She and Max were the only partners with complete access to the main trust account. Other partners could access only trust subaccounts they’d created for specific transactions they were handling. It was all keyed to the iris scanner.
After meeting with the bookkeeper, Beth went back to her office and emailed each of the firm’s partners, asking if any of them knew anything about trust account transactions within the past two days. Then she went online and accessed the account herself.
The $500,000 wire transfer into their trust account contained the routing number and account number of the sending bank. The unauthorized withdrawal in the same amount contained the routing number and account number of the receiving bank. No names, only numbers. Beth called Fidelity Bank and requested copies of the transmittal letter that accompanied the deposit and the one that authorized the withdrawal. They were promised for delivery by the end of business that day.
* * *
—
The problem increased exponentially the next morning. This time there were two more $500,000 deposits wired into the firm’s trust account. Within minutes after each transfer in, there were transfers out in the same amounts to an offshore bank account bearing the name of Max Swahn.
Beth worked closely with Fidelity to identify the names and locations of the remitting banks that were the sources of the transfers in, and the bank that was receiving the transfers out to an account in Max’s name.
The security people at Fidelity were looking for answers, but the process was slow. Unsatisfied with their response, she went online herself and began exploring some rogue websites she had discovered over the years. When she finally got a hit, it became clear that there were three remitting banks but only one receiving bank, and all of them were located in places known for their banking secrecy laws.
Chapter 22
Beth got another piece of information about the mystery later that morning, when she got a phone call from her mother.
“Hi, Mom.”
“Where’s Max?”
“In court. What’s the matter?”
“Three five-hundred-thousand-dollar deposits were made yesterday into the checking account Max and I have at the Antigua West Bank.”
“Normally I’d say you and Max hit the lottery, but I can hear that you’re not in the mood for cutesy.”
“I was just online checking the account and saw that the balance in the account was a million and a half dollars more today than it was yesterday.”
“Mom, I’m fairly sure it has something to do with some bogus activity that’s been taking place in our firm account here.”
“Wait, I’m not finished yet.”
“Sorry, go ahead.”
“Someone tried to wire the funds out of our account this morning, but got shut out after three mistakes trying to enter our security code.”
“How’d you hear that?”
“I called Tad MacMillan, the bank president down in Antigua. He and his wife are good friends of ours.”
“Is that the guy who keeps his yacht in the slip next to Red Sky?”
“Right. Tad suggested that I close down any online access to the account.”
“That’s good.”
“So I told him that until further notice, they should only honor voice instructions from either me or Max accompanied by our security code.”
When Beth brought her up to speed on what had been happening to the firm’s bank accounts, Andi agreed that the Antigua account was not to be used at all until she got the go-ahead from Beth or Max.
* * *
—
After Beth got off the phone with her mother, her first call was to Reggie at P.P. Private Investigations. The minute she told him how their bank accounts had been hacked, he instructed her to close the accounts immediately. Her next call was to the vice president at Fidelity Bank who handled the firm’s accounts. She gave Beth the same advice.
Beth immediately closed their main trust account at Fidelity and all its subaccounts. All balances were transferred to new trust accounts in the same bank. She considered changing banks, but rejected it as overkill.
Then she updated Max and notified all partners that the trust account had been hacked and then closed. She withheld disclosing any information to the partners, except for Max, regarding procedures to access the new accounts. That would come later, when she was finished with her investigation.
* * *
—
Beth was most concerned about limiting the damages caused by the hacking of their accounts. Their money and their reputation were both at risk. Fidelity Bank was more concerned about its exposure to claims of money laundering, something that apparently happened not infrequently with remittances from offshore banks.
Money laundering violated half a dozen federal banking laws. When Fidelity Bank advised Beth to report these transactions to the FBI, Beth told Max and then called Sean to alert him.
After she briefed him, Sean suggested they meet for dinner to discuss the whole thing, but Beth already had plans with Max and Andi, so she and Sean made a date for the following night at seven.
After Sean got off the phone with Beth, he walked down to Laura Simonson’s office and read her in on the bank transactions at Beth’s firm. She called Beth, and they made plans to get together at Laura’s office the following afternoon.
Chapter 23
Beth shook hands with Laura Simonson, sat down across from her desk, and opened up her shoulder bag to remove her laptop. The office was typical mid-level FBI issue, desk complete with computer, very small conference table with three plain wood chairs and a vase of flowers in the center. On the credenza behind the desk, there were photographs of two small children, but Beth was more attracted to the first-place trophy from the Metropolitan Lawyers Basketball League.
“When did the FBI win the MLBL title?” Beth asked.
“That’s from my old firm, Coker and Dorow. We won Division Two Coed in 2010, the year before I joined the FBI. You play?”
“Did up until last year, D3 Coed, but I’m managing partner at my firm now, so my playing days are probably over.”
“I haven’t played since the twins were born in 2013,” she said, pointing at the photographs, “but our FBI coach wants me to play forward on our D1 women’s team this season, so I may if my husband and I can work out our schedules.”
“How tall are you?”
“Five nine. You?”
“Five eleven.”
“Can I get you some coffee?”
“No, I’m good. Let me turn on my laptop and show you what’s been happening at our firm.” Beth opened her computer and waited briefly while it powered up. Then she described in detail the three transfers in and out of their hacked trust account. When Laura asked her to send over copies of the transactions, Beth turned her down, concerned that if there was ever a lawsuit, the FBI might be forced to turn them over to some defendant during pretrial discovery.
“I understand, but I’d still like them.”
“Sorry.”
“Did you turn up anything on the three-and-a-half-million-dollar transfer from Pendayan to Gartenberg and LaVerne?” Laura asked.
“As a matter of fact, I think I may have found some connection.”
“Excellent.”
“The three transfers in and the three transfers out of our trust account each went through a minimum of four different offshore banks, all down in the Caribbean.”
“So even with my lousy math, I can see you have a universe of at least twenty-four banks, right?”
“Right, and only one bank appears as a conduit in each of the transfers. It’s down in Caracas, and the account’s in the name of a subdivision of one of Pendayan’s oil companies. I can give you the name and routing information right now.”
“Nice work, Beth.”
“
Now here’s something you can do to help me out….”
Chapter 24
After twenty-five minutes of small talk, margaritas, and dipping chips in salsa at the crowded bar, Beth and Sean were shown to their table at Su Casita.
“I’m glad you could make it tonight,” Sean said.
“So am I. Max already told Mom we’ve had a few meals together since you came back to the city.”
“Does that include the hot dogs we had in Foley Square?”
“It’ll happen or it won’t.”
“Is that a Yogi Berra quote?”
“It’s been two years, so let’s go a little slow. Give our feelings a chance to get in sync with our heads.”
“You’re right.”
“You’re agreeing?”
“I am. I do.”
“Max is really pissed and worried about those hacked bank transactions.” Her hand pressed down on Sean’s for emphasis.
“He must be, but you know it’s hard for me to discuss it with you during the day.”
“I understand, but the whole firm is having a collective attack of nerves.”
“Tell Max we’re on it. Laura Simonson specializes in bank fraud and money laundering. She’ll get to the bottom of it.”
“I had a good meeting with her yesterday. She agrees it’s tied to the BMI deal somehow.”
“She’ll keep you in the loop whenever it’s possible.”
“I know. That’s what she said.”
“What do you feel like eating tonight?”
Beth looked at her menu. “You deal with it. After margaritas and salsa, all Mexican food tastes the same to me.”
“Copy that.” Sean signaled to their waitress, who took their drink orders and quickly returned with more chips, fresh salsa, and another round of margaritas. By the time she returned for meal orders, Beth and Sean were still holding hands and their interest in food was minimal. Sean ordered fajitas for two. They ate quietly, and forty minutes later, he asked for the check.
They walked slowly back to Beth’s apartment, lingered over a kiss, and then lingered much longer over another kiss, and another, before Beth reluctantly broke it off while she unlocked the door.
Chapter 25
Max was greeted the following morning with certified mail from the New York State Bar Association initiating an investigation against him and the firm based on a complaint filed by an anonymous person. It alleged fraudulent transactions in their firm’s trust account.
When Beth called the bar association to ask for the complainant’s name, they refused. She informed them that the transactions were either the result of offshore bank errors or outright fraud by someone out to get them. In no event, she assured them, were any attorneys in the firm responsible.
When Beth mentioned that they had already reported the matter to the FBI, the bar association noted it in their file, but when she asked them to terminate their investigation, they refused.
That afternoon, Beth notified their malpractice insurance carrier about the complaint then called a meeting of the firm’s partners to bring them up to date on what had transpired.
Within an hour of the meeting, two junior partners from the corporate group had advised Max that they’d decided to leave and form a firm of their own with three of the associates. Beth immediately took their key cards, locked up their client files, and called building security to escort them off the premises. She then terminated their access to the firm’s server and bank accounts. An hour later, a senior partner advised Max that he was retiring, and another senior partner said that he was giving serious consideration to retirement.
Beth reviewed the firm’s partnership agreement and discussed it with Max, emphasizing the need for strict enforcement of their three-year noncompete clause. He decided to get the partners together again for some intensive damage control.
It was a nervous bunch that assembled in the main conference room, and they became more so when Beth told them about the group that was leaving the firm. While the remaining partners expressed no similar intention, several young hawks made a motion to replace Max with Elias Strauss as the firm’s chairman. Beth quickly squelched that uprising with the support of a large majority, but all things considered, it was still one of the worst days in the firm’s history.
Chapter 26
“Are you taking local counsel with you to argue the BMI zoning appeal in January?” Max asked Beth as he entered her office the following morning and sat down.
“I hadn’t planned to, but I would like Tripp to stand with me and introduce me to the appellate judge,” Beth said. “Let the judge know Tripp’s got skin in the game.”
“I’m sure he’ll do it if he’s not in the middle of a trial.”
“Good.”
“I’ll call him today,” Max said.
“Now what about our trust account debacle? Someone has us in their sights.”
“We have insurance to protect our trust accounts, Beth. Let the insurance company handle it, and we’ll handle the BMI appeal just like our retainer says.”
“But insurance won’t protect you from disbarment, Max, and it won’t protect us from being prosecuted for money laundering.”
“What makes you so certain we’re being attacked?”
“Because it all feels too personal, like getting even for something. It’s not just a fight about how much more the Old Main parcel is worth if the tunnels are filled in. I think Gartenberg is somehow behind it all, and maybe Benetez also.”
“But what’s that got to do with our trust account?” Max asked.
“Makes us look like crooks. Takes our attention off the appeal. They used offshore banks to salt our trust account and then wired it back out to your account in Antigua.”
“We’ll survive. I’ll survive.”
“I’m sure it’s all involved with the BMI deal.”
“I think you’re right. It’s the only answer that makes any sense.”
“Max, you could lose your license and the whole firm could explode just because of that complaint to the bar association.”
“It’s all contrived. You know that.”
“And that’s why we need to deal with it right now.”
“Then maybe it’s time for me to get outside counsel to represent me.”
“Let me handle it for a while,” Beth replied. “I want to find out who’s attacking us. Then we can turn it over to outside counsel for appropriate action.”
“So what’s your step one?”
“Get a judge to sign an order authorizing us to deposit the million and a half in the New York county clerk’s office. Then we get your bank in Antigua to wire the funds back up here into a special trust account I’ll set up.”
“And then you’ll deposit it in the county clerk’s office?”
“Exactly.”
“Perfect. It gets the money out of my personal account in Antigua and into the jurisdiction of the New York courts.”
“Which will clean up the mess. The rest is all about getting information. I’ll have the bookkeeper send out a letter just to the BMI crowd.”
“Do it, sweetheart,” Max agreed.
“It may wake up an innocent claimant, or one that’s not so innocent, and it won’t take more than a couple of hours of work, so it’s cost efficient.”
“And we don’t have to involve the whole firm in it.”
“Exactly. They’re nervous enough already.”
Chapter 27
Beth prepared a petition to accompany the proposed order, asked Mel Bergeraque, a litigation partner, to review it, and had a paralegal deliver it to the courthouse the following morning with instructions to wait until it was signed by a judge.
At the same time, Max called Tad MacMillan at the Antigua West Bank and arranged to have the $1.5 million transferred back up to New Y
ork. As soon as the order was signed, the funds were deposited with the county clerk so that the firm no longer had any control over the money and anyone claiming a right to it would have to petition the court to recover it.
Before the day was over, Beth had drafted a letter generically addressed “Dear Clients and Suppliers of the Firm.” She limited its distribution list, however, to members of the BMI Alumni Association. The letter mentioned the unexplained deposits into their firm’s trust account and asked them to send her a schedule of all their bank transactions with the firm since the first of the year.
The letter concluded by advising all recipients that if they had made any transfers to the firm in error and wished to reclaim same, they would need to contact the New York county clerk’s office where the funds were now being held, subject to further court order. She hit the SEND key and the letter was on its way.
Beth received the first replies before she left for the day. As she began opening them, it became clear that they were just what she had anticipated from alumni who had no interest or involvement with Gartenberg or his plans to build housing on the BMI campus. In one form or another, the replies simply thanked her for the notice and advised that the sender had never sent a remittance to her law firm.
Then the exception arrived, and it was addressed directly to her:
Dear Beth Swahn, Esquire:
Your firm must forthwith discontinue its appeal from the decision of the Bordentown Planning and Zoning Commission. If the tunnels become accessible to the public, you and your father will be held personally responsible and the consequences to both of you will be serious. You must also immediately return the stolen $1.5 million dollars to the undersigned. If you fail to do this forthwith, you and your father will pay a great penalty.
Squad Leader of the Tunnel Rats
Alumni Association Page 7
