“And Wyatt?”
“Wyatt lives at home.”
I nodded. I might be saying the same of my son for decades to come.
“These missing funds? How much are we talking?”
“Three billion dollars,” he said with somewhat forced casualness.
If it was meant to impress me, it worked.
“You know,” I said. “I might just take a short glass of scotch if it’s still on offer.”
“Or so.” Virgil smiled and signaled for a waiter. “The Feds believe they have accounted for all of my father’s misappropriation of funds. The ‘missing’ forty billion you have read about in the paper isn’t missing. It never existed.”
I understood. Before becoming a guest of the federal prison system, I had pled guilty to a similar fraud, though on a considerably smaller scale. The trading losses I had covered up had been recouped many times over. It was the falsification of trading profits that had done me in.
“They have also followed the paper trail of another twelve billion, which is, I am afraid, quite gone. My father maintained both a lavish lifestyle and a generous philanthropic image. The cost of fuel for his private jet is no more recoverable than the forty million he spent building a hospital in Puerto Barrios in Guatemala.”
“And they can’t account for a measly three billion? Sounds like a rounding error.”
Blake was following the conversation with a preoccupied smile—I imagined that he had heard it all before and he was more concerned with protecting us from the deranged lynch mobs that might appear out of the woods, intent on taking revenge for their depleted 401(k)s. Everett, on the other hand, was practically drooling on my shoulder at the smell of so much unattached money still out there.
“The firm executed hundreds of international wire transfers a day. It has taken the Feds months to sift through it all. I have looked at their numbers, and I’m convinced. Somehow, my father managed to squirrel away as much money as a third-world dictator.”
The waiter set down the scotch. I didn’t want it anymore.
“And you think I can find it? An army of lawyers and accountants have come up bust. You’ve got Blake here, and his musclemen, who can probably twist any arms that need twisting. What do I bring to the table?”
Virgil was unfazed. He had his answer all prepared. “Two things. First, you have a unique perspective—one that cannot be easily learned.”
I was a crook. Had been. Past tense. I tried not to let the reference rankle. But Virgil surprised me.
“You have seen this kind of thing from both sides, and you have had some success in uncovering obscured monetary trails.” He smiled as though assuring me it was a compliment. “And second,” he continued, “people will talk to you. At your level in this business, there are not three degrees of separation between any two major players. And those who know something may not know that they know it. Neither threats nor torture will work. They may tell you things that they would never say to an SEC lawyer. Things that would be meaningless to their spouse. Bits and pieces that will only have meaning to a man with your background.”
It was a long shot—a Hail Mary pass. The numbers were blinding. A one percent finder’s fee would set me and the Kid up for life. But I needed a paycheck, not another “maybe, someday, down the road.”
“I guarantee nothing and I get paid up front. I don’t work weekends, because I spend that time with my kid.”
“Not a problem.”
“Five thousand a day plus a one percent finder’s fee. I’ll get started tomorrow, but I have a few things scheduled over the next week. You’ll have me full-time by Wednesday.”
Virgil gave a slight frown. “But you will begin immediately?”
I nodded. “You only pay me for when I’m working.”
He shook his head. “Do not misunderstand. I am not questioning your professional behavior, but there is some urgency to this affair. I hope you understand that. If the Feds find the money first, we have no bargaining power.”
“Which leads me to the big question. What do I do when I find it? It’s hidden now; I don’t know that it stays that way after I go poking around in all the back closets. It will be hard not to draw attention to myself.”
“Again, not a problem. But we do need to get to the money first. Then we can make our bargain with the authorities, turn it over, and all go on with our lives.”
The size of the deal had startled me, but this was a deeper shock. Right up until that moment I had assumed I was dealing with fellow crooks. It had never occurred to me that Von Becker’s son was willing to hand over three billion dollars to the courts, for the chance of clearing his family name. I wasn’t so sure I entirely believed it.
Virgil saw the look on my face.
“I am not a saint, Mr. Stafford. I know what three billion dollars can buy. But what it can’t buy is freedom from looking over my shoulder for the rest of my life. If I can persuade the Feds—and the press—that I am serious about making amends for my father’s actions, then I can go about my business. My children will have sleepovers at their friends’ houses. My wife can go back to volunteering as a docent at the Met. My brother gets to play with his boat. My sister, who was the only one of us not to abandon our father—she visited him in jail almost every day—is now a virtual prisoner herself, unable to step outside the compound here. She gets her life back. Do you understand?”
I did. Maybe not one hundred percent, but I got it. I often felt just the same. Anything for a quiet life. And he had a point. Handing over three billion dollars of the money his father had stolen would win him kudos in the press. He could negotiate a clean slate from the regulators. He would go from being the son of a pariah to becoming a role model. From Page Six innuendos to front page applause. It was a smart move.
“And, of course, I get to run the whole firm before I turn forty,” he acknowledged with a sly smile.
Of course.
“As for the performance bonus,” he continued. “The money is not mine to grant. If I were to give you thirty million dollars, the bankruptcy trustee would come after you. With a federal judge behind him. You would not want that.”
“Are you looking to negotiate? Make a counteroffer.”
“A counterproposal. If this works and the firm survives, I am prepared to offer you a permanent, lifelong consultancy with the firm. One million dollars a year for life. A retainer. There will be times when I will need an objective point of view. Are you interested?”
“And if the firm doesn’t make it?”
“I will add your name to the list of unsecured creditors. Are you a gambler, Mr. Stafford?”
“Only when I’ve got the edge.”
He gave a deep belly laugh. “Spoken like a trader. Do we have a deal?”
He was right. A lump-sum finder’s fee would be an anchor around my neck. Not only would the bankruptcy trustee be after me, so would the judge from my trial, demanding that I repay the firm I had defrauded—of half a billion dollars. And the IRS would jump on it, too. I might end up owing all three. One mil a year, however. As we used to joke on the trading desk, “Yeah, I could get by on that.”
“Make it nine hundred ninety thou. I want to stay out of that one percent bracket.”
“Done.”
“I’ll want to see the Feds’ case. Not the whole paper trail, just their conclusions. Next, I’ll need a list of your father’s friends. Anyone he might have talked to.”
“A list of his friends will be very short, but if I include close business acquaintances, it will be far too long.”
“Err on the inclusive side. I’ll know a lot of the names, and if I think they’re nonstarters, I’ll cross them off. And, finally, a list of all the employees, salaried or consultants or even outside counsel, that he met with, spoke with, or even rode the elevator with on a regular basis.”
Virgil loo
ked over. “Everett?”
He nodded. “I’ll have it all messengered over tomorrow morning.”
“Anything else?” Virgil asked.
I gave a half-nod, half-shrug. “It’ll come to me. I might need you to make a call for me to prod some of the more reluctant ones on the list.”
“Give Everett the names. I’ll take care of it. That it?”
Business was done.
“One more thing, though I really hate to ask. Can I get a ride back to the city?”
Back in the helicopter.
| 3 |
Later that evening, Roger and I were sharing a booth in the back of Hanrahan’s, our new friendly neighborhood watering hole ever since the old P&G had been forced to relocate six blocks uptown, losing both its clientele and its juju, and blinked out of existence in a New York minute.
Roger was a semi-retired clown—thirty-five years with the circus, three shows every Saturday and as many as could be booked the rest of the week. He did the circuit—Miami, Florida, to Bismarck, North Dakota, San Diego to Boston, living on a bus eleven months of the year—until he’d had enough and one day he just ran away from the circus. For the past ten years, he’d supplemented his pension by performing once or twice a week for anything from birthday parties to sales meetings to bachelor parties—his stage name was Jacques-Emo. His act could be corny and cute or ragged and raunchy, depending on the audience, and, I suspected, how much cognac he had consumed on the way there.
He was also my friend. We’d started as bar buddies—one drink’s distance from being total strangers—but my life had taken some unexpected turns. Roger had helped me through one of the rougher patches. So, despite his lack of almost any social graces, I knew that I could depend on him. And, over the last few years, I had come to value much more highly the few people who had stuck by me.
“So, ya trust ’em?” he said when I had finished telling him about my day.
“No.”
“That’s good.”
“But I can’t see how I get hurt.”
“Yeah, but they’re creative. Don’t forget.”
Roger had his usual snifter of cognac; I was drinking club soda. My stomach thought we were still on the helicopter, and I was due to pick up my son from his sitter shortly.
“I’d love to come up with something the Feds missed. It would be sweet.”
“Think you’ll do it?”
I wanted to. I gave it a moment’s thought. “No. The Feds have hundreds of people working on this.”
“So, you’re cheatin’. Takin’ these people’s money on false pretexts. No chance of getting them what they want.”
“Pretenses.”
“What?”
“False pretenses.”
“So, you admit it.”
“No.” I laughed. “I will do what I do and make sure they get their money’s worth. I just don’t know if I’ll find it.”
“I don’t trust ’em.”
“I don’t have to trust them,” I said. “I don’t even have to like them.”
“Watch yourself.”
“Will do.”
Roger knocked back the last drops in the small snifter and waved the empty glass at Nick the bartender, who gave a serious nod in reply.
“You don’t get a good pour here, you know?”
I had not noticed that. My usual was a bottle of light beer, and twelve ounces was twelve ounces. “Maybe you’re drinking faster,” I said.
He stared at the pressed-tin ceiling long enough that I was beginning to think he’d forgotten I was there.
“Roger?” I said.
“Yeah, yeah. Here’s what I’m thinking. You say this whole thing—the bank thing, or whatever—was nothing but a Ponzi scheme, right?”
“Classic.”
“Okay, so here’s my question. Who the fuck was this guy Ponzi?”
“Long version or short?”
“I hope that’s not a short-person joke. I’m very sensitive about my height.” Jokes about his stature were a staple of his act.
“Then you get the long version.”
“Nyah, just give me the broad strokes.”
“When’s the last time you had a broad stroke you?”
“Hey! I make the jokes here.”
PaJohn came over carrying Roger’s drink and his own scotch rocks. John was one half of a mature gay couple—PaJohn and MaJohn—both retired, who had been longtime regulars at the old place. PaJohn was drinking solo that week, as MaJohn was visiting his mother in Boca. They were rarely seen apart.
“Mind if I join you? It’s a Mets crowd at the bar today, and I don’t know if I can stand listening to any more tragic love stories.”
“Come, sit,” Roger said. “Jason’s about to tell me all about Ponzi.”
“When does John get back?” I said.
“He lands Friday at seven-thirty-two, and I am counting the hours.” He turned to Roger. “Carlo aka Charles Ponzi? Why do you want to know about him?”
“I didn’t say I wanted to know. What I said was, Jason’s gonna tell us.”
“Is this something you’re working on?” John asked me.
“I will be discreet,” I said. “I’m not breaking client confidentiality.”
“Then I am all ears. Though I warn you, I once got Carlo Ponzi as a Trivial Pursuit question.”
“Oh, yeah?” Roger challenged.
“Yes. And I got it right.”
“I never doubted ya.” Roger took a long swallow and shuddered. “That’s better. Ponzi. Let’s hear it.”
“Carlo Ponzi,” I began. “He was a small-time con man, a grifter, a thief. He spent time in prison here and in Canada before he came up with his one big-time game. It wasn’t original—he basically stole the idea. But, for that time, it was big. He stole fifteen million dollars, back in the day when that meant something.”
“When was this?”
“After the First World War,” PaJohn answered.
“That explains why I don’t remember any of this.”
“It’s like two hundred million in today’s money,” I went on. “The con itself was really pretty simple. People gave him money to invest. He promised them, I don’t know, twenty percent or something outrageous, for ninety days.”
“How was he going to make ’em that kind of money? That’s way too good to be kosher.”
“Exactly. But he had a good story. Back then, when people overseas mailed a letter to the U.S., they could include a return stamp issued in their own country. It was way cheaper than buying the stamps here.”
“Stamps? Postage stamps?” Roger said.
“Bear with me. The U.S. postal system had to honor these stamps, or, if the customer asked, redeem them—for the price that a U.S. stamp would go for.”
“Wait. We’re talking pennies here. Nickels, maybe. How’s he supposed to make any real money with this?”
“Well, he’s not. But all the immigrants he sold on this had pulled this off themselves, or knew someone who had. Mamma back in the old country sends a letter with the return prepaid—for a penny, let’s say—and her daughter in America cashes it in for a nickel. That’s a return of four hundred percent.”
“Stop!” Roger squawked. “You’re making me nuts. This is still all about pennies. How does this Carlo guy turn this into fifteen mil?”
PaJohn had been listening quietly, nodding occasionally, but here he cut in.
“I’ve got it. He never buys a stamp. Not one. What he does is, he sells the story. That’s the con.”
Roger looked to me for confirmation.
I nodded. “That’s it. He managed to convince people that he could do this stamp arbitrage on a huge scale and make a fortune at it.”
“Could he?”
PaJohn took a loud slurp of scotch.
“What?” Roger took offense.
“Not you,” PaJohn said. “I had dental work done this morning, and the novocaine hasn’t worn off yet.”
Roger appeared mollified. “So, could he?”
“No,” I said. “Not a chance. The post office made you fill out forms and only redeemed the stamps one at a time. It was okay for somebody trying to scam four cents—or even eight, or maybe twelve—but it would never have worked on a hundred bucks, much less a million.”
“But people bought into the story.”
“That’s the con.”
“So they gave him fifteen mil to hear a story.” He had it.
“He played it well,” I said in agreement. “The first guy in had ninety days to brag about it to all his friends. Of course, they had to get in on it, too. When the ninety days were up, the first guy got paid off. Full return of principal plus twenty percent profit. Of course, the profit was coming from the money his neighbors were putting in.”
“Sounds like you want to be the first one in on a deal like this,” PaJohn said.
“Maybe, but think for a minute. What does our guy do when he gets home? He brags to his wife about what an investment genius he is, right? Look at this, he says, waving the money in her face. I’m another J. P. Morgan.”
Roger burst out laughing. “Only she says, ‘You putz! Why did you take the money out? A real J. P. Morgan would have left it there and let it ride! You’re nothing but an ignorant greenhorn, like my mother always said.’”
“There you go. Who would take their money out when they’re earning those kinds of returns? Of course, if somebody needed the money, Carlo would pay it out. Cash. Why not? He was sitting on a pile of it. And every time somebody took money out, it just made the whole con seem safer. Better.”
“It stops working, though, the day everybody wants their money at once. Then he’s screwed.”
“That’s what caught Madoff, wasn’t it?” PaJohn asked. “The market dipped, dipped again, then dove. When the dust cleared, people asked for their money back. When they didn’t get it, they panicked, and when people began to panic, they all panicked at the same time.”
Mortal Bonds Page 3
