by Jeff Siebold
“Interesting. Are there other ways to launder money using cryptocurrency?” asked Clive.
“There are many,” said Small. “It seems as if there’s no end to the creativity of the criminal mind.”
“Next step?” asked Zeke.
“Francis Donovan will be calling to set up a meeting,” said Small. “She’s in charge of our Multiple Apprehension Task Force.”
* * *
“So essentially, this money laundering is going on all around us, all the time,” said Zeke. “And it runs contrary to logic.”
“I knew it was a big operation, but I had no idea. What did agent Small say? Between 800 billion and 2 trillion dollars laundered worldwide each year?”
Zeke nodded. “And they’re losing money on every dollar.”
“So on the low end, they give up what, about fifteen percent?” asked Clive.
“And up. The lower the fee, the riskier the laundry, I’d say,” said Zeke.
“How high does it go?”
“Maybe 30 or 35%.”
“That’s a lot more than a cottage industry,” said Clive thoughtfully.
“Sure. But if it’s originally drug money or money from illegal activities, it can probably be traced back to the crime. Once it’s laundered, there’s almost no chance of anyone proving its source,” said Zeke.
“So, going back to the pawnshops. They’d need to be running, what, a couple hundred thousand dollars a month through a shop?”
Zeke said, “They’ve got to be careful that their gross revenue looks realistic. At the high end of realistic, I’d think.”
“Hmm,” said Clive.
“So they run an extra hundred thousand a month through the pawnshop, and the owner gets, what, up to thirty thousand of that? Each month?” said Zeke.
“Then the bad guys get an untraceable $70,000 and they stay out of jail. And there’s no way to find the source of those funds.”
“How many pawnshops in this franchise?” asked Zeke.
“There are 134 between here and New York.”
“So D.C., Baltimore, Philly and New York?” asked Zeke.
“For this franchise, yes,” said Clive. “But you can expand the operation pretty quickly with a guaranteed $30,000 a month. You can’t open the doors fast enough.”
* * *
“Electronic money laundering?” asked Kimmy. She and Zeke were sitting in Clive’s D.C. Office, waiting to meet with him.
Zeke said, “That’s where the bulk of the money cleaning happens. Online.”
“Like in the ‘Dark Web’?” Kimmy smiled. She stood up and went to the window, looking out on Pennsylvania Avenue. Foot traffic was brisk.
“No, actually it’s simpler than that,” Zeke said. “There’re several ways to do it, depending on who the parties to the laundering are.”
“Do tell,” said Kimmy, still watching pedestrians and bouncing slightly on the balls of her feet.
“Well, on a small level, let’s say I’m selling something illegal. Maybe drugs,” said Zeke. “And I’m selling them to you. So, I might use diversion. I set up an account on eBay and list something for sale. Say a music CD, something innocuous.”
Kimmy was nodding.
“And I list it for, say, a minimum bid of $100. Whatever the cost of the drugs you want to buy.”
“OK…”
“But the price tag is a lot more than the CD is worth. So no one else actually bids on my listing. I send a link to the listing to you, or I tell you about it, and you get online and buy the CD. You pay the $100 for it,” Zeke continued.
“The $100 goes through PayPal, then, when I buy it,” said Kimmy, thinking ahead.
“Right, and eBay and PayPal take their cuts. Small percentages.”
“And it looks like a legitimate transaction,” she said, looking at Zeke.
“Sure, except the price is too high. The art of the deal is to set the price high, but not high enough to alert anyone.”
“OK, and the drugs?”
“Well, to keep it looking good to anyone watching, after I receive the payment, I’d send you the CD through the mail. Then we’d meet up somewhere and exchange the drugs,” he continued.
“Who’d be watching?” asked Kimmy.
“Law enforcement,” said Zeke. “Local and state, primarily, because this type of an operation would generally take place at the local level. It’s much tougher to get your drugs to you if you’re across the country. Plus consider the time it takes to set something like this up, if you’re dealing with a thousand buyers. That wouldn’t be practical either.”
Just then, Clive opened the door and stepped into the room.
“Bloody bureaucrats,” he muttered. “Sorry for the delay. I was on with the FBI Training Facility in Quantico. They want us to run background checks on their latest class of recruits. They think they may have a dirty agent. But no one wants to risk being wrong.”
Clive hung his suit jacket on a wooden hanger, shot his sleeves and sat in a leather wingback chair across from Zeke. “What did I miss, then?”
“We were discussing money laundering,” said Kimmy. She came back to the grouped chairs and sat in one, pulling her legs up under her.
“Yes, well,” said Clive, “it used to be pretty straight forward. Open a restaurant and deposit some of the dirty cash with the daily receipts at the bank. Well, you could do that with just about any cash business, I suppose.”
Kimmy nodded.
“Not so much anymore,” said Clive.
“Seems that there are two kinds of launderers,” said Zeke. “The legitimate cash businesses that mix dirty money in with the clean, and then the pros who handle large volumes of dirty money for a fee. Nationally and internationally.”
“The Pawn 4 All thing is the former, I’d guess,” said Kimmy.
“But on steroids. The FBI says the pros, the high-volume guys, are international; and they move the money around the world using cryptocurrency and electronic transfers. Plus, don’t forget the offshore banks in Switzerland and Grand Cayman and a few other places. Total privacy on transactions.”
“So you somehow change your cash into electronic money, then deposit it offshore or spend it to clean it,” said Clive.
“But the volume they need to move demands professionals,” said Zeke. “It’s a full-time job for a small organization.”
“Can’t it be intercepted? Like if it’s converted to Bitcoins?” she asked.
“No, they use Blockchain technology to protect it. Very safe. It’s there, and you can see it, but only the owner can do anything with it,” Zeke continued. “And you never take possession.”
Clive nodded.
“So what’s the plan?” asked Kimmy. “What did the FBI say?”
“They’re looking to do a coordinated takedown of most of the Pawn 4 All stores and shut down the entire operation.”
“When are we meeting with them?” asked Zeke. “I mean ‘her.’ Francis Donovan of the FBI, right?”
Clive looked at his watch. “Yes, Francis will be calling us pretty soon, I imagine. Later today.”
* * *
“How do you propose that we do this?” asked Clive.
The four men and a woman sitting around the table were from the FBI Multiple Apprehension Task Force tactical command and were experienced in wide-scale coordination of simultaneous apprehensions. They were a self-contained unit, called upon to run multiple arrests with no intelligence leaks, which resulted in the maximum return on the FBI’s manpower and financial investments.
“Three rules,” said the woman, who’d introduced herself as Francis Donovan. She looked to be in her late forties and had pockmarks along her jawline. Her hair was pulled back tight, her skin was coarse and she wore what looked like a man’s double-breasted suit jacket with a white shirt. She looked around now to be certain she had everyone’s attention.
“Three,” she repeated. “First, we organize it all here, in house.”
“OK,” said Clive. He an
d Zeke were at FBI headquarters in Washington, D.C., at the invitation of Francis Donovan and the Assistant Director. The A.D. was not in the room.
“Then we pull in law enforcement without letting them know they’re part of a larger operation. We want them to focus on their task at hand, not the bigger picture.” She paused, probably for effect.
“And third?”
“We move quickly to take them down, cut off their communications and isolate them in local jails or detention facilities. If we do it right, we’ll get the best intel.”
“You’ve done this before,” said Zeke.
“We have. We employed the same strategy and tactics closing down everything from a group staging dog fights to one selling snuff films on the dark web. The bad guys are becoming more and more decentralized, so our tactics have morphed as well.”
Zeke nodded.
“In this case, we’ve identified most of the likely culprits. Low budget pawnshops that are outperforming their competition. Both their geographical competition and the industry averages for their business,” she continued.
“You pull their income and sales tax filings and their bank records? And you compare them with other businesses in the immediate area, as well as other pawnshop norms, to look for anomalies?” asked Zeke. “Businesses making too much money for their demographic and their industry?”
“Exactly. Then we develop targets and look at them more deeply for common factors,” she said.
One of the agents, a tall, thin man of about forty named Addison, added, “The franchise thing actually makes it easier. In this case, we found anomalies in pawnshops and tracked them back through their franchise arrangement with Pawn 4 All. Almost every Pawn 4 All franchisee in this area is tracking with the pattern. Which means they’re all laundries.”
“Possibly owned by someone who needs to launder their money,” added Clive.
“Possibly so,” said Francis Donovan.
“You want us to work from the top?” asked Clive. “Get close to the people in charge at Pawn 4 All in preparation for the FBI action?”
“We do,” said Donovan.
“I’m not certain they’re looking to franchise to people they don’t know,” said Zeke.
“It might give you a chance to see what’s going on, to get a sense of who the players are,” said Donovan. “Whether they accept you will depend, in part, on how much pressure they’re under to expand the operation.”
“That’s true. We can approach as an interested potential franchisee. Maybe meet the people who are orchestrating all this,” Zeke said. “See where we can take it.”
“Good,” said Donovan. “Everything helps.”
“You’re playing the long game with this,” said Zeke. “But the longer you stretch this out, the higher the odds of a leak.”
“Typically true,” said Donovan. “But in this case, we’ll take our time. The only ones in the loop are the five of us at this table. And now you two.”
* * *
“What do you think happened to Bart Conrad?” Clive asked Zeke after they’d left FBI headquarters. “Why would someone kill him?”
“Not sure,” said Zeke. “He was a franchisee, and we’re assuming that he was making an extra, what, thirty thousand a month running money through his operation. Very local and very small, actually. Bad neighborhood, bars on the windows, mostly walk-in traffic…”
“Druggies and blaggers, I’d think,” added Clive.
“…but the business wasn’t of the size and scope to make Conrad dangerous to anyone. Just a sleaze being paid more than he was worth to clean some cash. Probably for the mob.”
“Well, he got on the wrong side of someone,” said Clive.
“It wasn’t random,” said Zeke. “The FBI said money was transferred in and recorded as if sales had been paid for in cash, at prices too high. And the money was deposited in Conrad’s bank.”
“Directly to the bank, then?” asked Clive.
“Directly to the bank by the mob or the drug guys. The guys with the criminal enterprise. Less chance of someone getting greedy that way,” added Zeke.
“And Conrad distributed it?” asked Clive.
“Paid falsified invoices and faked property redemptions to receive the cash,” said Zeke. “According to the FBI guys.”
“Property redemptions? You mean pawned items?” asked Clive.
“Yes, they kept a record of nonexistent items that were pawned and then supposedly redeemed.”
“And for that, Conrad netted an extra thirty thousand.”
“Each month,” said Zeke. “Like an annuity.”
“So what do we do next?” asked Clive.
Chapter 7
“The Bart Conrad thing is a bad omen,” said Chester Knowles.
He was a tiny man with small features and a rigid bearing that made one think ‘Napoleon Complex.’
“And they made it look like a suicide, no less,” he continued.
Jack Thurmond, his CFO, sat across the desk and nodded at Knowles. “Ugly business.”
“Skimming,” Knowles continued as if Thurmond hadn’t spoken. “He was doing as well as he ever had, and then he goes and skims the money.” The small man shook his head, lost in thought.
Gently, Thurmond said, “The numbers, boss…”
With a small shutter, ending one thought and starting another, Knowles refocused. “Yes. What do we have, Jack?”
Thurmond cleared his throat and looked at his notes.
“We’re moving about twelve million a month, with twenty-five to thirty percent costs,” he said. “A net of a little more than a hundred million a year, roughly.”
“Just the East Coast operation?” asked Knowles.
“Yes, from D.C. up to New York City. Over 130 locations,” said Thurmond. “But not Miami or Atlanta or Charlotte or Jacksonville or Richmond. We have more opportunities in those cities.”
Knowles was nodding. “The franchise thing was smart.”
“Like printing money,” said Thurmond with a slight smile that disappeared almost immediately. “We just need to keep expanding that part.”
“Indeed we do,” said Knowles. “How quickly can we get more franchises set up?”
“Our team is setting up locations as quickly as is feasible,” said Thurmond. “We’re also looking at some buyouts of existing shops to turn them into franchisees.”
“Can we accelerate the growth?” repeated Knowles. “There’s pressure to do so.”
“I’d suggest slow and steady,” said the accountant. “We need to build this carefully.”
Knowles nodded and thought, I’m not sure we have time for that.
* * *
“Where will we start?” asked Tracy.
Zeke shook his head. “It’s been thirty years and several hurricanes since my parents died,” he said. “Everything’s changed in the Keys.”
“Talk about a cold case!” said Tracy. “But it’s important, Zeke. I think we need to do this.”
They were chatting on the phone, Zeke in his hotel room at the Harrington, a D.C. hotel located a block from Clive Greene’s Agency offices, and Tracy sitting on the couch in her Midtown Atlanta condominium. It was Sunday afternoon and both cities seemed to be resting up for the week ahead.
“I worked cold cases for a while when I first joined the Secret Service,” said Tracy. “They were actually old counterfeiting cases, but there’s some similarity, I’d think.”
“In the process, you mean?” asked Zeke.
“Yes. Typically no real forensic evidence. And usually you can’t find the witnesses. They’ve moved or died or just disappeared. When you do find someone who was there when it happened, their memory of the event is usually fuzzy. Or else they’ve thought about it for so long that they’ve built a scenario that may not be accurate. Mind tricks, you know.”
“Well, we have no evidence in this case,” said Zeke.
“Was there an investigation into the explosion?” asked Tracy.
“I’d think so,” said Zeke. “I remember the Sheriff’s Deputies coming around for days after the explosion, interviewing people at the marina and the staff. And I know the firemen went over what was left of the West Wind very carefully before they allowed it to be towed off.”
“Tell me what happened again,” said Tracy. “Can you, or does it hurt too much?”
“It hurts. But, yes, we need to revisit it.”
“Take your time,” said Tracy. “Let me put you on the speaker.” She had a pad and pen in front of her on the table.
“We lived aboard the West Wind. It was a 52-foot Mandarin motorsailer that accommodated our family easily. Dad docked it at Boot Key Marina in Marathon when we weren’t at sail.”
“What happened the day of the explosion?” Tracy asked. “I know you’ve told me some of it, but let’s start over, at the beginning.”
“Sure,” said Zeke. “We’d just returned from a cruise of Florida Bay. We actually did that a lot back then. Took several days and cruised along, stopping to fish and swim.”
“Nice,” said Tracy.
“It was. We had just come back into the marina and I jumped off the boat and ran to the dock store to buy a soda. That was a big treat for me back then.”
“What year was this?”
“Late 1980s,” said Zeke. “Actually, it was May 12, 1989 when all of this happened.”
“And while you were in the store…”
“I was buying the soda when there was a noise like a thunderclap and the windows of the little store blew out from the pressure of the explosion. It was horrible. The top half of the boat just disappeared. It burned for hours.”
“Had anything happened on your way back into the marina that day?” asked Tracy. “From Florida Bay, I mean.”
Zeke thought for a minute. “Not really. We did stop to help a fisherman who was stuck. He’d been fishing in the shallows and ran aground when the tide went out.”
“Really?”
“We were always doing things like that,” said Zeke. “My folks were practical, but they had big hearts.”
“There’s got to be a police report about the explosion,” said Tracy. “And something from the Fire Inspector. Maybe an arson report?”
