his friends would put up the money to start other businesses. He advised me to put what further money I had saved into any new businesses and to demand a cut of the laundered funds. I told him that I did not want to earn anything from the money laundering. I said I would start businesses and would operate them completely legitimately but that I would add drug money to our deposited funds. I said it would help our image if some of my old bank customers could be part owners in the businesses and earn proportionate shares of the legitimate profits. All profits would be declared to the state and federal governments; partners and shareholders would receive legitimate and illegitimate dividends or payouts to the appropriate parties. I demanded to have full control to ensure I would not be required to launder money in excess of forty percent of the legitimate revenues. I reckoned that would be reasonable enough to hide, though it turned out to amount to over two hundred percent of our legitimate profits. I said I would take no salary but wanted ten percent of the legitimate profits for my overall management. I said ownership of the businesses would be hidden from public view as limited partners or as shareholders in an S corporation.”
Swift took a deep breath before he continued. “Gomez said he would get back to me on my proposal, but he said it sounded reasonable. And a few days later, he met me and said his parties were delighted with the proposal. It meant their money was being laundered at no cost to them when others might charge as much as forty percent.” Swift looked up before continuing. “I miss Gomez; he was kind and charming. He told me later he was a little sorry he’d compromised me and would make it up to me. When he died of cancer six years later, he willed me his twenty percent ownership in that first check cashing business. The drug people had one proviso to my proposal…that they would have one of their people working with me…to make sure they were not being cheated, of course.”
“That would be Arzeta?” Daumont asked.
“Not initially,” replied Swift. There were two or three others. One was especially difficult to work with, and I suspected him of taking money off the top before I processed it. I talked to Gomez, and he was instantly replaced. Gomez told me I had earned a reputation for probity with his parties and they wanted somebody sensible and familiar with bookkeeping to work with me. Arzeta has been with me for nearly nine years. I still hardly know the man. He is very efficient in what he does.”
“Did you or Arzeta organize this delivery method of the drug money?” Daumont asked.
“The drug mafia rep and I would pick up the money at drop points like the gym, a mail box, or a storage locker. Sometimes, we would have money shipped in to us by mail, FedEx, or United Parcel Service. As our businesses grew, we had to make more pickups, and we both realized that carrying them frequently into our office would invite suspicion. I suggested the vacant home method to Arzeta eight years ago, and it was he who recruited Andy into doing it… Poor Andy.”
“Do you know how the recruitment was done?” I asked.
Swift replied, “I don’t really… I suspect Arzeta had some kind of hold on Andy.”
“Did you pay Collins?” Daumont asked.
“No. Arzeta told me simply not to charge him rent. I thought that amount small considering the risk Andy was taking. I reckoned there was another factor keeping Andy from protesting.”
“So, you’re claiming you have never been directly paid for laundering money?” asked Daumont.
“Except for those first two times eighteen years ago, that is correct,” replied Swift.
“But many new businesses were started in whole or in part with laundered money?” asked Daumont.
“Yes, they were,” replied Swift. “Those owners earned legitimate profits as well as profits from laundered money. Legitimate owners who invested their own funds were paid only their share of legitimate profits.”
Sweeny spoke up. “You have seized assets worth over one hundred million dollars belonging to my client and his legitimate partners. We will be challenging the judicial hearing that is required because the assets are over one and half million dollars. Can you tell me when that hearing is scheduled?”
We all looked at Daumont, who answered, “It has not been scheduled yet, but we are required by law to schedule it within six weeks of the seizure.”
“You realize,” said Sweeny, “that people who invested their own money in good faith into Mr. Swift’s businesses will lose their investment if you retain those seized assets.”
“You are correct, Mr. Sweeny,” replied Daumont. “Those businesses are all tainted by Mr. Swift’s money laundering activities. We will insist all seized assets be retained.”
“You have also locked the doors on these businesses,” said Sweeney. “Is it your intention to sell them?”
“We have not considered that,” replied Daumont. “At this point, we regard them as criminal enterprises that must not be allowed to continue operation.”
“You realize, then,” said Sweeney, “that since these businesses are no longer operating, their goodwill and their employees will dissipate. These businesses will become valueless. Surely, it would pay you to release them to operational status so that does not happen?”
“Mr. Sweeny,” replied Daumont, “that is not my concern. Those legitimate investors—she emphasized the word “legitimate” disparagingly—should have done due diligence before investing with Mr. Swift.”
“You have also seized all cash from the Palomar South mobile home park, whose ownership clearly precedes any involvement in money laundering,” said Sweeny.
“That park is owned as a California limited partnership,” replied Daumont. I suggest the limited partners look at their partnership agreement and select a new general partner in view of what I anticipate will be your client’s bankruptcy. That partner can attend the judicial hearing and make his claims. I’m sure the park will operate adequately until after the hearing is held.”
She paused for a moment. “Mr. Swanson has been arrested, but we are not filing money laundering charges against Mrs. Swanson, so she should be able to operate the park in her husband’s absence.”
Daumont looked at the notepad she had in front of her before speaking. “Mr. Swift, are you prepared to plead
guilty to the money laundering charges we have filed against you?”
Sweeny spoke up rapidly. “I have advised my client not to plead guilty to any of these charges. I would like first to hear what sentencing guidelines you will be telling the judge.”
“I can’t reply to that at this time,” replied Daumont. “We will need to examine this document you have provided and assess its value to us in this investigation.” She stood up indicating the interview was over and left the room accompanied by Ryan.
“What is your posture with respect to the murder of Andy Collins and the alleged murder of Arthur Flynn?” Sweeny asked Brenda.
Brenda looked at me and Steve. We said nothing… It wasn’t our place to do so. She turned to Sweeny and replied. “I will review the matter with our investigative staff and seniors in my office before issuing a decision.”
CHAPTER 27
Sweeny and Swift were escorted out, and Brenda motioned Steve and me to stay. “Did you ever find Flynn’s fingerprints on the money in Collins’s safe?” she asked.
“’Fraid not,” I replied.
“Too bad,” said Brenda. “It would have solidified the case.” She paused. “I have to deal with my boss in offering a plea bargain to Swift. His attorney, Pearson Sweeny, says his client is innocent and wants a trial, which my boss wants to avoid. I’ve read your synopsis, but I would like you to opine on the matter here so I can make a recommendation.”
I said, “Brenda, the first thing is to look at motivation. Swift wanted Flynn not to give evidence against him and his uncle. Swift had a very upscale lifestyle to protect. Then we look at means. His money laundering associate, Arzeta, telephoned a professional hit man called Joseph Bailey the same day as he heard about Flynn’s discovery of money laundering. Swift made a phone call to Bailey two days later. The next day, an attempt was made on Flynn’s life by damaging a gas connector in his mobile home. Bailey’s fingerprint was found on that gas connector. Swift phoned Bailey from his home two days after the failed first assassination attempt to tell him Flynn was going to the Russian River fishing camp and to follow him there. He knew where Flynn was going from his live-in girlfriend, Marge Holmes. Arzeta made Andy Collins go with Bailey. They used a stolen car to travel to the fishing camp and obfuscated their registration there to avoid being identified. Bailey dropped Collins off at Santa Rosa, where the stolen Avalon was found. We believe Bailey killed Flynn, stuffed his body in the trunk of the dead man’s car, and dumped it somewhere near Santa Rosa to be picked up later. Furthermore, Bailey made a phone call to Swift that Tuesday, which we believe was to confirm Flynn had been killed. Bailey then drove the car to Compton. There is clear evidence of Flynn’s dead body being in the trunk of that car. We believe Andy Collins was killed to stop him from giving evidence against Swift and Arzeta on Flynn’s murder and perhaps the extent of the money laundering.”
