Ward opened a bank account at a local bank and deposited the money he’d received from locals hungry for a high yield. A typical investor paid $100,000 and believed he was buying a federally-insured certificate of deposit. Ward used the money to purchase CDs, which to the bank manager’s delight he left at the bank. But there was a subtle little detail to this scheme. Ward used the CDs as collateral for loans he personally took out. The bank enabled him to pull off the scam, because many investors were deceptively induced by the bank to sign a contract naming Harold S. McClure as the “trustee” of their money.
The result was obvious. The victims lost all their money when “Harold,” now believed to be Ward, defaulted on the loans and disappeared.
The FBI believed that Ward then moved to Indiana, called himself Marshall Stuart Lennox, and incorporated Windsor, Hamilton & Pierce Investments, Inc. He rented a nice office and offered unsophisticated investors historical bonds, such as railway bonds. These were once-valid obligations of American corporations, but are now worthless as securities and only collected and traded as memorabilia. Ward marketed the bonds at prices ranging from $100,000 to $250,000—the same bonds that collectors buy for $25 to $100. Ward, or rather Marshall Stuart Lennox, described the bonds as “backed by the U.S. government” and “payable in gold.” To add credibility to the genuine bonds’ inflated prices, Ward attached valuations by “world-renowned experts,” confirming that the bonds were worth significant amounts of money, far above the price the investors were asked to pay.
One investor became suspicious, contacted the Federal Reserve, and was told that the U.S. government was not backing these bonds. When confronted, Ward smoothly replied, “The Federal Reserve simply doesn’t want you to cash it in, because if everyone did that, there’d be a run on the bank and the U.S. economy would collapse.” But within the hour, Marshall Stuart Lennox had disappeared.
Similar sting operations in various forms followed in other unsuspecting small towns in the Midwest. Complaints to both state and federal authorities mounted, but the investigations led to indictments that went nowhere, because the defendant was nowhere to be found.
For more than a decade, Ward was an enigma. Nobody knew where he was, or could even accurately describe how he looked. He had shunned the ordinary business-publicity photos, and the descriptions his victims gave fit a million other men. All the FBI had concerning Ward’s description was a high school photo more than twenty years old, and his fingerprints taken in 1979, when Ward had been arrested for assault. Ward’s legacy ended abruptly in summer 2001. That was the last time there were complaints about scams fitting Ward’s modus operandi. Had Ward died? No death certificate bearing his name or any of his aliases was issued anywhere in the U.S.
Had Ward left the U.S.? If so, how? His U.S. passport, issued in 1980, had expired in 1990. The State Department reported that this passport hadn’t been renewed. Had a new passport been issued bearing any of the aliases the FBI said he used for his scams? The State Department said no. Was Ward in prison on an unrelated conviction? Again, the FBI said no.
The mantra think outside the box rang in my mind. They were the words of Alex, my Mossad Academy training instructor, repeated in his Canadian accent. “Your rivals aren’t ordinary people. They operate differently, so why would you expect them to think like an average Joe? Put yourself in their skin. Then take one step forward.” Good, I thought, as long as we aren’t on a cliff’s edge.
What did I do to deserve these damned stale cases? Suddenly angry, I tossed a heap of paper off my desk. It was useless—plenty more was still piling up on my desk. Why the hell was the FBI dumping these cases on us two years after the last scam and almost two decades since the first one, and where was the international connection? I silently cursed the anonymous FBI agent who had cleared his desk at my expense. I wished he’d drown in paper. I couldn’t decide who to grumble to first—David or the FBI.
When I cooled off, I remembered what Alex had always told our class: “When you find yourself at a dead end, start from the beginning. One step back may not be enough, because it will lead you to the same brick wall. Revisit all assumptions, and recheck all facts. One or more could be flawed.”
OK, Alex, I thought with a mental sigh, if you could only see how I apply your wisdom. I wondered what had happened to him. Ever since I’d left the Mossad, Benny Friedman, my classmate, had been the only lifeline to my professional past. For all I knew, Alex was still in the system, or maybe growing flowers in his village in northern Israel, enjoying retirement. I read the files again. Two hours later, I still couldn’t find anything I’d missed the first time. The only mention of anything foreign was Ward’s departure from the U.S. in 1980. But he returned sometime in 1985, as the credit reports showed. There went the international connection. I had no idea where to begin.
Think outside the box rang again.
The only thing left for me to do was go back and check the raw intelligence data the FBI was analyzing.
I was frustrated and intrigued at the same time. How could somebody evade the law for so long? It was clear that Ward knew well how to assume new names and identities. Was thinking that he had employed that skill to vanish, thinking within the box or outside it? I needed something to hang on to in this case, or the file would grow moss on my shelves, and I’d be getting polite but per sis tent reminders from David to report progress.
I called David Stone in Washington, DC, grimly bracing myself.
“David, how come you agreed to take Ward’s cases? They’re so stale that even the bookworms who lived in the reports died of old age.”
“Dan, the FBI is fairly confident that Ward is outside the United States,” he said. “That makes the case ours, at least as it concerns the $311 million he stole.”
I was startled for a moment. “$311 million? The amounts in the file don’t even come close to that.”
“Do the math again,” said David. “Eleven known cases—he fared nicely.”
“OK, I’ll look again at the numbers. But what makes them think he’s outside the U.S.? There’s nothing in the file to indicate that. Or the FBI is holding an ace up their sleeve.”
“The Bureau won’t tell us. So I guess it’s intelligence, not facts or evidence, and you know how zealously they protect their sources.”
“What do you mean they won’t tell us? Last time I checked we work for the same government.”
“No need to be sarcastic,” said David, trying to calm down my mounting temper, which he knew only too well. David himself could have a bit of a temper too, but he kept a much tighter lid on his than I did mine. “To the extent that any of it is grand-jury material, they can’t share it with other sections of the government working on the civil side of the case.”
That’s bull, I thought. “Well, David, as an attorney for the government I can receive certain grand-jury material for use in performing my duty. Besides, this case appears to involve bank fraud, so there’s an additional specific language allowing the disclosure. Let’s chew the fat here.”
I could almost hear David’s silent and subtle smile over the phone.
“You’re right,” he finally agreed.
“And?” I asked hoping to get support here. “Why is U.S. law enforcement extra-interested nowadays in high-dollar cases, even if stale? Have they just remembered it has an international aspect, and the post–September eleventh public outcry made them resurrect paper cadavers?”
“Go figure,” he said, joining in my despair.
I kept on pressing, “Unless someone at the FBI simply wanted to get rid of these cases to better his or her statistics, hoping we won’t cry foul, they’d better tell us what they have, or they’ll find these cases back on their desk in no time, dead and aging bookworms included.”
“Dan,” said David in his calm voice. “Think about how the Bureau handled the S-and-L cases in the eighties.” I remembered it well. Neither the Bureau nor federal prosecutors went after the money looted in bank and savings
-and-loan frauds. We went only after perpetrators. The statistics we tracked were numbers indicted and numbers convicted. The government wasn’t going after the money.
“True enough,” I said. “Back then we never went after the money. But I never understood why.”
“One reason, I’d say,” answered David, “was because going after the money would have required separate civil proceedings. Decision makers concluded that these would be resource-intensive cases, with little likelihood of recovering anything.”
His point was that the U.S. government had been leaving millions of stolen dollars on the table, and U.S. taxpayers of course picked up much of the tab. Since that time, however, changes in federal criminal law have allowed us to get restitution, in criminal prosecutions, of ill-gotten gains resulting from crimes for which we got convictions. I’d been involved in many of these cases myself.
“But that doesn’t explain why the Bureau waited so long,” I said in frustration, David’s compliment notwithstanding. “Maybe it landed on the table of this year’s recipient of the phlegmatic agent award?”
“Let me make some calls, and I’ll get back to you,” concluded David.
CHAPTER FOUR
Getting David’s help was the easy part. I had been working for him long enough to know he accepted reasoned arguments and never dug in his heels in a position proven wrong. But people change when they see retirement coming up. And in any case, David would still need to crack some bureaucratic walls. If you spend enough time in Washington, you know that sometimes it’d be easier to get a date with a reigning Miss America than to move things faster between government agencies. For sure, I knew that I had to get a breakthrough before David retired. With his clout and experience, he could back me up on almost anything. But when a new chief comes, things could be different, for better or—more likely—for worse, just because he’d be new on the job.
A week later I went to Washington for a routine staff meeting. After the pep talk, David asked me to stay.
“I thought it over and made some inquiries,” said David. “The bottom line is that the FBI did have a reason to send us these files. But before we go over them, let me call in Bob Holliday. He’s my new deputy.”
“Who is he?”
“He’s a Department of Justice veteran with many years of successful commercial-litigation experience, but with no international exposure. I hope you’ll help him get acquainted with your work.”
Bob Holliday had wide shoulders, smart brown eyes, and a thick mustache, and appeared to be in his early fifties. We shook hands when he walked into the office.
“Dan,” said David, “I concluded that the Bureau has already found common points. All of the names used during the scams were of white American males who one: were born within a few years of one another, but had no apparent connections among them; two: had obtained passports also within a few years of one another; three: left the U.S. and then disappeared; four: resurfaced years later just long enough to scam banks for millions with a reasonably consistent modus operandi—for example, never a bank insider, so never named on a list of persons barred from employment in financial institutions, but gets bank insiders to provide investor victims—and five: disappeared again without a trace.”
“I see,” I said with a mild tone of sarcasm. “What do we have here twenty years later?—millions gone, multiple names, one scam each, consistent MO, no investigative direction.”
David smiled, and turned to Bob. “What do you think?”
Bob Holliday wasted no time in getting to the Bureau’s motives. “At this point the Bureau sensibly concludes that it could spend scads of resources on these dogs and still come up with nothing re terrorist financing or anything else. Wanting at least to improve its statistical picture, and with money plus an international link such as the use of passports, albeit tenuous in the extreme, the Bureau thinks of David and off-loads eleven open cases. David thinks of you. Voila!”
Bob Holliday sounded as if he knew what he was talking about. Normally I didn’t like it when someone came across as too self-assured, but I didn’t mind it with Bob. He managed not to let confidence slide into arrogance the way a lot of people do.
He continued. “The Bureau came up with these cases when trying to look for terrorist financing where they’d never looked before. But it hit a dead end with them domestically.”
“But why just now?” I queried. “And where is the international connection? Just the passports?”
“I know that the international angles are questionable,” conceded David. “All I’m going to tell you is that the dollar amounts in these scams are so high, and it’s so common for proceeds of large scams to leave the U.S., that it seemed worth our taking them on, at least preliminarily. I don’t want to tell you any more about the Bureau’s analysis, because I want you to take a completely fresh look at them. I’m interested in whether you see something in them that others haven’t.”
I returned to my office in New York and sat motionless behind my desk looking at the files, going back over each of the eleven cases. Were there eleven perpetrators, or just one with many aliases? There were conflicting assumptions in the FBI reports. Apparently, I wasn’t the only one confused.
I read each and every bit of testimony of the victims, the bank managers, and the landlords. Their descriptions of each perpetrator were very similar, except for one person who recalled the con man speaking with a slight accent. I was intrigued by this detail and pulled out the FBI FD-302 interview report from the file. Louis B. Romano, of 45–87 West Street, Gary, Indiana, was interviewed at his home by an FBI special agent. I looked up Romano’s number and dialed.
An elderly woman answered. “I’m sorry,” she said when I asked for Romano. “My husband passed away two years ago. Is there something I could help you with?”
I hesitated. “Well, ma’am, I’m sorry for your loss,” I said. “I’m Dan Gordon, an investigative attorney with the Justice Department. Your late husband was interviewed a few years ago about one of your tenants, and I wanted to ask him a few more questions.”
“Who was the tenant? Maybe I could help you. We’ve got only two rental apartments, and I remember most of our tenants.”
“The tenant was Marshall Stuart Lennox. Ring a bell?”
“Of course I remember him.” She paused. “If you don’t mind me saying, I never really liked the guy.”
“Why?”
“He was a real oddball. Never opened his mail.”
“How’d you know?”
“I saw unopened envelopes in the garbage bin a few times. Back then, we were living in an apartment we own in the same building. And I never saw him use his mailbox to leave letters for the mailman to collect.” She let it sink in. “He also installed a telephone line under a different name.”
“And how did you come across that?”
“After he left, a bill came to that address with a strange name on it. I opened it, and the telephone number was the same as Lennox’s. I have no idea why he did it, but he never left a forwarding address—just took off.”
I sat up in my chair. “Do you still have that phone bill?”
“Nope, I threw it out ages ago. The charge was for, like, $6, so I guess the phone company just wrote it off.”
“So what name did he use for the bill?” I asked, trying to keep too much interest out of my voice.
She sighed. “It’s been forever—I really couldn’t tell you. But I think it was just a regular American name, nothing special. You know, Jones, Brown, Evans.”
“Your husband mentioned that Lennox had an accent. Did you notice that too?”
“No, but Louis was always the one who dealt with him. I know he had one, though. Louis used to teach drama and English, so he always did notice accents. I did hear about it. Louis liked to identify people’s origin and background by listening to them talking. After listening to a person’s dialect, Louis could tell where the person grew up, and sometimes how educated he was. He loved doing that.”
“Did he discuss Lennox’s accent with you, or just mention it?”
“Well, he said Lennox definitely didn’t grow up in Wisconsin, which is what he told us.”
“What made him say that?”
“Louis used to go every summer to Wisconsin to teach drama to local kids in a summer camp. He could do that accent really well. So, one day he mentioned to Lennox that he’d been teaching in Oconomowoc, in the lake country. Lennox tried to change the subject, and he mispronounced Oconomowoc. Then Louis made a joke about people from Wisconsin saying ‘cripes’ a lot, but Lennox didn’t seem to get it either. Louis thought it was really weird. But I told him, ‘What do we know? Maybe Lennox left Wisconsin when he was young. Anyway,’ I said, ‘why should we care? He pays rent on time and doesn’t damage our property.’ ”
It wasn’t much, but was at least something. “Did your husband continue to be suspicious of Lennox?”
She thought for a moment. “I don’t know if I’d call it suspicious. He was just a little uneasy about him. He thought maybe Lennox had made it all up—had this crazy idea that maybe he was on the run from the police. Anyway, I don’t know if it’s important, but Louis said something once about how Lennox stretched his a’s and h’s.”
“What, like a Southern drawl?”
“No, not like any American accent he knew. He’d taught speech for years, so Louis really knew his accents. Once he said he was sure that Lennox wasn’t even American. But you know, that was before nine eleven. What did we know?” That was an attention-grabbing remark. I picked up on that.
“Why do you mention nine eleven?”
“Well, you know…” She sounded reluctant to pursue the point. “He had sort of dark skin. Not like he was black or Latino. Just a little darker than your typical Wisconsin dairy farmer, I guess, who’s as white as his cows’ milk.”
The Chameleon Conspiracy Page 3
