The Burden of Proof kc-2

by Scott Turow

  Yen. Those were the favorites, but all were frequently traded, often with multiple moves each day. Stern read to the end in Febmary of that year.

  "He lost money?" asked Stern.

  "Not just money," said Margy. "Everything. There ain't a red centavo that got stole that didn't end up goin right back into the market. Hell, he didn't just lose all that.

  He lost more. Look at the last statement."

  Stern turned the pages again. On the final statement, in boldface, there was a deficit balance reflected of slightly more than $250,000.

  Trading on marg'm-borrowing money from the house to put on positions worth more than what you had invested in the account-it was always possible to lose large amounts quickly, and it had happened here to a farethee-well. Everything had been sunk into sugar contracts, which had come to ruin over several days in February when the market ran wild. By the time Mr. Wunderkind had extricated himself, the loss was enormous, a quarter of a million dollars more than the equity he'd had in the account to start with.

  "The debit balance was paid off?." he asked.

  "That's what the statement says. All 250,000 bucks. I never heard nothin about it."

  "Should you have?"

  "You betchum," said Margy. She sat uP a little straighter.

  "Deficit balance over a hundred grand? Either I hear about it or it goes straight down to Dixon from accounting,"

  "Ah," said Stern. He wndered. Dixon could have probably written off a debt to the house like this with a single stroke of the pen, But the statement showed funds received-Wunderkind had paid off the money he owed MD.

  Stern stared at the papers and, with the familiar frozen precision of his most single-minded attempts to understand, went over it all aloud.

  Margy nodded each step of the way.

  The man had self-consciously placed orders ahead of customers, a major infraction. In order to hide that, erroneous account numbers were used and the transactions, taken for mistakes, were moved to the house error account,. where substantial profits of tens of thousands of dollars on every pair of trades accumulated. Then, in order to gain control of these illegal profits, the man had placed additional orders, once again making deliberate errars in the account information. The result was that the error account paid for the trade. Then the new position was moved by various accounting entries to this new account.

  "Wunderkind Associates," said Margy. "Wunderkind Associates," said Stern. "And then, instead of simply closing his positions and making off with all these ill-gotten gains, he traded on them. Repeatedly.

  And badly."

  "Right."

  "So that, at the end, the net result of dozens of unlawful' tranSaCtions, all of them wickedly clever, is that they have cost him approximately a quarter of a million dollars."

  "That's what the paper says."

  "Not right," said Stern resolutely. He knew, with a conviction durable as steel, there was more to it than this.

  These shenanigans in the Wunderkind account were one more interim link in the long, twisted chain. Stealing this money had turned into a sport for Dixon, his version of the steeplechase. How many hurdles could he take at a canter?

  Stern decided at once that the losses had to be phony.

  There was ample precedent for that. From what Stern understood, at the end of every year there were dozens of such transactions on the Exchanges, designed to fool the IRS. In violation of every rule, trades were arranged off the floor and then carried out in the pit as a kind of second-rate pantomime, so that a loss was recorded for tax purposes, while the position, through one device or another, eventually returned to its original owner. No doubt, something like that was involved here.

  Perhaps there was some record Dixon meant to set: most laws broken in a single theft. Stern sat there shaking his head, convinced he could never work through the final intricacies of this scheme. On the other hand, it was possible the prosecutors would not manage that either.

  "I am not certain, Margy," said Stern at last, "that I see this as the problem you do."

  "Oh," she said, "this ain't the bad port. This is the strange port."

  "Ah," said Stern, and felt his internal elevator descend another floor or two, not as far or as steeply as he might have expected. He was growing accustomed to this. "And what, Margy, is the bad news?"

  "This thing"-she hied half out of her seat to indicate the subpoena-"asks for all the account information. You know, the account application, risk disclosure statement, signature documents."

  "Yes. They want to prove whose account this is."

  "See, that's why we got a little problem here, Buster Brown.

  Cause I can't find even an itty-bitty scrap of paper to show who these Wunderkinds are."

  "No," said Stern simply.

  "I'm tellin you," she said. "It's all gone. All those forms go on microfiche. Fiche for the month that account opened last year ain't to be found. Three copies.-Then we got a little computer screen on every customer. You know: name, address, social security. Somebody's gone in on the system and zapped it out. You put in that account number, you get notbin but a blinkin light. And a' course, the hard copy on all the forms-they been swiped right out of the file."

  "And where were those records kept?"

  "Depends." Central microfiche is in Chicago, but we got a backup here.

  Hard copy for this account'd be here. Computer you can get on anywhere.

  If you know what you're doin."

  "And would Dixon have access to these records?" The question, even to Stern's own ear, sounded weak. The answer was obvious. Margy put it her own way.

  "Honey, there ain't nothin in three cities that Dixon don't have access to from the receptionist's be-hind to the drawer where I keep my Maalox.

  It's Maison Dixon. You askin me if somebody saw him piddlin around in a file cabinet they'd say, Hey there, watcha doin? No chance. I told you.

  They're all scared a' him."

  "You searched thoroughly, Margy?"

  "I went through the files here myself last night."

  "I see." He flipped up the humidor and looked at the cigars, snug in their brown jackets like military men at ease. Last week, he'd had Claudia fill the box, but he had not yet lit or even pressed his teeth into a cigar. "Of course," said Stern, "there have been times that records have been lost in the process of copying for microfiche, correct?"

  "Shore,"

  "And accidentaI erasures of computer information probably occur daily?"

  "Maybe," said Margy "And if you have no microfiche in either city, perhaps you never had one in the first place?"

  Margy.looked at Stern with outthrust chin and gimlet eye, as he made these efforts in the mode of piercing crossexamination. Her expression was easy to read: No sale.

  Stern took a long swallow of his coffee and turned to the window. From here on the thirty-eighth floor of Morgan Towers, the fiver held a liquid gleam. Some days it was leaden and murky. In high winds, the current increased and the water spit and lashed at the brown standards used to moor barges and other slbw-mOving hauling craft that sometimes made their way upstream. Over time he'd come to know the meaning of its changing tones. Stern could tell from the density of color if the barometer was dropping, if the cloud cover was heavy or likely soon to lift. That was the value of experience, he supposed, to be able to read the meaning of signs, to know the large impact signaled by small things.

  This would go badly with the government. Quite badly. He had been warning Dixon against this for months now, to no apparent avail. Dixon was shrewd enough to recognize that even if the prosecutors could not figure out what he had done with the money, they would have a case if they could prove he had stolen it-and proof that he controlled this Wunderkind account would suffice. But it was a desperate response to destroy the documents. The government could barely avoid proving Dixon was responsible. As Margy said, there was probably no other person in the company who could have gone into the files in two cities with the same impunity.
As the government showed Dixon's access to each missing record, the circumstantial web would. take on a taut, sinister look.

  And for that kind of action there was never an innocent explanation.

  Stern was good. He could refer to error accounts and margin calls and limit drops and make a jury dizzy. But when the prosecutors wheeled the MD shredder into the courtroom, there would be no way to cross-examine the machine. Dixon might as well have jumped inside. You could never save clients from themselves, Stern thought. Never.

  So begins the last act in the tableau of Dixon Hartnell, small-town boy made good, gone bad. For Stern, in every case which came to grief there was a moment when his knowledge of a gruesome future fact became firm and thoroughly delineated. Occasionally, it was not until the jury spoke; but more often there was some telling instant along the way when Stern, as the saying went, could see beyond the curve. In the matter of Don Hartnell, husband to his sister, client, compatriot, sporting and military companion, today was the day. Too much was accumulating here-knowledge, motive, opportunity; the error account, John's recollections, the documents gone. Today he knew the end of the story.

  Dixon was going to the penitentiary.

  He took a few minutes to coach Margy on the basics of dealing with Klonsky: Listen to the question. Answer it narrowly and precisely.

  Volunteer nothing. Never say no when asked if particular events occurred; answer, rather, I do not recollect, Name, rank, serial number.

  Hard facts. No opinions. If asked to speculate, decline to. And in the grand jury, remember that Stern literally would be at the door. She had an absolute right to consult with counsel at any time and should ask to speak to her lawyer if there was any question, no matter how trivial, for which she felt remotely unprepared.

  He helped her pack the documents back into her briefcase and slipped into his suit coat by the door. He picked up her bag and asked if she was ready. Margy lingered in the chair.

  "I was pretty tough on you," she said quietly. She looked at her coffee cup, against which she rested one bright nail.

  "When we were talkin a few weeks ago?"

  "Not without warrant."

  "You know, Sandy, I got lots of callusess" She looked up briefly and smiled almost shyly. "The only thing a gal wants is for you to pretend a little bit."

  Stern moved a step or two closer. As usual with Marg, the thought of bet boss was not far away. Dixon was probably very good at pretending, resorting to every corny gesture; he would throw his coat down in a puddle if need be, or croon outside the window. And here was Margy telling him that women liked that sort of thing. Stern waited, sum, moning himself. The best he could manage was diplomacy.

  "Margy, this has been a time of extraordinary turmoik Many unexpected developments,"

  "Shore." Margy smiled stiffly and tilted the cup, garishly rimmed with her lipstick, gazing down with great interest at her cold coffee.

  "Shore," she said again,

  Well, thought Stern, here one could begin to understand her dilemma.

  Margy wanted her gentlemen friends to. pretend-so that she could tell them coldly that she did not believe them. Stern Was certain that he had now arrived at an essential vision. He had heard the pitch, found the hat: monics of a perfect composition in the scale of personal pain.

  Margy's creation was as clever as Chinese handcuffs.

  Constrained, however you moved. His heart, as usual, went out to her:

  And so, out of some impulse 'of tenderness, he told her what he took to be the truth. "I have lately been seeing a good deal of a woman who was a friend of ours for many years." Very brief. To the point. He was not quite certain. what he meant to accomplish by this eruption of candor; except the virtue of honesty itself. Indeed, after his bizarre interlude with Fiona, in which Helen had not been so much as a momentary thought, he had no idea whether this fact was any better than convention. But clarification was called for, and Margy, whatever his admiration, was not his destiny. The news had the predictable effect. Her pupils took on the contracted look they might have in strong light. He had cast her again in her inevitable role: once more, the loser; the flop-and-drop gal. She was not pleased. Margy, like everyone else, wanted a better life than the one she had.

  "Nice for you," said Margy. She snatched her purse, Closed her case, smoothed her skirt as she msc, grazing him with a tight, penetrating smile. What was the poet's phrase? Zero at the bone. She had put on again her blank tough-guy look that she brought to business meet'mgs, once more Dixon Hartnell's hard-ass hired hand.

  They walked the three blocks to the courthouse in virtual silence.

  Stern's only remarks were directions: Just up there wc turn. They were escorted back to Klonsky's narrow office at once and Margy settled herself in the old oak armchair like a rider in the rodeo. She was ready.

  "Margy," she said, when Klonsky asked what she liked to be called. "Hard g." Hard g, indeed, thought Stern. Like a diamond drill.

  They had arrived late, and Klonsky cast an eye up at the clock. Time before the grand jury was assigned by a deputy court clerk in quarter-hour intervals and was zealously guarded by the Assistants, who were always pressed to get their business done in the period allotted.

  Klonsky began questioning Margy, even while Stern was reviewing her nonsubject letter. It was signed by the U.S. Attorney himself and assured Margy that she was not suspected of any criminal involvement, assuming she told the truth before the grand jury. Stern put the letter iny this eruption of candor; except the virtue of honesty itself.

  Indeed, after his bizarre interlude with Fiona, in which Helen had not been so much as a momentary thought, he had no idea whether this fact was any better than convention. But clarification was called for, and Margy, whatever his admiration, was not his destiny. The news had the predictable effect. Her pupils took on the contracted look they might have in strong light. He had cast her again in her inevitable role: once more, the loser; the flop-and-drop gal. She was not pleased.

  Margy, like everyone else, wanted a better life than the one she had.

  "Nice for you," said Margy. She snatched her purse, Closed her case, smoothed her skirt as she msc, grazing him with a tight, penetrating smile. What was the poet's phrase? Zero at the bone. She had put on again her blank tough-guy look that she brought to business meet'mgs, once more Dixon Hartnell's hard-ass hired hand.

  They walked the three blocks to the courthouse in virtual silence.

  Stern's only remarks were directions: Just up there wc turn. They were escorted back to Klonsky's narrow office at once and Margy settled herself in the old oak armchair like a rider in the rodeo. She was ready.

  "Margy," she said, when Klonsky asked what she liked to be called. "Hard g." Hard g, indeed, thought Stern. Like a diamond drill.

  They had arrived late, and Klonsky cast an eye up at the clock. Time before the grand jury was assigned by a deputy court clerk in quarter-hour intervals and was zealously guarded by the Assistants, who were always pressed to get their business done in the period allotted.

  Klonsky began questioning Margy, even while Stern was reviewing her nonsubject letter. It was signed by the U.S. Attorney himself and assured Margy that she was not suspected of any criminal involvement, assuming she told the truth before the grand jury. Stern put the letter in his case and looked on as Klonsky worked. She asked Margy questions, all of them routine, and wrote down the answers on a yellow pad.

  Wearing her prosecutor's hat, Sonia was like most of her colleagues, relentless, humorless, intense. Her pace was sufficiently methodical that Stern actually grew hopeful that the matter of the missing documents might not come up.

  That would allow him to have a pointed conversation first with Mr.

  Hartnell. But with only a few minutes remaining before they were scheduled to appear at the grand jury, Klonsky removed her tissue copy of the subpoena from the file and went through it, item by item. When Margy handed over the statements for the Wunderkind account, she added brightly, "T
hat's it."

  "That's it?" asked Klonsky, with an immediate look of apprehension. She glanced back to her papers.

  Stern, for the first time, spoke up. Somewhere, he said, there was a misunderstanding. The various account-opening documents-signature forms, applications, et cetera-seemed to have been misplaced and could not presently be located.

  A diligenf search had been conducted by Ms. A1-lison and would be continued, Stern stated, under his direction.

  "They're gone?" asked Klonsky. "TrashedT'

  Margy started to speak, butStern reached out to grab her wrist where a heavy bracelet lay. It was far too early, said Stern, to assume the documents could not be located.

  The. subpoena had been served barely three weeks agO, and MD was a substantial company with hundreds of employees and more than one offic "I don't believe this," Klonsky said. She largely ignored Stern and put a series of questions to Margy, identifying the documents, the copies, the places they were stored. She extracted, in more precision than Stern had, the details. of Margy's search. Conducting this inquiry, Klonsky was rigid and intent behind her desk. WhateVer her occasional geniality, Ms. Klonsky, when provoked, was quick to anger, She looked at Stern. "I'm going to have to talk io Stan about this."

  "Sonia," said Stern, "again, I think you are leaping unnecessarily-She cut him off with an ill-tempered wave of her hand, Clad in her familiar blue jumper, she bumped her belly a bit against her desk as she climbed out from behind her chair and led the way downstairs to the grand jury.

  When the judges had deserted the new federal building, they left the grand jury behind. The defense lawyers protested this propinquity to the United States Attorney's Of-rice, but it was recognized as vain posturing. For all practical purposes, the grand jury belonged to the prosecutors. An unmarked door in the corridor a floor below led into what looked like a doctor's reception room; it held the same inexpensive furniture, with cigarette burns and splintered veneers, as in the U.S.

  Attorney's Office upstairs. Behind two additional dOOrs lay the grand jury rooms themselves.