Two Jakes

by Lawrence de Maria

  Ballantrae’s family tree could be traced directly back to one of the 19th Century prison ships that disgorged in Australia the refuse of London when Mother England decided to solve the problem of its overcrowded gaols and poorhouses. But no further back than that, as a young Victor discovered in a rare moment of retrospection when attempting some genealogical research. His antecedents in England were either so poor or so criminal there was no record of them prior to the entry of a “George Ballantrae” in the ship’s manifest. The fact that George was arrested shortly after stepping ashore for picking the pockets of people who had nothing in them at least had the effect of getting the Ballantrae name on paper and Victor was able to trace the family’s subsequent misdeeds. For unlike most of the poor wretches who became solid citizens after being dumped Down Under the Ballantrae apples never fell from the diseased tree. George was the primogenitor of a long line of horse thieves, con artists and embezzlers before he was hanged an overdue 10 years after setting foot on Australian soil.

  Victor was not even sure “Ballantrae” was the man’s real name. The entry for a George Ballantrae on the manifest was followed by a note that said, “Died at sea.” Either the record keeping on prison ships left something to be desired or George appropriated the name of a dead man. And since there were many ways for someone to have “died at sea” it was possible that he’d had something to do with the demise of the old “George.”

  The Ballantrae corporate history and personal biography was a mix of half truths and outright fabrications that the American financial press swallowed whole. After emigrating to America well-financed by his offshore activities in the Pacific, Ballantrae made more millions buying and selling Canadian oil and gas leases, many of dubious provenances. He soon realized that with deregulation of the American securities markets some of his more worthless holdings could be cut up into tiny pieces and sold as limited partnerships. The partnerships were always structured so that a few producing wells could generate enough returns to lure in subsequent investors and even provide the semblance of an aftermarket.

  This aftermarket came in handy when, against all odds, drillers actually hit an oil or gas pocket, or because a spike in energy prices made marginal holes profitable. Then Ballantrae, through third parties, bought back those properties, which ended up in his portfolio. Many of his limited partnership shares were marketed by “respectable” Wall Street firms through sales departments whose due diligence never went further than their hefty commissions.

  Ballantrae’s Wall Street contacts proved useful for his next scheme, “La Vuelta,” a Spanish word meaning “The Return.” It had its origin in a quasi-legitimate arbitrage business started after Venezuelan President Hugo Chavez refused to pay off certain creditors of Petroleos de Venezuela (PDVSA) who had backed a crippling strike against the state-owned oil company in an effort to destabilize his regime. Some local businessmen arranged to buy up the unpaid debt at 10 cents on the dollar. Using corrupted PDVSA officials, the business group managed to get full payment on the debts behind Chavez’s back. The businessmen soon ran out of their own capital, but loath to lose an investment stream returning 90% they cast about for new funds. They had little trouble attracting investors locally, who were promised monthly returns of up to 20%. Word of mouth about this incredible investment opportunity spread throughout families to the United States, creating a frenzy among South American expatriates in Florida and Louisiana.

  Enter Victor Ballantrae, who knew a burgeoning Ponzi when he saw one. He created a financial subsidiary that sold interests in La Vuelta to thousands of South Americans living in the United States. For a time, this new influx of cash kept the scheme going and old investors indeed reaped good returns generated both by the initial 90% arbitrage and dollars provided by new investors. Given the underlying cash flow from PDVSA it might have worked for years. Then Hugo Chavez caught on to the duplicity within PDVSA, had the corrupt conspirators arrested and cut off all dollar payments to the creditors. (“Fucking Communist bastard,” Victor raged.) Ballantrae continued to sell interests as long as he could find suckers – he knew that the S.E.C. could care less about South Americans getting ripped off in Venezuela – but without government petroleum funds the fraud soon fell of its own weight.

  Most of Ballantrae’s clients lost everything, but since the majority had invested less than $100,000 (each interest sold for “only” $25,000) there were few lawsuits. It was just too expensive to take on Ballantrae’s legal legions. But a few large investors with millions at stake did bring suit. Alana Loeb was able to clean up the mess with hefty payouts tied to confidentiality agreements. Only one investor, a former general with ties to right-wing death squads in Ecuador and a penchant for vengeance, wouldn’t be bought off. He sent Jesús Garza, who was then making a name for himself as a hired “negotiator” in Miami, to collect all his money from Ballantrae, with interest.

  “The general doesn’t believe in lawyers,” Garza told Alana Loeb at their first meeting. “He’s prepared to be very unreasonable.”

  She looked at the swarthy man who relayed this message so calmly and saw the killer. She knew such men from “before.” He wasn’t going away.

  “Let me see what I can do.”

  She found out all she could about Garza and went to Ballantrae.

  “For Christ sake, Alana, that’s a lot of money.”

  “It will pay dividends down the road, Victor. Trust me on this.”

  She called Garza and met him for mojitos at the bar in the Fontainebleau.

  “You can have $250,000.”

  “He wants his million, plus interest,” Garza said, smiling. “Abróchense los cinturones, senorita.” Fasten your seatbelt. He started to rise from his chair.

  Alana put her hand on his arm.

  “I said you can have $250,000.” She paused “A year. Plus bonuses.”

  The police said the explosion on the general’s yacht was likely caused by a leaky fuel pump. No bodies were recovered. Many in Miami’s expat community assumed that a vengeful Ecuadorian family caught up with him.

  A year later, Garza brought Keitel into the firm. There was more than enough for them to do, as scam begat scam. Victor Ballantrae was at heart a con man. Nothing intrigued him more than a good Ponzi scheme. Alana Loeb, on the other hand, was a financial genius. She came up with the idea that there was a lot more money to be made in Venezuela – this time with Hugo Chavez’s unwitting help.

  In the early 1980’s, a Venezuelan agricultural development bank, Banco de Desarollo Agropecuario, better known as Bandagro, went bankrupt, leaving creditors holding zero-coupon bonds with a face value of $800 million. Few investors went near the bonds until 2003, when Chavez said that the country would honor the bonds when they reached maturity. Neither he, nor the investors who now snapped up the Bandagro bonds, knew that they were sophisticated forgeries, part of a brilliant scheme engineered by a group of Panamanian con men. Bandagro had intended to issue the bonds as part of a last-ditch effort at solvency, but the bank’s scrupulous treasurer, knowing the bank was going under in any event, refused to sign them. But someone signed his name, and many people bought them in good faith.

  Ballantrae, through his connections from his first Venezuelan scam, knew the bonds were forged. (Indeed, the forger now worked in one of his companies; good men being hard to find.) Ballantrae and Alana Loeb created a hedge fund and sold tens of millions of dollars worth of the Bandagro bonds short. When the time was right, they provided, through intermediaries, proof of the forgeries to the government and leaked the news to the press. As expected, Chavez reversed himself and renounced the obligation, making the bonds worthless. Ballantrae’s hedge fund closed out its positions for pennies per bond, reaping obscene profits. (“Always liked that Chavez bastard,” Victor said. “Salt of the earth.”)

  The scheme made so much money that Ballantrae was forced to hide it by expanding rapidly in investment services and other businesses in the United States, where decades of deregulation and re
gulatory shrugs made any sort of financial enterprise appear to be legitimate. He had discovered that the only thing safer than breaking the financial laws in third-world countries was doing it in a country whose citizens naively assumed that their Government was watching out for them.

  But Ballantrae was always looking for new sources of revenue. The offshore bank in Antigua proved useful in laundering money for powerful criminal elements on the West Coast of the United States.

  Unfortunately, against Alana’s advice he had taken some risks and the relationship with those elements had recently soured, which was why the South Florida Times story had to be stopped in its tracks. It might have brought their West Coast problem to a head. Of course, had they known the reporter’s real identity, they might have taken a different approach. Of all the rotten luck!

  But that was spilled milk. Now it was even more important that Sheldon Shields and his annoying private investigator be derailed. Garza’s trip to Seattle had presumably bought some more time. In a month or two the bank funds would be replaced and he’d have a powerful minority interest in one of the world’s largest media empires.

  He’d be untouchable then. Especially since he didn’t plan on being just a minority owner forever.

  CHAPTER 23 – DO YOU GOLF?

  “What did you mean when you said you knew who I was, Ms. Loeb?”

  Alana Loeb wasn’t smiling. But she didn’t look angry.

  “Randolph Shields called us. We were expecting you. There was no need to play cops and robbers, or even a building inspector.”

  “Then you know I’m looking into his son’s death.”

  She shook her head sadly.

  “Poor Sheldon. I’m not sure how Victor will react to this insanity.”

  “I’m not so sure it’s insanity, Ms. Loeb.”

  “You think we had something to do with it,” she said coldly. “I would be careful, Mr. Scarne. There are laws against slander.”

  “Look,” he said. “I’m not saying he’s right about Ballantrae being involved. Makes no sense to me either. But I’ve spoken to a lot of people, including the medical examiner, and I can no longer dismiss the possibility that Joshua Shields was murdered. His computer and notes are missing. He was preparing an unflattering article about your organization. Perhaps there are other explanations but the fact remains that the article never got printed.”

  They were interrupted by a woman carrying in a tray with a coffee service.

  She placed it on the table and started to pour.

  “Thank you, Maria,” Alana Loeb said. “You can leave it. I’ll take care of our guest.”

  Which she did, quickly and efficiently.

  “Reporters keep a lot of stories on their computers, Mr. Scarne. Maybe he was writing about dope rings or ghetto gangs. Miami has a vibrant criminal subculture. Companies don’t kill people to prevent unflattering articles. There would be daily massacres. Why pick on us?”

  “If I find out that he was working on other stories, I will pursue them. But you’re all I’ve got for now. If there is nothing here, I go away. But I have to start somewhere.”

  Alana Loeb looked exasperated. She put down her cup and leaned forward.

  “You seem like an intelligent man, Mr. Scarne. I don’t doubt that you have Sheldon’s best interests at heart. You proved that by turning down Randolph’s offer to drop the case. Oh yes, he told us. I, for one, find your actions admirable. I’m sure Randolph rarely has anyone turn down his money. He must have been shocked.” She smiled and sat back, crossing her legs elegantly. “So I don’t think we will make you an offer. More coffee?”

  “I’m fine.”

  “Sheldon has obviously become undone by the deaths of his son and wife in such short order. I know he had been indiscreet and you are aware of our interest in investing in Shields Inc. There is a tremendous amount of money involved. I hope we can rely on your discretion in that regard. But there is much more at stake. Your investigation has the potential to rip a family apart and humiliate a fragile old man. I hope I’m not talking out of school here, but Randolph told us he’s thinking about forcing his brother to seek psychiatric help, perhaps even have him committed. Are you really willing to risk that?”

  “It’s not my call, Ms. Loeb. Surely you can see that.”

  “Well, surely you can understand that it’s not in our interests to encourage you in this matter. I speak now as chief counsel and I think that from here on out you will have to deal with our legal department.”

  “Gee, I was hoping to meet Mr. Ballantrae.”

  “I’m afraid that isn’t possible.”

  From the doorway a voice said, “Oh yes it is.”

  Scarne stood as the man walked in the room. Alana Loeb remained seated.

  “I’m Victor Ballantrae.” His dark eyes bored into Scarne’s. “What’s this all about, Alana?”

  She stared at Ballantrae for a moment and then told him, in a few clipped, concise sentences. Her tone was businesslike and lacked deference. As she spoke, Scarne took the measure of the man. Ballantrae was at least four inches taller than he was and a good deal heavier, broad shouldered with a hint of a belly. Good suit, strange, overblown face. Thug at the core, he decided. Ballantrae listened with apparent indifference and then turned to Scarne.

  “I usually refer matters like this to my lawyers. I have a passel of them. No one wants to further complicate a family tragedy but I have a reputation to uphold. My company is expanding rapidly. We are in the financial services industry. Trust is what we sell.”

  The snake oil sincerity grated on Scarne.

  “Mr. Ballantrae, Sheldon Shields asked me to look into his son’s death, not specifically your company. I agreed to do so with the proviso that I was to be given a free hand. I’m just going over old ground but that’s the way I operate. Don’t read too much into it and please spare me the Wall Street sales pitch. I’ve been around the block and done some research. You may sell trust, but you get a commission. But for what it’s worth, I’m not here to embarrass anybody because you screw your competitors or inflate your profits. If you had nothing to do with Josh Shields’s death – and I’d guess you didn’t – then you should want to help me. If you don’t, it will only make me more curious. You’d be better off stonewalling the cops. They have many priorities. This case is my only one. I won’t stop until I’m satisfied I’ve covered every base.”

  “I don’t appreciate threats.”

  “Neither do I. Randolph Shields is trying to put me out of business. I don’t like that. I intend to give his brother his money’s worth.”

  Ballantrae looked like he was making up his mind. Then he let out a guttural laugh.

  “What the hell! Do you golf, Mr. Scarne?”

  “Excuse me.”

  “I would like you to be my guest at my club tomorrow for a round of golf.”

  This is bizarre, Scarne thought.

  “I golf.”

  “Great. I don’t have time to talk now. I’m giving a speech at the Biltmore. What do you say? I can arrange clubs for you, shoes and the like.”

  “I won’t need anything. Just tell me where and when.”

  “Pelican Trace, in Boca Raton. You may have heard of it. Let’s say noon. We can have a bite of lunch first.” Ballantrae put out his hand. His grip was hard and meant to intimidate. “Alana can show you out.” As he left, he said over his shoulder, “Don’t forget your checkbook.”

  At the elevator, Alana Loeb said, “Victor is very competitive, Mr. Scarne.”

  “So am I. I’m looking forward to our match.”

  The doors opened.

  “And I hope to see you again, Miss Loeb.”

  “Alana.”

  She extended her hand and smiled faintly as he stepped into the elevator.

  ***

  Alana Loeb walked to Ballantrae’s office. He had his feet on his desk and was watching a replay of the interview.

  “You make a lovely couple,” he said.

  “Victo
r, what are you doing? Golf?”

  “What about it?”

  “He’s dangerous. And smart. He’s highly regarded in New York, with powerful friends. You’re not going to charm him or buy him off. Just refer him to our attorneys while we figure out what to do.”

  “Our lawyers would only antagonize him. I want to see what he’s made of. Golf is a great way to size up a man.”

  “Don’t insult my intelligence. This is about dick size and you know it.”

  “I don’t need advice from you on that subject. Not any more. Besides, I’m not going to charm him, you are. He couldn’t keep his eyes off of you.”

  “Stop talking like a pimp, Victor.”

  “I’m not asking you to fuck him. I know you’ve become very choosy about who you sleep with. I want to know what he knows, if anything. You should want that, too. I don’t have to remind you what’s at stake.”

  He looked at her bitterly. She realized Victor had yet to accept the change in their relationship. He still wanted her; that much was obvious. How much of that desire was caused by hurt pride? Did he love her? As always, she began to calculate how to use his vulnerability. Love, what a terrible affliction; what a weakness. She had never made that mistake and never would. But not for the first time Alana Loeb wondered if there was something wrong with her.

  “What’s the matter, Alana?”

  Ballantrae was looking at her strangely, and she realized she had been someplace else for a moment. He slowly came back into focus.

  “Nothing, Victor. Maybe you’re right. It can’t hurt to get to know Mr. Scarne better. He’s not hard to look at and certainly is in good shape. I’ll see what I can do.”