The man stared at Jerry, the pupils of his eyes narrowing to pinpoints. “Didn’t we already discuss this? Didn’t I tell you there’d be plenty of reward when we got to the end game?”
Jerry decided he wouldn’t back down this time. “I know we did, but things have changed. The risks are greater. I should be compensated for that.” Jerry couldn’t believe he got that out without stuttering.
“I see,” said the other man. “I’ve got to take a leak. I’ll think on it for a moment.” He slid out of the booth and suddenly, in a move so quick that Jerry couldn’t have seen it coming, grabbed Jerry’s hair and slammed his head against the back of the wooden booth. In the same moment, a knife appeared under Jerry’s left eye, its point perilously close to his bottom eyelid.
“Tell me again what I have to do, Haskins? What do you want from me? More money? You listen to me, you slithering lizard. I don’t take orders from you.” He pressed the knifepoint into Jerry’s cheek, drawing blood. “Tell me again.”
Jerry was in such shock that at first he couldn’t respond. “I-I-I’m sorry, I ssh-sh-shouldn’t have asked for more. It’s just that I’m so worried about Wainright fingering me.”
“Don’t you worry about Harry. He’s right where I want him to be. Now tell me, who was he cuddling with at the restaurant?” He pressed the knife harder into Jerry’s cheek to make his point. Blood flowed more freely.
“It was Nora Lincoln, the compliance officer. She was practically in his lap.”
“Really,” the man said, bemused. “I didn’t think Harry would ever have the balls to step out on Sandy.” He pulled the knife away and patted Jerry’s cheek. “See now, that wasn’t so difficult.” His voice turned grim. “Don’t make me do this again. The next time I won’t be so forgiving. He threw a twenty down on the table. The drinks are on me. Consider it a reward for your loyalty.” He turned and stalked out of the bar.
Jerry pressed a napkin against his cheek to staunch the blood flow. He grabbed his beer and took a long gulp. He was shaking so badly he thought he might pee himself.
Jesus fucking Christ, he thought. This guy is a goddamn lunatic. He signaled the bartender for another beer. What the fuck have I gotten myself into?
Chapter 32
Thursday, November 6
Nick and Sam were the first to arrive at Jordano’s offices on Thursday morning. They decided to wait in the reception area for the rest of the team. Sam was restless, pacing back and forth across the expensive Persian rug that covered the ceramic floor. He took turns cracking his neck, his back, his knuckles, anything to lessen the tension he was feeling. He was raring to go.
Nick, by contrast, sat quietly at one end of the couch. He tried to prioritize in his mind what the team needed to accomplish today.
He believed their best shot was to find an employee that knew enough about the way the firm worked, but wasn’t so high on the corporate food chain that they would be afraid to speak their mind. If they could get the right person talking freely, they might uncover enough details to steer the investigation in a productive direction.
The team had put together a good list with several strong candidates. Nick wanted to speak with these employees himself—it wasn’t a matter of not trusting his team. Nick wanted to be responsible for the interviews so there’d be no doubt that the right questions had been asked with the correct amount of deflection and subtlety.
Devon and Cameron arrived ten minutes later. Victor had remained at the SEC office to do follow up on the financial statements that were reviewed the day before. Nick wanted a financial comparison with other mutual funds that were the same size as Jordano, to see if the financial ratios they had calculated for Jordano were similar. Or more importantly, identify where their performance might diverge.
“Good morning, guys,” Nick said, greeting the others. He smiled briefly at Devon, who offered a smile back. After yesterday’s meeting, Nick had asked Devon to dinner on Saturday night, and she had accepted. He felt a new physical tension between them, an electric charge that hadn’t been there before. He convinced himself the feeling was emanating from Devon. He was happy to respond to it. “Ready to get started?”
The team nodded in unison. Nick approached the receptionist’s desk. “Could we see Harry Wainright? Tell him that Nick Doyle from the SEC is here.” Nick believed Harry was the best person to coordinate their day. Nick thought that Wainright would want to be aware of the SEC’s presence when the investigators were on-site. He also believed that the manager could remove any obstacles the SEC team may face in gaining access.
The young girl behind the desk looked pained. “I’m sorry, but Mr. Wainright isn’t in the office today. Is there someone else that I could call for you?”
The air seemed to go out of the team, as if a child’s balloon had been popped. Sam groaned audibly and walked away from the desk.
“How about Jack Walsh? Is he here today?” Nick tried to keep the sarcasm out of his voice. He couldn’t believe anyone on the senior management team would be unavailable with the regulators breathing down their necks. He didn’t need this hurdle at the start of their day.
“Yes, he’s here. Let me see if he’s available.” The receptionist turned away to call Jack’s admin. She spoke quietly into the phone for a moment before hanging up and turning back to Nick. “Mr. Walsh will be down shortly to escort you to a conference room.”
“Thank you,” Nick responded. First crisis averted.
*****
Nick’s team spent the morning reviewing the transaction details for the mutual funds covered by the subpoena. Jack Walsh asked Nora Lincoln to run several reports based on the criteria they requested.
Nora agreed to do that quickly, and she provided the reports within an hour.
In the meantime, Nick requested brief interviews with several members of the operations group that worked with Julie Monroe. Although he couldn’t yet prove it, Nick believed there had to be a connection between her murder and the information provided by the confidential informant. He was very interested in speaking with Marcy Phillips who, he had learned from the police detective, was Julie’s closest friend at the firm. He believed that Julie might have brought Marcy into her confidence if something had been troubling her.
Nick looked at his watch: almost 1pm, his appointment time with Marcy. He rose from his seat and told the team he’d be back in about thirty minutes. Sam looked up from the reports that were spread before him on the conference table. “Give‘em hell, boss.” Nick walked across the floor to the conference room that had been reserved for the interviews.
Marcy Phillips was seated at the far end of the table waiting for him. He reached out to shake her hand. “Thank you for taking the time to meet with me, Ms. Phillips. I’ll try to keep this as brief as possible. I realize you’re very busy.”
Marcy reached out to shake his hand. It was slightly damp.
Probably nervous, he thought.
“Good afternoon, Mr. Doyle.” Marcy’s voice had a wispy quality to it, as if it would break if it got too loud. “I appreciate that.”
Nick wanted to find the right approach, and he thought it would be best to stay away from Ms. Monroe’s murder at the start of the interview. He wanted the woman to be comfortable and relaxed.
“Can you tell me a bit about yourself, Ms. Phillips? A brief history of your time with the firm would be helpful. I understand you’re a portfolio administrator, and you reported directly to Julie Monroe.”
“Yes, that’s right. But please call me Marcy. Everyone does.” Nick smiled his agreement.
“I’ve been with Jordano for five years. I started as a junior administrator after graduating from Bridgewater State. The pay wasn’t great, but I was still living at home at the time, so I could manage.” Marcy took a deep breath. “After I was here about a year or so, I transferred to Julie’s team. I immediately loved working for her. She was the best person – always supportive and helpful, but able to still get her message across without bein
g demeaning or confrontational. Julie and I became very good friends.”
Marcy’s voice caught, and she looked away for a few seconds before wiping her eyes.
“I can’t believe what happened to her. Who would do such a thing?”
“I’m sure the police are working hard to solve her murder,” Nick said sympathetically. He wanted to keep Marcy focused. “Can you tell me what a typical day for a portfolio administrator is like?”
“Okay. First, we’re very busy. The company has grown quite a bit during the past five years, and it‘s been difficult with our current staffing levels to keep up with the work. Julie did a lot to improve procedures and establish policies, but it’s still a challenging environment.”
“I heard about a large transaction that wasn’t processed correctly on the day that Ms. Monroe disappeared. Can you tell me what happened?”
Marcy grimaced. “Yes, that was a big mistake. A new client, Sierra Health, was moving their 401k business to Jordano. A total of about 240 million dollars. Sierra and Jordano agreed the wire transfer would be processed on October 16th, and the transaction would be priced at the close of business that day. We received the money from Sierra, but we failed to complete the purchase transaction. I did the initial part, and Julie was supposed to do the quality control step to finalize the purchase. But for some reason she didn’t.” Marcy looked away. “Although she told me she had done it. She must have been confused. And then she left the office early because she wasn’t feeling well. I should have checked on the transaction myself. It was that important.”
“Can’t the firm just modify the transaction date back to October 16th so that it can be completed like it should have been?” Nick asked. He knew this was typical functionality that most shareholder systems would allow.
Macy nodded. “Yes, usually that’s what we would do. But this transaction was so large, it required additional oversight. We were making purchases into several funds using a pre-determined ratio that was provided by the company.” Marcy paused, thinking back to that day. “The other problem was with what the stock market did the next day, on October 17th.”
“And that was…” Nick pressed.
“The market was up almost four percent that day. So Jordano needed to honor the purchase price from October 16th with shares that now cost four percent more. That means that the firm had to make up the price difference between the lower price on October 16th and the higher price on October 17th.” Marcy lowered her voice and leaned forward. “I heard the company had to pony up over three million dollars to settle the difference. There’ve been a lot of meetings going on with senior management on how to resolve the problem. And considering all of the shouting that I’ve heard, it doesn’t sound like those discussions are going well.” Marcy looked chagrined. “Geez, I probably shouldn’t be saying all of this to you.” She pursed her lips as if to say she was done speaking.
Nick realized the information he had just gotten was gold. It put into context some of the things that the confidential informant had told them. Nick wished that his boss could convince the informant to come forward so they could work more effectively together. And he believed that Julie Monroe was the key. Since Marcy had brought up their relationship, Nick decided now would be a good time to explore that more deeply.
“I realize the loss of Julie is a terrible shock for you and others on her team,” Nick began. “Did she seem troubled with anything during the past several months? Was there any change in her behavior that you feel is worth noting?”
Marcy thought for a moment. “Julie did seem distracted, which was very unlike her. I’ve never known a more organized and efficient person. She had all of her ducks in a row. But I attributed her distraction to the pregnancy. She was very excited about the baby, and couldn’t wait to be a mother.” Marcy pulled a small tissue from her pocketbook to blow her nose and wipe her eyes. “I’m so sorry. This is still so raw.”
“Completely understandable,” Nick empathized.
Marcy cleared her throat to continue.
“Julie may have been struggling with finances at home.” Marcy lowered her voice, as if someone might overhear her. “She told me that Bob, her husband, was gambling a lot. She knew having a baby was going to be expensive, and bills were already piling up.” Marcy paused. “She was worried.”
“How about Julie’s behavior here in the office? Were there any unusual events, or exchanges with co-workers that struck you as out of character?”
”Nothing that comes to mind—wait, there was one thing. About a month ago, I returned to the office after hours because I had forgotten my cell phone. I heard voices coming from one of the conference rooms down the hall. I could tell it was Julie, and she sounded upset. I couldn’t really hear what was being said, but she was having an argument with someone.”
“Do you know who Julie was with?”
Marcy nodded, looking pained. “It was Jack Walsh.”
Nick absorbed this piece of news without changing his expression, but inside his head he felt the first door unlocking. “You’re sure you didn’t hear what was being said? Not even a few words?”
Marcy shook her head; she was clearly trying to remember any other details.
“Wait, they must have been finished because I heard the door open. Then I heard Jack say something like, ‘Just do what you agreed to, and all your problems will be gone. You can have your baby, stay at home as a mother should, and enjoy it without worrying about paying the electric bill.’ I didn’t really think much of the comment at the time. But now that I look back, there was something about the way he said it that struck me as odd.”
“What was that?”
Marcy looked directly at Nick.
“It sounded like a threat.”
*****
Nick interviewed two other Jordano staff members before returning to the conference room where the team was working. He hadn’t garnered anything of substance from the other employees. His mind was spinning with possibilities, though, from the details he had learned from Marcy Phillips. If there was a link between Julie Monroe’s murder and the informant, maybe the key was Jack Walsh. He decided to ask Sam and Devon to look more closely at the senior manager. Nick stopped at the water cooler to get a drink. When he got back to the conference room, the team was huddled around Sam. There was an excitement, a vibe of sorts, that hadn’t been there when he left earlier.
“What’s going on?” Nick asked. Devon looked up, eyes sparkling. “Sam found a pattern of transactions that indicates someone has been manipulating transaction dates. If he’s right, we definitely have a fraud situation.”
“Tell me the details. Then I’ve got some news to share with all of you.”
“Okay,” Sam replied. “Here’s what I’ve got so far. You have to look at the situation from a macro level across the seven funds that are included in our subpoena. That way you can see a pattern. First, there are more transactions in the two-thousand dollar price range than you’d expect to see in such a short period of time. Second, many of these transactions were posted between October 17th and October 20th. The date of the botched purchase for Sierra Health was October 16th.”
Sam pulled out a piece of graph paper.
“I charted the as-of transactions that occurred from October 10th to October 30th.” Sam pointed at the spike that rose above the dates of October 17th and 20th on his graph paper. “Look at how only a few adjusted transactions occurred on most days. Then see what happened on these days just after the Sierra Health purchase. When you consider the total transaction volume each day, compared to the size of the increase seen on these few days, it’s statistically significant. There’s no way that happened randomly.”
Nick was impressed. “Good work, Sam. This is credible evidence that Jordano committed fraud on their shareholders. Now we need to figure out why. And your information supports the story that I got from Marcy Phillips.”
Nick recounted his meeting with the portfolio administrator.
�
��If somebody was trying to hide the operational error that was made with the Sierra Health transaction in such a way to mitigate a loss for the firm, they might try to spread the cost across many shareholders so that the impact on each account was minimal. Based on Marcy’s description of the events, we may also have fraud conspiracy counts to consider. There’s no way a single person could pull off a scheme this complex. This plot required participation from many areas of the firm.”
Nick paused briefly to sip from his water.
“To perpetrate a fraud such as this is pretty brazen. If transactions were posted on October 17th instead of the correct date, the shareholders paid a higher cost than they should have. These shareholders deserve restitution from Jordano.”
Nick looked at the team gathered around the table.
“Good work, all of you. Devon, could you work with Sam to summarize his findings? I’d like to review the summary tomorrow with Director Mitchell so that we can quickly determine next steps. We’ll want to move on this as soon as possible.”
Devon blushed slightly at being singled out. “Sure Nick, I’d be happy to write that up.” She turned to Sam. “Could we get together first thing in the morning so that I can get started on it?”
Sam looked at Nick, then at Devon, and then back at Nick. A light bulb seemed to go off in his head. He smirked slightly. “Devon, I’d be thrilled to help you summarize our results.” Devon turned a brighter pink. Sam winked his left eye at Nick – the eye that no one else in the room could see.
Nick glared at him before regaining his composure. He checked his watch. “It’s getting late, guys. Let’s wrap up and get out of here. Tomorrow will be here before you know it.”
Chapter 33
Thursday, November 6
Shell Game Page 14