Shadow Account

by Stephen Frey

  “People die all the time.”

  “Not after falling from a fire escape. Or being pushed,” Meeks added.

  Conner said nothing.

  “Did you hear about that incident?”

  “No.”

  Meeks hesitated. “You sure you don’t know anything about Miss Shaw’s whereabouts? She’s been gone for three days now, and I’m no closer to figuring out where she is than I was last time we talked. Pretty soon I’m going to have to recommend to her parents that they go to the police. And I’ll have to tell them that the last place I can trace Miss Shaw to is your apartment. Sorry, but that’s all I’ve got. It won’t look good for you. If there’s anything you can add to what you’ve told me, it would be wise to tell me now.”

  The ring was three carats, but it was a piece of junk. He could tell Meeks that and maybe get him to focus on Todd as a suspect. The thought had occurred to Conner several times after finding out yesterday the diamond was of such poor quality. But the guy was supposed to have been traveling in Europe Wednesday night. He had an airtight alibi. “No. I’ve got nothing to add.”

  Meeks nodded. “Hey, it’s your funeral, not mine.”

  Conner watched the private investigator walk away, heart pounding.

  “Hey!”

  Conner whipped around. Amy had sneaked up behind him and grabbed his shoulders.

  “What’s wrong with you?” she asked, laughing.

  “What do you mean?”

  “You look like you just saw a ghost.”

  He was about to answer when Amy spotted two golden retriever puppies rolling around on the grass a few yards away.

  “I love puppies,” she said, scampering toward them. As she did, her backpack fell to the ground and spilled open.

  Conner’s eyes raced to the contents, now spread out on the grass. Makeup, a camera, a small pack of tissues—and a dark blue baseball cap with a red insignia.

  Lucas stared at the young analyst standing in the doorway. “I think I may have found something.” Words he’d hoped he would never hear. Even more so after his conversation with Cheetah.

  “Can I come in?” the young woman asked.

  “Yes, of course.” He motioned for her to put the document she was holding down in front of him.

  “It’s right here,” she explained, pointing at a chart on the page.

  “What is?”

  “Option grants. Pretty big ones, too.”

  “What are we looking at?” Lucas asked, squinting. He could barely make out the tiny black print.

  “It’s a proxy statement,” she explained. “A communication to company shareholders describing the issues up for vote at the annual meeting.”

  “What did you find?”

  “I’ve been going through this thing all morning. I just about had to use a magnifying glass to make out these tiny little numbers. Anyway, I finally found this thing way in the back.”

  “What thing?”

  “I compared what was in this chart in the proxy statement to the guidelines you gave us,” she said, placing a piece of paper down beside the statement.

  The handwriting on the paper listed the company’s board members, and next to each name that individual’s reported share and option holdings. Lucas had listed every board member so she wouldn’t suspect that he was investigating only government officials. He’d done the same thing for each of the other forty-two companies. In the case of government officials, Lucas had identified shareholdings as each official had reported them to the government accounting office.

  “Look at this,” the young woman said, pointing at a page in the proxy statement. “Four years ago a board member named Alan Bryson received options to purchase up to fifty thousand shares. Which matched the information on the list you gave me,” she said, now pointing to the paper Lucas had provided her. “And probably wouldn’t be a big deal except that another entity, the AB Trust, listed in another section of the statement, was granted options to purchasefive hundred thousand shares .” She flipped forward in the statement a few pages and pointed again. “I’m going to call the company Monday morning and ask for more details on this AB Trust. I’ll bet it’s controlled by Alan Bryson.”

  Lucas squinted at the tiny black print, the pit in his stomach growing larger by the second. Until it felt like it was the size of a basketball. There was no need to call the company. He had no doubt that the initialsAB stood for Alan Bryson. “So you think this guy got himself options to buy another five hundred thousand shares through this trust.”

  “Yes.”

  “What were the option prices?” Lucas asked, glancing at a loose-leaf pad on his desk.

  “Three dollars and fifty cents a share,” the young woman answered. “For both the fifty thousand options Alan Bryson got personally, and the five hundred thousand options the AB Trust got. That’s another clue. They both got the same strike price. Both Bryson and the trust could buy shares of the company at three dollars and fifty cents apiece any time they wanted.”

  “It would be interesting to know where the price of this company’s shares are trading.”

  “Sixty-four dollars.”

  “How do you know?” He hadn’t yet had time to equip the office with Internet access.

  “I called a friend of mine over at Georgetown University. She looked the price up on the Web for me a few minutes ago.”

  Sixty-four dollars a share. Alan Bryson could buy shares anytime he wanted from the company at three and a half bucks, then turn around and sell them right away at sixty-four. The gain would be 550,000 shares multiplied by $60.50 a share—the difference between the $3.50 strike price, where Bryson could buy the shares from the company, and the current trading price. It was almost thirty-five million dollars’ worth of option value.

  “You’ll also need to find out where the shares were trading when the company granted these options.” Maybe there was still hope, Lucas thought. If the built-in gain wasn’t that big at the time the options were granted, then the press would have a hard time making a major story out of this. But if the immediate gain was big, then there would be a problem.

  “Thirty-three dollars a share,” she said, her eyes dancing. “I got my friend to run a historic search and find that out, too.”

  Lucas glanced at the paper of the loose-leaf pad on his desk again, specifically at the lines listing Bryson’s holdings. Bryson had reported to the government that the option strike price on those fifty thousand options was thirty-fivedollars a share. He’d claimed to the government that the options were out-of-the-money at the time of the grant. That the price at which he could buy shares wasabove the then current trading price. In which case he wouldn’t have had any immediate gain if the shares were trading at thirty-three when the options were granted. But he’d lied.

  Lucas’s expression turned grim. Four years ago, just before Alan Bryson had joined the president’s administration, this company had handed him $20 million. The grant was worth nearly double that now because the share price had increased. But even back then, the grant had been huge. Now the question was, why? Why had Secretary Bryson received such a huge amount of money and why was there such a gross inaccuracy on his report to the government? Had it just been an oversight? Had he meant to put down $3.50 as the strike price and inadvertently omitted a decimal point? That was hard to believe. It was starting to look like Alan Bryson had something to hide.

  “This is interesting,” the analyst spoke up.

  Distracting Lucas from thoughts about how he was going to handle what he had just learned. “What is?”

  “The company’s annual report indicates that Mr. Bryson was a member of the board’s audit committee.”

  “What’s an audit committee?” he asked.

  “Corporate boards typically have subcommittees that are responsible for specific tasks that they report to the full board about on an annual basis. Sometimes more often. Executive compensation, for example. You don’t want the senior executives of a company deciding what t
heir own pay will be. So a subcommittee of the board reviews the performance of the five or six most senior executives. Then recommends salary increases and bonuses to the full board for their approval.”

  Lucas nodded. “I see.”

  “Another common subcommittee is the audit committee. Once a year several members of the board sit down with the company’s outside auditors to discuss with them how they went about scrutinizing the company’s books. To make certain that the auditors are doing what they’re supposed to do.” She pointed at the page again. “That year the three audit committee members received a lot of options. I’m going to check the following years to see if the pattern continued.” She hesitated again. “It seems kind of suspicious. Maybe they got all these options in return for covering up some kind of inaccuracy in the way the accountants audited the company. Maybe we can nail these guys.”

  “Easy there, pardner,” Lucas warned, trying not to seem overly concerned. “Let’s not get ahead of ourselves.”

  “I don’t know, Mr. Reed. Seems pretty suspicious.”

  “What company is this?” he asked, flipping the proxy statement closed so he could see the name on the front page.

  “Global Components Incorporated.” She tapped him on the shoulder. “Hey, I recognize Alan Bryson’s name. He’s the treasury secretary.”

  “I had Art Meeks approach Conner Ashby again this afternoon.”

  “And?”

  “He said Ashby’s a cool customer.”

  “We already know that.”

  “But Meeks made it clear to Ashby today that he was gonna go to the cops soon.”

  “So there is extreme motivation. We should expect immediate action.”

  “Yes.”

  There was a short pause.

  “There is one piece of challenging news.”

  “What?”

  “The woman screwed up.”

  “The woman?”

  “Amy Richards.”

  “How?”

  “After all my warnings about being careful, she had an article in her backpack Ashby had seen when we had her appear outside the Merrill Lynch building Thursday. A baseball cap. The backpack spilled and he saw it. He picked it up and took a good hard look at it.”

  “That stupid bi—”

  “I’ve already spoken to her about it.”

  “But the damage is done.”

  “That was a mistake. No doubt.”

  “Should we remove her?”

  “No. We need her to stay close to him. We have to have as many people as possible feeding us information on him at this point.”

  Today was the twenty-eighth. Lucas was positive. But he checked the date on his watch to make certain. Then he opened the white, letter-sized envelope and checked its contents. Again, just to make absolutely certain. The ten of diamonds. An even-numbered card for an even-numbered day of the month. He glanced around the Office Express store to make certain no one was watching. Then he licked the back of the envelope, sealed it, and slid it into the mailbox.

  12

  Conner donned wraparound sunglasses as he moved quickly down the stairs in front of Gavin’s apartment building. It was another cloudless afternoon in Midtown Manhattan. He stepped to the curb and raised his hand. Moments later a cab swerved toward him.

  “Eighty-ninth and Second,” he ordered, easing into the back of the taxi.

  “Yes, sir.”

  And they were off, squealing away from the sidewalk.

  Gavin had gone out to East Hampton last night, leaving a few minutes after Conner returned to the apartment from his afternoon with Amy in Central Park. He’d asked Conner to come with him to the mansion, apparently no longer angry about Conner taking Monday off. But that was Gavin. Over things quickly.

  Conner had turned down the invitation to go to East Hampton. He had things to do. Spotting that familiar dark blue cap fall out of Amy’s backpack yesterday had set off the alarm again. He was going to check out the restaurant where she claimed to waitress to make sure she’d pulled that double shift last Thursday. Then he was going to see Jackie.

  He gazed out the cab at the crowded sidewalks as the cab sped north on Third. He’d tried to check out the stack of bills in Gavin’s kitchen drawer again last night after Gavin left, but it was gone.

  The taxi pulled to a stop in front of the Wild Irish Rose. Conner thought this was the restaurant Amy had mentioned at the softball game yesterday just as the crowd had roared. Just as Art Meeks had appeared. But he wasn’t certain. He should have asked her again after Meeks left, but he’d been too distracted by what the private investigator knew. And by what would happen if Meeks went to the cops.

  Conner paid the cabbie and headed for the restaurant.

  “Table for one?” asked a harried-looking waitress, grabbing a menu from a pile on top of the maître d’ stand.

  “No,” he answered loudly. It was noisy inside the restaurant. “I just want to ask you a question.”

  “Make it quick. We’re busy. Sunday brunch, you know.”

  “Is there a waitress here named Amy Richards? She’s tall and blond.” He held one hand up to the top of his shoulder. “I think she started working here a couple of weeks ago.”

  “Not that I know of.” The woman tossed the menu back on the stack. “Hey, Angela,” she yelled at another waitress moving past, a heavily laden tray balanced on one shoulder. “Is there a girl here named Amy?”

  “No,” came the terse reply from behind the tray.

  The waitress shrugged. “Sorry.”

  Amy had claimed that the restaurant where she had taken her new job was only a few blocks from Ninety-first Street and Second Avenue—where Conner had run into her Wednesday night. So he spent the next two hours systematically checking as many places as possible in an area bounded on the east and west by First and Third Avenues, and on the north and south by Eighty-eighth and Ninety-third Streets. But no one had hired a waitress named Amy Richards.

  A few minutes before four he caught another cab and headed down to the Empire State Building.

  He knocked on Jackie’s office door, and it swung open right away. She’d been alerted by the security people in the lobby that he had arrived.

  “Four o’clock straight up,” she said approvingly. “Right on time. I like that about you. Sometimes you don’t return my calls for days, but you’re usually on time when we get together.”

  Conner hadn’t heard her. He was gazing at her and smiling. He’d expected her to be wearing something casual, this being the weekend. Dressed in a T-shirt and jeans, maybe, as Amy had been yesterday. Instead, Jackie was wearing a sundress that exposed her smooth brown shoulders and shapely legs. “Wow.”

  “What?” she asked innocently.

  He nodded at the dress. “You look great.” The faint scent of a pleasing perfume drifted to his nostrils.

  “Oh,” she said, twirling quickly left and right so the dress flared high on her legs. “Well, you told me I never wore dresses, so I figured I’d surprise you.”

  “Very nice,” he complimented, his gaze moving back up her body. His smile faded. “You okay?” He’d seen sadness in her eyes.

  “I’m fine,” she said brusquely, turning and heading for her desk.

  He’d known her long enough to recognize that something was wrong. “Jo, come on.”

  “I’m fine,” she repeated firmly, sitting down. “Now what’s all the mystery about? Why do you need to meet with this Vic Hammond guy about Global Components so badly? And why do you need to know if there’s a junior person on the audit named Rusty?”

  “I’ve been thinking a lot about this,” he said, sitting down, “and it might be better if you don’t know.”

  Jackie shut her eyes tightly. “That’s not fair, Conner. You want favors from me but you don’t want to tell me what’s going on. No way.”

  He stared at her, unsure of what to do. It could be so dangerous for her to know anything. “First things first. What’s the thought of the day?”
<
br />   “Don’t be afraid to say the wordproblem ,” she answered immediately, ready for the question. “So many people say the wordchallenge in conversation when what they really mean to say is the wordproblem . It’s so irritating.”

  She was right, Conner realized. Especially in the business world.

  “Don’t fall into that habit,” Jackie advised. “Challengedoesn’t have the same meaning asproblem . Never hesitate to say the word. Admitting you have a problem is the first step in solving it. Without making the admission, you’ll never reach a resolution, because you’ll never have conviction.” She pointed at him. “Now. Tell me what theproblem is.”

  “Well—”

  “And before I forget,” she interrupted, “you have an appointment tomorrow morning in Washington with Vic Hammond at eleven o’clock. Remind me to give you the Baker Mahaffey address down there before you leave.”

  “Thanks, Jo,” Conner said gratefully. He was still bothered by the sadness in her eyes. “You sure you’re okay?”

  “Just tell me what in the hell is going on.”

  He glanced down. It was the first time he could ever remember hearing her curse. “Wednesday evening I got an e-mail on my home computer that wasn’t meant for me,” he began. The same way he had with Gavin Thursday morning at the mansion. “It was sent by someone named Rusty to someone named Victor and it described a public corporation, code-named Project Delphi, that was playing games with its earnings per share. Basically committing fraud.”

  “Which was why you wanted me to explain how companies can manipulate their earnings.”

  “Yes.”

  “Did you save the e-mail?”

  “I would have.”

  “What do you mean, ‘would have’?”

  “I left my apartment a few minutes after the e-mail arrived. When I got back, I surprised this guy who’d broken in.”

  “My God, what did you do?”

  “He had a gun, so I took off down the stairs.”

  “Conner!” Jackie gasped.

  “He chased me, but I got away. Then I found two cops and we went back to the apartment. When I checked my computer, that e-mail had been erased.”