by Steven Gore
“Part of what Jack does is tax law. In fact, that has a lot to do with how Jack structured SatTek’s offshore companies. He set them up so that the profits from sales made outside of the U.S. wouldn’t be taxed here.”
“But he didn’t know they were all fake.”
Gage nodded and took her hand. “Of course he didn’t.”
“But-”
Gage held up his palm. “Let me finish.”
She nodded.
“Everybody knows what a burglary is. It’s just a matter of overlaying the law onto the facts. But tax law is different, it’s made by people testing limits. And that’s because there is no way the U.S. Congress or the Russian Duma or the Hong Kong Executive Council can anticipate all the inventive ways people do business.
“The problem is that Jack sometimes works the way he skis. Naively. Overconfidently. Always on the edge. And his clients are always trying to push him over, sometimes just by not telling him exactly what they’re up to. Then, if the client gets in trouble, he says, ‘My lawyer told me it was all right.’ It’s cowardly, but that’s what they do.”
“But this is a lot more serious than a tax case.”
“Yes.”
“How serious?”
Gage shrugged. “I don’t know for sure.”
“Graham.” Her eyes searched his face.
“I haven’t figured it out. The sentencing guidelines are about a thousand pages long. Then you need to do a lot of calculating. Points are added for some things, deducted from other things. And you have to figure in the amount of the loss. So it’s very complicated.”
“Graham, I need to know.”
“Courtney-”
“Please.”
Gage looked up at Faith. She nodded. Courtney needed an answer.
“If Peterson got the indictment he wants and Jack got convicted of everything, it would be kind of long…”
“How long is long?”
“Maybe about…” Gage hesitated, hating to say the words that would stab at Courtney’s heart. “Twenty years.”
Faith drew her close as Courtney’s eyes filled with tears.
“But I know he didn’t do it,” Courtney said, voice rising. “Jack doesn’t work for money. It’s all just play for him. You know that, Graham, don’t you?”
“I know that. So does everybody who knows Jack. But our first chance to prove it to everyone else may not be until the trial.”
Courtney lowered her head, then wiped her eyes with a tissue. Gage and Faith sat silently, not diminishing her by backtracking, and pretending the truth was otherwise.
After a minute, Courtney looked up. She took Gage and Faith’s hands. “Thank you.”
“This case has turned into a steamroller,” Gage said to Faith as they drove away an hour later. “Between Washington wanting a whipping boy for corporate crime and the class action lawyers looking to make a killing, I don’t think there’s a way to stop it.”
“What do you know about Simpson amp; Braunegg?” Faith asked.
“That they’re disgusting. It’s one of those firms that deceives itself into thinking it’s on the side of truth and justice, when it’s really just after the money-sometimes ruthlessly. It almost makes you respect gangsters like Matson’s pal Gravilov. At least they don’t pretend to be serving the public good.” Gage exhaled and shook his head as he stared at the car taillights in front of them. “Simpson amp; Braunegg will sue Jack whether they believe he was in the wrong or not. He has deep pockets and his firm has deep pockets.”
“Why didn’t they just name him now?”
“Because they don’t want a big fight over his files. They want him to believe that he’s just going to be a witness. They’re hoping he’ll give them everything if he thinks it’ll keep them from naming him.”
“Jack may be weak at the moment, but he’s not stupid.”
“And you know what else?” Gage wasn’t looking for an answer. “I think Peterson fed them the case.”
Faith’s head swung toward him. “But isn’t that un-ethical? U.S. Attorneys aren’t supposed to do that, are they?”
“No, they’re not. But we won’t be able to prove it and, even if we did, nobody’ll care. Not with Simpson amp; Braunegg on the courthouse steps showing off a bunch of retirees who lost everything.”
“Can you do anything?”
“I don’t know.” Gage felt the pressure of two clocks ticking. The criminal case and the civil suit, each counting down toward explosions that would rip Jack and Courtney’s lives apart. “There’s one thing I do know. I need to buy some time.”
CHAPTER 43
D errell Williams, an ex-FBI special agent who’d worked with Gage for almost a decade, intercepted him as he walked from his car toward the front steps of his building.
“Hey, Chief. I had a meeting over at the U.S. Attorney’s Office on your antitrust case. The good news is that they were so thrilled to have the thing handed to them in a package that they did a little more tongue wagging than they should’ve.”
“And the bad news?” Gage asked, eyes fixed on Williams.
“You better watch your back. The word is that Peterson is pretending to be playing the SatTek case like it’s a game of Sunday touch football, but inside his four walls he’s been screaming that you’re screwing up his indictment and that he’s going to hammer you.”
Gage nodded. “Thanks for the heads-up.”
Williams smiled. “That’s what you always say, and then you do whatever you were going to do anyway.” His smile faded. “But I’m not sure that’s a safe way to go this time. My old partner was at the meeting. On the way out, he whispered that Peterson asked him whether there’s a connection between you and a Hong Kong company called TD Limited. He thought it was chickenshit. But it sounds to me like Peterson is following your tracks, trying to get you into his crosshairs.”
Gage knew Williams was right. Peterson was looking for a way to make him duck and run. Toxic Disposal Limited was a front company he and Burch created to smuggle medical supplies through Pakistan by mislabeling them as contaminated equipment sent for recycling. It was the only way to keep it from being stolen and sold on the black market. The problem was that the scheme required first presenting fraudulent export documents to U.S. Customs, a felony that could cost Gage both his license and a year in federal prison.
“Sounds that way to me, too,” Gage said, “but I’m working on getting Peterson into mine. We’ll see who locks on first.”
Alex Z hustled to catch up with Gage as he walked down the hallway toward his office.
“You guessed it, boss,” Alex Z said, following him inside. “There’s a connection. The partner at Simpson amp; Braunegg who’s handling the SatTek suit was a frat brother of Peterson at Cal. Franklin Braunegg. And they’re golfing buddies now. They even belong to the same country club.”
Gage pointed at a chair in front of his desk. “How’d you find out?”
“Alumni bulletins. That kind of thing.” Alex Z sat, then flipped open a folder and turned it toward Gage. “I even found a photo of them holding up a trophy from a tournament. They play in what’s called the Winter Circuit.”
“Can you find out whether Peterson was ever-”
“Already did.” He slid over a spreadsheet. “I found three securities cases where Peterson was the prosecutor and Braunegg was the class action lawyer. A total of about fifty-five million dollars.”
Gage gazed out of the window while doing his own calculation. “If Braunegg’s firm got thirty to forty percent, that would be fifteen or twenty million. Even if they had a few million in expenses, they made out like bandits in slam-dunk cases.”
“Slam-dunk? I thought these cases are more complicated than that.”
Gage looked back at Alex Z. “If Peterson can prove a criminal case to a jury beyond a reasonable doubt, then even a second-or third-rate attorney can reach a preponderance of the evidence in a civil trial. It’s not that hard to tip the scales, especially when the defe
ndants all have fraud convictions.”
Alex Z’s eyes widened. “You mean a guy driving on a suspended license facing a four-hundred-dollar fine can’t be convicted unless the jury finds him one hundred percent guilty beyond a reasonable doubt, but Mr. Burch could be wiped out based on fifty-one percent to forty-nine percent?”
“Pretty close.”
Alex Z threw up his hands. “That’s absurd.” He looked down, shaking his head, then up at Gage. “I see what Braunegg gets out of it, but what about Peterson?”
“Peterson can use Braunegg to take advantage of civil discovery rules that force defendants into depositions. The smart thing is for Jack to take the Fifth. He could do it secretly in front of the grand jury. But he knows if he did it in a deposition, Braunegg would leak it to the media.”
Gage cringed as he imagined the press stationed on the sidewalk in front of Burch’s house, and the humiliation inflicted by cameras riveted on his car window as he drove from his underground garage.
But there was something worse: “In a criminal case, a jury can’t hold it against you if you take the take the Fifth; in a civil trial they can. Braunegg would crush Jack with it.”
“But I thought they delayed-”
Gage shook his head. “There’s no way a judge would delay the civil case until the criminal trial is over. A lot of the shareholders are elderly. The court will want them to get their money back, not die waiting.”
“Well, then Mr. Burch should just let himself be deposed. Maybe once everyone hears the truth that will be the end of it.”
“It’ll only make things worse. Not only will Peterson assume Jack is lying, but it’ll give Matson a chance to adapt his story to Jack’s defense. In fact…” Gage imagined Braunegg and Peterson forehanding Burch back and forth like a tennis ball on an imaginary red clay court at a very real old boys’ club. “Braunegg can tailor his questions to what Peterson is forcing out of witnesses at the grand jury.”
Alex Z drew back. “That’s not right. Grand juries are supposed to be secret.”
“Only in theory.”
“But I thought Peterson was a straight shooter. NFL and all that.”
“Sports build muscles, not character. How many times do you think Peterson held a blocker, tripped a half-back, forearmed a quarterback, took a penalty rather than let the other side score? You think any coach ever complained? The only thing a coach ever said to him was, ‘Don’t get caught next time.’”
“And Braunegg?”
“A calculating little scavenger.”
CHAPTER 44
F ranklin Braunegg was just biting into a BLT when Gage pulled up a third chair to his table for two at the Hidden Valley Country Club. Over the years, Gage had watched Braunegg try to transform himself from a personal injury street fighter into a white-collar sophisticate, but he only ended up looking slick. Eyes too predatory. Hair dyed too dark. Too many rings on his clawlike hands.
“Where’s your pal, Peterson?” Gage asked, glancing at the half-eaten Cobb salad across the table from Braunegg.
Gage knew the answer. He’d spotted an FBI agent driving Peterson away a few minutes earlier.
“Hadda go inta the offish,” Braunegg said, trying to chew and answer at the same time. Braunegg swallowed hard, then took a sip of ice tea. “How ya doing, Graham?”
“I’m a little concerned about a friend of mine.”
“So I heard.”
Gage tilted his head toward the parking lot. “From Peterson?”
“A little bird.”
“I think Peterson would find that description insulting.”
Braunegg laughed, spitting out a piece of bacon that landed in Peterson’s abandoned salad.
“So what do you want?” Braunegg asked.
“I want you to lay off Burch. Withdraw your subpoena and don’t name him as a defendant for a few months.”
“Not possible.” Braunegg sucked on his teeth. “I’ve got a thousand plaintiffs who want his head. And, of course, his money, which he has a lot of. I need to keep the clients happy. Happy clients are grateful clients. Grateful clients refer friends and family.”
“But that’s not how you got SatTek.”
Braunegg shrugged. “I don’t know how we got it. The case just came in. Maybe the shareholders saw me on FOX News and liked my spiel.”
“I don’t think so,” Gage said, finally repaying the wink.
“What are you suggesting?” Braunegg’s face flared. “I don’t need to sit here-”
“Then get up.”
Braunegg threw his napkin onto his plate, but didn’t rise.
“Peterson fed you SatTek just like he fed you your last three securities fraud cases.”
“I’d like to see you prove it.”
“No you wouldn’t. That’s the last thing you want me to do.”
Braunegg glanced around the restaurant. Gage imagined that he was worried that members seated near them had noticed his loss of control in throwing down his napkin.
“You want to take a little walk?” Gage asked.
Braunegg signaled a waiter and signed his tab, then Gage led him out to the parking lot.
“So what if Peterson sent over the plaintiffs,” Braunegg said, as they stood next to Gage’s car. “It’s not a crime.”
“That depends.”
“Depends on what?”
“What else got put on your tab besides an overpriced salad and whether he also sent over grand jury material.”
“You’d have a hard time proving either one.”
“Not so hard.” Gage leaned in close, pointing at Braunegg’s chest. “You’re too flashy. It’s the reason why you never did well in trial. You show your hand too soon, no self-control.”
Braunegg drew back. “Look, Gage, I don’t have to stand here and take this shit from you.”
“First you don’t want to sit, now you don’t want to stand. Which is it?”
“How about just show me your cards and let’s get this over with?”
“I talked to Hackett. Matson isn’t cooperating with you. I talked to Granger’s lawyer and Granger wasn’t cooperating with you, either.”
Braunegg remained silent. His face set. Not sure where Gage was headed.
“Read over your complaint. You have allegations in there that could’ve only come from Matson and Granger. And only Matson was talking-and not to you.”
“Like what?”
“The alleged connection between Burch and Fitzhugh. That went from Matson to Peterson to you.”
Braunegg blanched like he just got caught stuffing jumbo shrimp into his wife’s purse at a cocktail party.
“And that’s all you want? We hold off of Burch? Why not just go to the press? Take a shot at making us pull out of the case? You might even get Peterson fired.”
“Because somebody else would take it over and I’d just have to come up with a way to lean on them-and I don’t have time. And it doesn’t help me to end Peterson’s career. Another U.S. Attorney would just come into the case and we’re back where we started.”
Braunegg looked toward the parking lot exit, as if there was a street sign in the distance to tell him which way to turn, then decided to call for help. “I’ll talk to my partner.”
Gage pulled out his business card, wrote a telephone number on the back, then handed it to Braunegg. “This is the telephone number of Kenny Leals at the New York Times. You can either call me in one hour agreeing or call him in two hours explaining. Do yourself and Peterson a favor. Call me in one.”
Gage had driven less than a mile away from the Hidden Valley Country Club when his cell phone rang.
“You’ve got a deal. Two months. But someday the shoe’s going to be on the other foot,” Braunegg said. “What goes around comes around.”
There was only one type of person Gage hated more than liars: people who thought in cliches. They couldn’t help but lie to themselves.
“No it won’t and no it doesn’t.”
“You bett
er watch your back.”
Not another one. Better answer in a way he understands.
“You couldn’t sneak up on the dead.”
CHAPTER 45
I think we’ve got a leak from the grand jury in the SatTek case,” Peterson told United States Attorney Willie Rose at the weekly meeting of the senior staff in the windowless conference room on the eleventh floor of the Federal Building.
Spread around the table along with Peterson, as head of Securities Fraud, were the chiefs of Major Crimes, White Collar, Organized Crime, Anti-Terrorism, and the Drug Enforcement Task Force. All of them looked at Rose with uncertainty. The first black federal district judge in the Eastern District of California, Rose had resigned a year earlier to assume leadership of what the press called the “troubled” U.S. Attorney’s Office for the Northern District of California. And while each knew they had been promoted as part of Rose’s solution to the troubles, they all feared becoming vehicles for his political ambition.
“If we had somebody in Congress with balls enough to sponsor a constitutional amendment,” Rose said, “we’d get rid of the stupid thing. We don’t need a damn grand jury to tell us we have a case. We tell them. It’s a waste of our time and taxpayers’ money.” Rose tossed his pen onto his yellow legal pad, then looked over at Peterson. “Why do you think you’ve got a leak?”
Everyone at the table, and their assistants sitting behind them, alerted like golden retrievers. Peterson wasn’t a guy who said whatever happened to flit through his mind. If he raised an issue, he’d thought about it.
“We’ve had two grand jury targets murdered and one who barely survived.” Peterson glanced around at the others. “Some of you know him, Jack Burch. The dead ones are a chartered accountant in London named Fitzhugh, and Edward Granger, a venture capital guy who we had just told the grand jury would be coming in to testify as a cooperating defendant.”
“I thought Burch was road rage,” Rose said.
“That’s the party line, but I’m not sure. The later shooting that I thought was road rage wasn’t. It was domestic. The wife thought hubby was having an affair with a woman he jogged with in the mornings. But even if we set that aside, we have Fitzhugh and Granger. It’s like somebody is trying to contain the case and somebody in the grand jury is tipping them off.”
