by Todd Borg
“A Limited Liability Company,” I said.
“Yeah. So when the IRS checks the Red Roses paperwork, they see that Fundraising Matrix Systems LLC raises all of our money. I’ve heard that most fundraising companies take a large percentage as their fee. In Dory’s case, she pays eighty-five percent of gross revenue to Fundraising Matrix Systems.”
“A huge percentage.”
“Yeah. But as Dory always said, the fundraising company has sophisticated techniques that bring in the money, money that the charity wouldn’t otherwise have, so Fundraising Matrix Systems earns its fees. Eighty-five percent of the gross revenue is the five million you’re wondering about.”
“Okay, so Fundraising Matrix Systems gets five million. Where’s the scam in that?”
Kyle swallowed. “Fundraising Matrix Systems is a for-profit company, and it’s owned by Dory.”
TWENTY
“ You’re saying her Red Roses charity pays a separate company five million a year and that Dory owns that company, too?”
“Yeah. But I don’t think her name is listed as owner of Fundraising Matrix Systems. There’s some way it’s hidden.”
“That sounds like laundering money.”
“No, it’s all legal. And Fundraising Matrix has expenses, too. Office staff and website stuff. But it’s mostly automated. The software was set up by a company that specializes in building online stores. The mailers are printed and sent out by a printing company. The office staff is a woman in Oakland who does almost everything except during the Christmas holiday rush. Then Dory hires two temps to help out.”
I said, “If you take those expenses out of the five million dollars, that would leave a lot of money left over.”
“Yeah,” Kyle said. “About four million five hundred thousand. Dory pays income tax on that, so it’s all legitimate.”
“But it’s still a scam.”
Kyle seemed to squirm on the bar stool. “I guess I’m just thinking that the people who donate to Red Roses probably wouldn’t think it’s right that the money they send in goes to Dory’s accounts and doesn’t actually feed kids or anything.”
“Just to be sure I understand,” I said, “Red Roses of Hope takes in all this money. Then it gives most of it over to Dory’s other company for fundraising. So from the point of view of the state or the feds, Red Roses of Hope charity has relatively little left over to use for actual charity work.”
“Correct.”
“And of that smaller left-over amount, Dory also paid herself a regular salary. Money that looked, on the books, like operating expenses that any successful charity would have.”
Kyle nodded. “And because of the donation value inflation, Dory could claim that her Red Rose charity gave away most of its net income.”
I said, “The inflated value donation is just a figure on a tax form. The money still exists. Where does that it go?”
“I don’t know. But stuff like this house got paid for in some way, whether from the charity or the fundraising company. Same for her condo in Hawaii, her cars, other stuff. And when she takes vacations, she’s officially doing research to learn how best to do her charitable giving.”
“So the vacations get deducted as business expenses,” I said.
“Yeah.”
“I’ve always thought that charities were non-profit companies that had to have a board of directors. What about Dory’s?”
“Yeah, for sure. Nine friends. Actually, they’re really just drinking buddies that belonged to Dory’s sorority in college. They all get a stipend for their services, and Dory lets them use this house and the Hawaii condo.”
“I’ve heard of exorbitant salaries for charity executives, but this seems a step above that.”
“Totally.” Once again Kyle sounded proud of the scam. “Dory often said that while people at the top of big charity companies make big money, it’s nothing compared to successful mid-sized charities that don’t have lots of employees and real boards of directors. Although I guess in the charity business, they’re not called owners.”
“What do you mean?”
“She said that charities are owned by the public and the people who run them are called stakeholders. Anyway, she kind of scoffed at her poor charity colleagues who work for the bigger name companies where there’s more scrutiny. Those people only make hundreds of thousands per year compared to the successful acts put on by people like her, who make several millions per year. I remember her talking about a guy in New York who claims that his charity provides for the wishes of dying children, while the reality is that he makes over a hundred million a year. All legal because the vast majority of it is paid to his for-profit fundraising company.”
I couldn’t hide my disgust. “These people are crooks, ethically and morally.”
“I agree,” Kyle said.
“And you’re saying it’s legal.”
Kyle nodded. “Yeah. I talked to Dory about it once. She said that what makes things legal isn’t about what’s ethical or not. It’s about what legislators vote for to keep the economy going. She said her business generates huge dollars and sends it along through the economy, and that’s better than just having that money sit in old people’s checking accounts doing nothing.”
I made a slow shake of my head. “And that leaves her plenty of money to contribute to the re-election campaigns of legislators who see things her way.”
Kyle nodded. “Dory always says that if you’re stupid and use a gun to rob a thousand dollars from a gas station, you can go to prison for decades. But if you start a charity and use the standard accounting techniques, you can make millions every year. And the local chamber of commerce might give you a medal for bringing so much money into the local economy.”
“You called it accounting techniques. It sounds more like accounting tricks.”
“Yeah, I think so,” Kyle said.
What he said seemed so unbelievable that I made a mental note to check into the regulations about charities.
After a minute of silence, he said, “How did she die?”
“Somebody tied her up to the tea house on Fannette Island in Emerald Bay, Lake Tahoe. It appears she died of exposure. Hypothermia.”
“So the killer wanted people to find her body,” Kyle said.
“I think so. There were three roses folded up and stuffed into her mouth. Taped in place.”
“What?” Kyle looked appalled. “Why?”
“I’d guess the killer wanted to display her body in the manner that would get the most attention. Can you think of anyone she burned? Anybody who might want to harm her?”
He shook his head. “Certainly there were people who didn’t like her. But kill her? No, I can’t think of anyone who disliked her that much.”
“Where does Dory do her banking?”
Kyle thought about it. “Well, her business checking accounts are at Marin Trust and Savings Bank, both the Red Roses of Hope charity and Fundraising Matrix Systems. That’s where I deposit the checks I collect in the mail. I know she also has some savings in other banks. She also invests money through a couple of investment brokers. Stocks or whatever they sell.”
“Do you have access to any of the accounts?”
“No.”
“Do you pay bills for Dory?”
“No. She’s real private. She’s never given me any of her computer passwords or anything.”
“Where does Dory keep her business records?”
“In her office downstairs. She keeps the door locked. I don’t even have a key. I only have access to the checking deposit forms and the copy machine.”
“How would you describe what you do for Dory?”
“I’m really just an errand boy in nice clothes. I pick up the mail every day. She makes me wear a suit in case anyone finds out that I’m getting mail for the charity. When I get home, I stamp the checks and make photocopies of them so she has their addresses. Then I enter the amounts on a deposit form, put them all into a blue deposit bag, and ta
ke them to the bank. I have a key for the bank deposit drop.”
“Are you one of the charity directors?”
“No.” Kyle looked off and stared out the windows. “I used to think that when I turned eighteen, she would take me in as a partner. But she’s never changed her attitude about me.”
“Did she pay you well?”
“No. That always pissed me off. I was learning about the business, and I could have taken on a lot of responsibility. But I’m still just the little brother errand boy.”
“Be very glad for that. It might keep you out of prison.”
I picked up my phone, clicked off the record function, and scrolled through my contacts. It was after business hours, and I wanted to talk to Sergeant Bains of El Dorado County. I found his cell number and dialed.
While it rang, I opened Kyle’s wallet and pulled out his driver’s license.
“Hello?”
“McKenna calling. I have information for you. First, almost for certain, the body you retrieved from Emerald Bay belongs to Dory Spatt.”
“I thought it was Isadore?”
“Apparently, Isadore was a kind of stage name that Dory used. I’m in Marin County, at Dory’s Sausalito home, talking to her brother Kyle who worked for Dory. Turns out that Dory ran the Red Roses of Hope Charity for Children. The brother says it’s a scam. It appears that Kyle wasn’t much more than an errand boy. But he knows about many aspects of the scam, so the state may well bring charges against him. But for now, he’s being cooperative. I’ll give you his driver’s license number so you will have his descriptors should he attempt to flee.”
Kyle’s eyes got wide as I said it.
“Ready,” Bains said.
I read off the address. “Also take down the address of Dory Spatt’s house, where Kyle is living,” I said as I looked at Kyle. He told me the address, which I repeated into the phone.
“One more address,” I said. I recited the address on Market Street in San Francisco. “It’s just a mail drop that Dory Spatt used for the Red Roses of Hope charity.”
“You mean,” Bains said, “that there’s no office? It’s just a front to make the charity seem more respectable?”
“Exactly.”
“You think the brother had something to do with Dory’s death?” Bains said in my ear.
“Probably not,” I said as I looked at Kyle.
“Do you have any other ideas about the killer’s identity?”
“Not now. But I’ll be in touch.”
We hung up.
I walked over and looked out at the swimming pool glowing turquoise in the night and the distant lights spread across the San Francisco Bay.
“Can you think of anyone who had disagreements with Dory?” I asked.
“Not that I know of. Dory didn’t talk to donors or anything. From phone conversations I overheard, it sounded like people seemed to like her. Sometimes, when she didn’t want to go places alone, she would take me to business mixers in the area, places where she could, as she called it, take the temperature of the charity climate. Dory was charming. Certainly with men, of course. But women also seemed to like her. Sure, some of them would give her a kind of look.”
“What look is that?” I asked.
“A look of resentment. Like, it wasn’t fair that some people win the lottery in the beauty department. Like Dory didn’t deserve to be beautiful. But Dory would usually win them over.”
“Can you think of any of those women?”
“No. When her sorority friends who serve on her board of directors come over here, I’ve seen a couple of them give her those looks. But I don’t think it was more than envy of her looks.” Kyle frowned. “So, do you work for the cops?”
“No. I was hired by a man named Douglas Fairbanks. Do you know him?”
“No. I’ve heard of the actor. But that person died a long time ago, right? Why would this Douglas Fairbanks hire you to investigate my sister’s death?”
“He didn’t know she was dead. He just wanted me to find her. He thought he was your sister’s boyfriend.”
“No, not again.”
“She’s done this before?”
“Yes. She was – what’s that word – narcissistic. She was proud of her power to attract men. Dory loved the way older men would fall for her like she had some kind of magic potion. But it caused her so many problems. Why couldn’t she just be satisfied with an ordinary life? She was so smart. Yet, whenever she was presented with a choice, she always took the wrong one.”
Kyle’s anguish seemed sincere. He continued, “And did she dump this man like the others?”
“Maybe she would have. But she died before that could happen. Tell me, Kyle, why do you think she did this? Why would a smart, beautiful woman be a crook?”
Kyle stared up at the wall in a way that reminded me of Douglas Fairbanks when he stared off.
“When I was a little kid and Dory was maybe sixteen, we were living in a one-room apartment in South San Francisco. A real shit hole. Our mother worked a day shift at a convenience store and an evening shift as a motel clerk. Mom and Dory had tremendous fights. Dory thought that mom was a failure for not having any money, and mom thought that Dory didn’t have a clue about how hard it was to make a living. Mom even taunted Dory, saying that if Dory didn’t open her eyes to the way the real world worked, if she didn’t get an education and a real job, then she would never have any money, that she would never amount to anything. Dory hated mom’s attitude. But then, as Dory got a little older, she discovered the power of beauty and how she could get men to do whatever she wanted. And one day when mom told her to get used to being poor, Dory ran away. She sort of hitched herself to the men who started the Red Roses of Hope. Then, she talked the Red Roses man into hiring her.”
“Wait. Were there two guys or one guy?”
“Yeah, it’s confusing. I guess the Red Roses charity was actually started by two guys. Then one bought the other out. The remaining one hired Dory before he died. After that, Dory owned the whole business.”
“Do you remember hearing the names of those guys?”
Kyle shook his head. “I never knew for certain. But one time she made a crack about them. She said something like, ‘the guys were a crazy pair, a real Larcenous Larry and Hustler Harry.’ I remembered that ’cause I didn’t know what larcenous meant. So I asked if that was really their names. She said she thought Larcenous Larry’s real name was Lynn. But then she stopped as if she regretted saying it.”
“So she didn’t say what Harry’s real name was.”
“No.”
“Did you ever hear Lynn’s last name?”
“No. I got the sense that real names were best avoided in case the charity got in trouble with the authorities. Dory always just referred to her partner as ‘her partner.’ I think that was part of their agreement. That way, no one would ever accidentally find out his identity.”
“Was it your sense that Lynn was the partner who hired Dory? Or was he the partner who split before that?”
“I don’t know,” Kyle said. “I’d guess he was the guy who split, but I don’t know why I think that.”
“Did you ever see either of those men? Or have you seen any pictures of them?”
“No.”
“Did you get the feeling the men and Dory were pals?”
Kyle thought about it. “I don’t think there were bad feelings between Dory and her partner. But it wasn’t like friends.”
“When he died and she took over the charity, did she seem tentative or worried about how she would manage?”
Kyle smiled and shook his head. “No, it was the opposite. She was like a tiger let out of the cage. She charged ahead into her new life like she’d been given the greatest gift. She was so excited, all she did was work. Eighteen hours a day. It’s like she realized she could finally make big money, and she was a dynamo about it. It was just two years later that she told me that she was doing ten times the business that her former boss had done. She
saw herself as a powerful businesswoman, and she believed nothing could ever stop her from proving that mom was wrong, that mom was the real loser. She wanted mom to eat her words for not believing in Dory’s potential.”
“Do you think that Dory might have orchestrated the death of her former boss?”
I expected Kyle to shout out a protest at the idea. Instead, he said, “I’ve wondered about it. But I don’t know.”
TWENTY-ONE
“ Kyle, what records of Dory’s do you have access to?”
He shook his head. “Like I said, she keeps all that stuff locked in her office.”
I untaped Kyle’s hands and legs.
“Show me where her office is.”
Kyle stood and stretched, then walked out of the kitchen and into the living room. There was a broad open stairway that went down in stages, turning to the left, wrapping around a hanging art-glass chandelier that was 20 feet tall. I followed Kyle down to another wide room, this one cozier than the wood-floored, grand piano room upstairs. There was a thick-nap carpet, a stone fireplace, and big leather furniture arranged to face a large video screen. Kyle went down a hall with several doors. The first was open and contained fitness equipment. Across the hallway, was an open door. “Guest bedroom,” Kyle said.
The room was modest in size but luxuriously furnished.
Kyle walked past and touched the next door, which was next to the exercise room. “This is the utility room.” The last door, which was closed, was on the same side as the bedroom.
“This is Dory’s office.”
There was a doorknob and a deadbolt above it. I tried the doorknob. Locked. The lockset was heavy. I’d noticed that the other doors in the house were oak. It would be difficult to break into. “Did she keep the deadbolt locked as well?”
“Yeah.”
“Where did she keep the key?”
“Her key ring was either in her pocket or her purse.”
“Does the office have windows?”
“Just one. Like the guest bedroom.” Kyle went back to the bedroom to show me. I looked at the guest bedroom’s window. It was made of oak, very difficult to compromise from the outside without breaking the glass.
