Two Jakes

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Two Jakes Page 15

by Lawrence de Maria


  “Fox in the henhouse,” Scarne said.

  “We’ve checked his website,” Meghan Pace said, “and there are several citations for Victor Ballantrae and his companies. But it’s a pay-as-you-go service. To get more than headlines we’d have to lay out serious cash.”

  “That’s not going to happen,” Pourier said. “The money wouldn’t bother me but I like to generate my own copy. We do use the website as a tip sheet. Reg doesn’t mind.” Pourier riffed through his Rolodex and wrote on a pad. “Here’s Reggie’s number and address. He’s in Weston. I’ll give him a heads up. It might help if I let him know you may be dropping by. Good luck. Say hello to Reggie for me. Just don’t stand too close when he starts his car.”

  CHAPTER 17 – EXPENSIVE TASTES

  It took Scarne a half hour to drive to Weston, an inland suburb of both Miami and Fort Lauderdale that bumps up against the Everglades. The town allegedly marked the limit of the megalopolis’s expansion west, although according to Pourier few people believed that Florida’s rapacious developers would stop short of the Gulf of Mexico 90 miles away.

  Offshore Confidential occupied a storefront between an Edwin Watts golf superstore and a Ruth’s Chris steakhouse in an upscale shopping plaza. The woman at the reception desk smiled pleasantly at Scarne. He hadn’t known what to expect at a newsletter devoted to ferreting out financial sleazebags but it wasn’t a stunning blonde who looked like she just stepped out of Vogue.

  “Oh, yes. Reginald has been expecting you.” Boston accent. “Coffee?”

  Scarne said black would be fine. The woman disappeared and returned with a steaming mug that said “Money Laundering Expo – Caracas - 2008” on its side. As they started down a hallway he pointed to a wall rack filled with various newsletters: Offshore Confidential, Bermuda Confidential, Caribbean Alert, Swiss Watch (presumably not about timepieces) and Frauds & Fakers.

  “Do you publish all of those,” Scarne said.

  “Those are just our print products,” the woman said. “We also have several web-only newsletters. We provide real-time information on the Internet, which, as you might imagine, comes in handy when you are dealing with people who, how should I put it, tend to move around a lot.”

  They passed a small office in which a boy and a girl sat facing each other across a desk. They were dressed in jeans, tee shirts and sandals. Both had hair down to their shoulders. The boy, who needed a shave, ignored them, but the girl glanced up from her computer and waved. Scarne returned the gesture.

  “They look like college kids.”

  “They are. Interns. University of Miami. Honor students.”

  They entered an office where a man was working on a computer with his back to the door. He was dressed much like the kids and had a brown ponytail. Only when he turned around did Scarne realized that there was plenty of gray in his hair and a lot of miles on his face. He looked like the quintessential aging hippie. But he flashed a friendly smile and stuck out his hand.

  “Mr. Scarne, I presume? Reggie Sink. Well, you fit Pourier’s description, so I guess it’s you. John’s a good sort. We steal from each other.”

  He waved Scarne into a seat.

  “Now, before you go into your spiel, I have to tell you that we sell everything we print or put on the web.” Sink spoke rapidly, as if his mouth couldn’t keep up with his brain. “I don’t feel comfortable giving away for free what other people pay for. Which brings me to your subscription.”

  “My subscription? I don’t have one.”

  “You will, if you want much information out of me. Listen, it will be worth every penny. It will open up a whole new world of potential business for you. Come on, for a thousand bucks a year you get all my publications, print and electronic. Less than a set of good golf clubs.”

  “Do you take American Express?”

  “Certainement! Doesn’t everyone. Allison here can take your order.”

  Scarne gave her his credit card information and mailing address. Well, he thought, so much for saving a thousand bucks by not subscribing to a Shields newsletter. At least it’s Sheldon’s money.

  “Now you can buy that new dress, sweetie,” Sink said.

  “What a wonderful idea,” the woman said, and walked out.

  The eyes of both men followed her.

  “Allison is another reason I charge so much. Wellesley gals have expensive tastes. But she’s worth every cent. And not just for the obvious reasons. Harvard Law. Writes a lot of our stuff and vets the freelancers.”

  “Looks like you are doing OK.”

  “It’s like stealing money.”

  “Again.”

  Sink laughed.

  “So you know about that. Well, I don’t hide it. Actually, it helps me. People assume I can spot the frauds, having been one. And they’re right.”

  “How did you get into this business?”

  “After I got out of the slammer, I had to start over. Lost my securities license, of course. But also my family. First wife took most of my remaining assets and the kids. I don’t blame her. What money I had left was going up my nose. I was headed downhill until I found Jesus.” He laughed. “Only kidding! Just wanted to see if you’re paying attention. What I found was Allison, that babe you keep leering at. Worked for the firm that defended me. Saw a lot of each other. Wouldn’t marry me until I went straight. She came up with the idea of starting a newsletter tracking investment fraud. Only I didn’t have to.”

  “What do you mean?”

  “One already existed here in Florida. Guy had a small rag tracking the offshore banking world in the Caribbean. He practically gave it away so no one took him seriously. I bought him out and started charging big bucks. I still had a lot of contacts on the Street. They were happy to feed me dirt on their illegal competitors, who, after all, are siphoning billions away from their legitimate scams. Subscribers flocked in. People don’t value information they get for free. Then came 9/11 and Offshore became a must read for the intelligence community.” Sink spread his arms wide. “And the rest, as they say, is history. Now, what can I do for you?”

  Scarne liked Reggie Sink.

  “First, let’s get one thing straight. I just paid for you. Not the other way around. I don’t want anything I tell you to appear in one of your newsletters unless I say so. Is that clear?”

  “No problemo.”

  “What can you tell me about Victor Ballantrae and his company? I know you have run some stories on him.”

  “Ballantrae, huh? It’s about time somebody other than us got interested in the bastard. Mainstream press treats him like Nelson Mandela. But something is rotten in Denmark.”

  “How so?”

  Sink leaned forward and put his elbows on his desk.

  “Let me tell you about Wall Street. All the crap of the last couple of years – the huge profits, the collapse and then the bailouts – were the result of so-called new products, derivatives and collateralized mortgage whatsists. And, of course, a total lack of regulation, which is insane. You can deregulate the airlines and safety isn’t compromised because the guys running those airlines know that nobody will fly if the planes keep falling out of the sky. But deregulate Wall Street and they don’t care if your investments aren’t safe. The big guys make money on the way up, and on the way down. Sometimes more on the way down, cause that’s where the bargains are. And the American taxpayer will bail them out no matter what happens.”

  Sink stood up and started pacing. He was getting into his subject.

  “But I digress. In the normal course of events, using traditional securities, it’s tough to beat the market, which actually does level the playing field. Insider traders can do it in stocks, as I well know. But if you stick to the rules, or anywhere close to them, you’re not going to be able to separate yourself from the pack, unless you think long-term, like Buffet. Short-term, there are too many smart brains doing what you are doing, using the same computers. Of course anyone can get lucky in one or two short-term trades, but when someo
ne consistently outperforms his peers, or claims to, I get suspicious.”

  “And you’re suspicious of Ballantrae?”

  “He offers CD’s with interest two or three percentage points higher than other banks and brokers, including the biggest in the country.”

  “Doesn’t seem like all that much.”

  “What are you talking about? If I’m offering a CD at six percent and you’re offering one at eight percent, that’s 33 percent higher than me. At low rates, say three percent versus two, that’s a 50 percent premium. Normally, if one banker is offering a CD at six, his rival across the street might offer it at 6.1 percent and throw in a toaster. You might even cross the street for that tenth of a point. For three points you’ll cross the fucking galaxy.”

  Sink sat back down.

  “How can he do it?’

  “He can’t. That’s my point. He’s doing something that’s not kosher.”

  “Wouldn’t the SEC or other regulators spot that?”

  Disdainful didn’t cover the look Sink gave Scarne.

  “Jesus. Did you step out of the room when I was talking about regulation? There was none. Now, of course, they’re playing catch-up. But Ballantrae isn’t selling mortgages. He’s selling CD’s. Too dull for most prosecutors.”

  “He says his bank in Antigua gives him tax advantages that mainland U.S. banks don’t have,” Scarne said, “and that he can invest overseas for higher returns. Also his direct sales operations have a low overhead.”

  “You’ve been reading his marketing malarkey. All big American banks are international and they are all pretty good at evading U.S. taxes. Giving Ballantrae credit for the direct sales crap, I’d say he could offer, at most, a quarter of a percentage point over his rivals. On the outside. If the wind is blowing the right way.”

  “A Ponzi?”

  Sink slapped his hand on his desk.

  “Give that man a cigar! It’s nice to talk to an educated man. Yeah, I think Ballantrae is running a sophisticated Ponzi, paying high rates to old investors using cash from new investors who, of course, are lured by those very rates.”

  “You’ve actually run stories about this?”

  Sink shook his head sadly.

  “We’ve run some stuff on Ballantrae that we could document. He’s making a major push in investment banking and has taken some shortcuts. A few of his brokers and advisors have been involved in minor securities violations. But he always disavows any knowledge of their actions and promptly fires them. Nothing sticks to him. He pays fines and the matter goes away.”

  “That’s it?”

  “Here’s how it works around here. We report lawsuits, court cases, depositions, administrative investigations and arrests. My interns monitor news agencies, regulatory and legal websites and blogs for anything smacking of offshore illegality and we print what we can confirm. We’re not staffed to do much investigation ourselves. What could we do, when the C.I.A., F.B.I., Interpol, the S.E.C. and all the rest are overwhelmed by the avalanche of deceit out there? There’s a trillion fucking dollars floating around offshore! It’s all we can handle to report the hard stuff. And that’s enough to make me rich. We’re one-stop shopping for people who want to know who’s been caught doing what. We don’t print innuendo and rumors. Or my gut instincts. That’s why we don’t lose lawsuits. If formal charges are filed against Ballantrae, or if he’s even sued by his investors, we’ll use it. I think Ballantrae is as crooked as my dick, but he’s got a gazillion lawyers. He’s super litigious. He even threatened to sue me when I ran some stuff that was already public record.”

  They were interrupted by Sink’s wife, who handed Scarne a receipt and a small shopping bag filled with newsletters.

  “I gave you the last three issues of all our newsletters,” she said. “You can access the online editions with a temporary password you can change later. Instructions are in the bag. More coffee?’

  Scarne declined and thanked her. After she left, he turned to Sink and said, “I want anything you have on Ballantrae, even what you can’t print.”

  Sink considered that.

  “I’m not real comfortable with that. Your thousand bucks doesn’t buy you that kind of information. Forget the legal angle. I like to know what I’m dealing with. Who are you working for?”

  “Didn’t Pourier tell you?”

  “Nah. Just asked me to see you.”

  Scarne told him. Sink’s expression went from benign interest to incredulity.

  “And Sheldon Shields thinks his son’s death is connected to a story he was preparing about Ballantrae?”

  “He’s convinced his son was murdered by someone. I’m keeping an open mind. If Josh Shields had proof of a Ponzi, it might be enough to derail Ballantrae’s investment in Shields Inc. He’d be a real threat.”

  Sink looked dubious.

  “Look, I think the worst about everyone, from Mother Teresa to Santa Claus, but I can’t see it. Ponzi guys don’t kill people. Madoff, who was facing life, didn’t go that route. These guys always think they can turn things around, or lawyer things away. Plus, unless they do it themselves, or have access to reliable hit men, too many people would know. If the old man is right, it’s gotta be something else. Something Ballantrae knew would be catastrophic.”

  “Any guesses?”

  “Hold it a second.” Sink picked up his phone and dialed an extension. “Barry, come in here, will ya?” He looked at Scarne. “Barry’s one of my interns. The in-house bomb thrower. Likes to collect dirt on people, very little of which I can ever run. He’s my Ballantrae expert.”

  A moment later the scruffy kid with the ponytail slouched in.

  “Tell this gentleman everything you know, or think you know, about Victor Ballantrae and his operations.”

  He gave Scarne a suspicious glance.

  “Who the fuck is he? A cop?”

  “Someone whose cash may allow me to keep you the fuck on as an intern.”

  Barry shrugged. “This can get complicated, you may want to take notes.” He picked up a legal pad from Sink’s desk and flipped it toward Scarne. Then he started talking, as if from memory.

  “Ballantrae International is an international holding company trying to get its fingers in everyone’s pie. Victor Ballantrae is Australian. His antecedents are murky, as is his personal and business life Down Under. Had some minor scrapes with the law that were ascribed to youthful indiscretion. Apparently straightened himself out and moved to England to get a degree in finance. Returned home. Bounced around and then went into banking, if you can call it that. Opened up shell banks in Niue and Nauru, two rock-sized islands in the Pacific with a combined population of 12,000. But they domiciled 500 banks, some of which reportedly washed millions for Russian mobsters and officials stealing the former U.S.S.R. blind.”

  Scarne’s initial opinion of the kid slowly gave way to awe. Behind the scruff and ponytail was a real brain.

  “The banks, of course, were just pieces of paper. If you could fog a mirror and pay the fees, you could open a bank. Ballantrae supposedly transferred a lot of cash from the islands to a bank he started in Australia. All quasi-legal, by the way. Before 9/11, Australia was pretty Wild West in banking circles. Lots of money went into the kangaroo’s pouch dirty and came out squeaky clean. Aussies are big in offshore Internet casinos, too, and I hear Ballantrae had a piece of that as well.

  He paused to let Scarne finish what he was writing.

  “Anyway, Australia finally started cracking down on the money launderers and Ballantrae set out for friendlier climes. And no place was friendlier than the Caribbean after Ballantrae bought off Congress – both sides of the aisle, by the way – and torpedoed legislation restricting offshore banking. Ballantrae International Bank in Antigua is now one of the largest offshore banks in the region. My bet is that a lot of those Russian rubles found their way there. As with any offshore bank there are rumors of money laundering for South American drug dealers. Then, of course, there is Pavlo Boyko. Heard of h
im?”

  “No,” Scarne said, still writing. “I hope there isn’t going to be a quiz.”

  “Boyko is the former Prime Minister of the Ukraine who fled to the U.S. in the late 1990’s after wiring $200 million from his treasury out of the country. He sought asylum but was instead arrested and is now serving a long stretch in Marion. But the money was never recovered and the suspicion is that it eventually wound up for safekeeping with his brother in Seattle. Andriy Boyko is a fish wholesaler but he also runs the Ukrainian mob on the West Coast.”

  Barry paused for effect and even did a credible drum roll on Sink’s desk with a couple of pencils.

  “But here’s the interesting part. Andriy supposedly needed someone to launder all that money. He’s smart enough to know that the Feds were one step behind. He had to get it out of the country again. After all, you can hide only so much cash under dead mackerel. And that’s where Ballantrae comes in, or so my sources tell me. He’s the new banker for the Ukrainians.”

  “Why did they pick him?

  “Word is that he came highly recommended from the Seattle Mafia, which got to know him through his Internet casino operations. He handled a lot of their money and the Ukrainians went to them for advice.”

  “Where did you get this?”

  The kid looked at Sink, who nodded.

  “The stuff about Pavlo is public record. And his brother is all over the papers out there. But a lot of it comes from disgruntled competitors and pissed-off ex-employees who say something is fishy, pardon the pun, but don’t want their names used.”

  “And none of this has appeared in the newsletter?’

  “Nah. Reggie is a pussy.”

  Sink snorted derisively.

  “Mafia, Ukrainians, why not throw in al-Qaeda while you’re at it. I only act crazy. It’s good for circulation. When you get something you can prove, snot ass, let me see it.”

  The intern laughed. “Sure, boss.” He started to walk out.

  “Let’s suppose,” Scarne said, “that some of what Barry suspects is true. Would it change your mind about what Ballantrae might do to suppress it?”

 

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