“We have visual. License number zero-two-one I-H-G on a gray pickup. Two suspects inside,” he said over the radio.
“Copy that. They’re all yours. Good luck,” replied Piechuta.
She’d tracked the pickup by satellite from the LA stash house to Carlsbad on Interstate 5. As usual, it appeared to be heading toward the Mexican border at Tijuana, fifty miles further to the south. It was now the responsibility of the agents in the SUV to follow the truck.
Around four o’clock each afternoon, a small line began to develop at the border crossing into Mexico. The pickup was next in line, with the SUV two cars behind. When the agents were confident the pickup was blocked in, they jumped out of their vehicle, pistols in hand. They rushed over to the truck and pulled open its doors, catching the two Mexican bag carriers off guard. They were rarely any trouble. Bag carriers were expendable and not expected to put up much of a fight if caught.
“Step out of the truck and hit the floor,” shouted one of the agents. The two Mexicans lay face down on the ground as they were being cuffed. Another agent climbed into the pickup and, after flashing his badge to the border guard, drove it over to a special holding area. After the Mexicans were put into a holding cell, the three agents spent the next few hours examining the holdalls, which, as expected, were found to contain US currency, just over three million dollars in total.
Chapter Nine
Sarah Kent was a consultant psychologist at a hospital in Nottingham. Like Kent, she came from a very modest background and was the first in her family to go to college. They met at Cambridge University, where they became close friends and fell in love. After college, Sarah returned to her home city of York, while he went off for a year to do his MBA at Harvard. They missed each other while he was away so, when he returned, she joined him in London, where he’d started training with the private equity arm of a US investment bank.
Sarah had watched her husband’s rise through the ranks, achieving this entirely on merit. Kent had a nose for a good investment and soon started making a lot of money for himself. Most years at the investment bank, he earned seven-figure bonuses. Money was important to him as a way of keeping score. He strove to be the best at everything he did; he had to win. His unspoken fear was that, if he ever stopped winning, his life could one day revert to the poverty of his childhood. He’d seen his mother struggle for years bringing up a family singlehandedly. He knew what life was like having to worry about where the next meal was coming from. While it was unlikely he’d face poverty again, the motivation to succeed was deeply ingrained in him. Sarah had often said she’d like to have him in her patients’ chair so she could find out what it was that drove him to make more and more money. They’d never argued about it, but Kent knew it wasn’t a compliment. She’d been telling him to slow down for years.
“How was your day?” Sarah asked when Kent arrived home from work.
“Great, and yours?”
“Oh, you know, the usual.”
Kent didn’t ask anything more. He admired the work Sarah did, and he knew how good she was at it, but he found many of the problems faced by her clients depressing and preferred not to hear about the details. He believed everyone had it within them to make a success of their lives no matter what their background. He found it difficult to understand how many of Sarah’s patients remained mired in problems emanating from their past. After all, he’d escaped a poor childhood and didn’t allow his past to weigh him down.
He changed the subject to the Henderson Wright deal, and how it had the potential to become the best deal ever for CBC. He was in full swing when the phone rang. He picked it up.
“Hello, John Kent speaking.”
“John, sorry to bother you at home like this. It’s Paul.”
Kent was surprised his partner was calling him at home. There was an unspoken rule at CBC that the partners did not trouble each other at home unless it was absolutely essential. Kent was not really that bothered about it. He never switched off from the business, but he knew Sarah objected to the intrusion of his work at home so he discouraged such calls.
“Paul, you still on holiday in New York? I’ve heard the Met’s worth seeing.”
“I wish it was a holiday. I need one after the day I’ve had.”
“You’ll get a flight soon.”
“Look, something very important has come up.”
Kent sensed concern in his partner’s voice. He knew he was not one to exaggerate, and so braced himself for bad news. Prentis had been in private equity for twelve years, most of it with CBC. Before coming into the industry, he’d been an army officer and had served in a number of armed conflicts. Now in his early forties, he was tough and not easily spooked.
“Go on. I’m listening.”
“As soon as Tara sent over the Henderson Wright drawdown notice earlier today, I took it over to the CFO at Grampian Capital. What she said was alarming.”
“What did she say?”
“She told me their CEO, Dan Schaeffer, was dead.”
“What happened? He’s only my age.”
“He’d been missing since yesterday. They found his body in the East River this afternoon.”
“That’s awful. Shouldn’t affect us, though.”
“That’s not all she told me, John.”
“Christ. There’s more?”
“She said Grampian doesn’t have the money to meet our drawdown.”
“Eh?”
“I know. This is an SEC registered public company with a market value of $100 billion for God’s sake!”
“What do you mean, they don’t have the money? They represent virtually our entire fund.” Kent rubbed the crown of his head.
“That’s all she would tell me. I pushed her hard, but she wouldn’t say any more.”
“That’s unbelievable. How can a highly rated Wall Street institution struggle to meet its drawdown commitment? This is chicken feed for them.” He slumped onto a kitchen stool.
Sarah stopped preparing dinner. “Are you okay?” she whispered. Kent shook his head no. She sat next to him.
“The only other thing she’d tell me was they’d be making a formal announcement to the market after it closes at four o’clock New York time.”
“That’s one hour from now. This sounds like a sack of shit is about to land on us. Who else have you told about this?”
“Nobody. I’ve only just left their offices. There were lawyers everywhere, John, and a real sense of panic around the building. I think they may be about to fail.”
“That would be a disaster for us. I hope you’re wrong about that.”
“I hope I’m wrong, too, but it certainly felt like a sinking ship over there.”
Kent knew the announcement would contain dreadful news. He could just sense it from Prentis’s voice. If it had been any of his other partners, he’d have left it for a couple of days to see what happened, but Prentis was the last person in his team to hype a story and he usually had good instincts. Kent felt a tightening in his stomach as he contemplated the prospect of Grampian failing.
“Okay. I’m calling a partners’ meeting for nine o’clock tonight. I want you to call into the meeting from your hotel. I’d like you to give the partners a blow-by-blow account of your conversation with the CFO.”
“No problem. Speak to you in an hour’s time.”
Kent explained the situation to Sarah, who’d been waiting to hear the news. She insisted on coming to the office with him. He rang Tara and asked her to have all of the partners meet him in the boardroom just before nine. “Tell them to drop whatever they’re doing. Tell them this is massively important. I want them all there,” he said.
They jumped into the BMW, kicking up gravel as they sped away.
They reached CBC’s offices at eight fifty. “Can I leave you to find Tara?” asked Kent as they jumped out of the car.
“Will she be in your room?” asked Sarah.
“Yes. I’ll go straight to the boardroom and speak to the o
thers.”
Kent ran up the three flights of stairs to the boardroom while Sarah took the elevator to the fourth floor and sat in Kent’s office.
Tara came rushing in. “What’s this all about, Sarah?” She sat on the opposite sofa. “John didn’t say much on the phone. He sounded really worried.”
“I don’t know that much about it myself, but John is going to brief everyone at nine. He said you should join them.”
“Okay. I’d better get down there. Do you mind helping yourself to a drink?”
“Don’t worry about me. How is your mother, by the way? John told me she’s living with you now. I’ve just realized you must have left her on her own to come here tonight.”
“Thanks for asking. It’s no problem. I got my sister to come over to sit with her.”
Tara made her way to the boardroom to find Kent. The other partners were already there and were grilling him on what had happened to require a meeting at such short notice. He told them what he knew then asked Prentis, who was already participating in the meeting by phone, to tell everyone exactly what happened earlier in the day when he was at Grampian. As Prentis finished, Kent told them to watch the TV news report about to start. Tara turned up the volume.
“The financial crisis claims another major financial institution,” announced the anchorwoman. “This afternoon, Grampian Capital has filed for bankruptcy, blaming massive and unforeseen losses in its insurance division, which had been a major underwriter of mortgage-backed securities. A spokesman for the company said Grampian Capital had spent weeks in secret discussions with the Fed about a possible bailout, but no rescue offer had been received. In a dramatic twist to this breaking story, the body of Grampian’s CEO, Dan Schaeffer, was found in New York’s East River a few hours ago. Also making the news at this hour…”
Kent asked Tara to turn down the sound then he looked around the table at his partners. The room was silent. Kent assumed they were reaching the same conclusions as he was. Without Grampian, CBC would have no investment funds available. Grampian had committed seven-and-a-half billion pounds of the ten billion pound latest fund. Without their commitment, the remaining two-and-a-half billion pounds of commitments would have to be canceled as they’d been raised on the understanding that this capital would be invested alongside the Grampian cornerstone monies. CBC was about to go over a cliff.
Chapter Ten
At the rear of the Monterrey branch of Banco del Comercio Internacional de México ran a quiet street which was used as a service entrance for the buildings fronting onto Avenue Colon. The bank closed at four p.m. on weekdays, later by appointment.
Just after four thirty that afternoon, a gray, high-sided security truck drove into the service street and came to a halt behind the bank. Without prompting, the metal shutter doors at the back of the bank building were opened, and the truck reversed into the loading bay, filling the air with diesel fumes. The shutter doors closed. Three men jumped out of the truck’s cab. One handed papers to the waiting bank official, another walked to the back of the vehicle and lowered the tail lift, while the third watched everything as he lit up a cigarette. There was no discussion; this was a daily procedure, and everyone knew his role.
Once the tail lift was down, the cigarette smoker raised an eyebrow to his two colleagues, who began unloading brown sacks. The printed label on the side of each bag read: “Corolla Currency Exchange.” This was a Caruana cartel controlled company, operating some six hundred currency exchanges all over Mexico. It was the largest currency exchange in the country and growing fast. Jivaro had bought the company when it operated just forty outlets, at a price which the vendor could not refuse.
There were exactly forty sacks, and it took the two men thirty minutes to finish unloading and placing them on the bank’s industrial scales. Each one weighed exactly the same, just under seventy five pounds, and contained seven hundred and fifty thousand dollars in identically mixed US Dollar notes.
The bank official did not look inside the sacks; he didn’t need to. He signed the paperwork and handed a copy to the men before ringing a bell at the side of the loading bay. A group of bank employees came running through to the loading area and began hauling the sacks into a safe holding room. As soon as the paperwork was signed, the money became the bank’s responsibility.
The cigarette smoker was Arturo Vargas, a man in his late thirties with a penchant for smart, Italian suits. He always wore a diamond stud in his left ear. Vargas joined Corolla Currency Exchange two years ago from the Mexican National Police. He’d been responsible for the arrest of a number of Caruana cartel senior lieutenants and soon after made it clear he was open to offers for their release. A month later, he was recruited by the cartel. The money he was now making made his seven hundred dollar a month police salary look like small change. Vargas still had good connections within the National Police which were vital to the cartel. He was very good with numbers and was soon promoted to run Corolla.
Vargas ran an operation with two thousand people on the payroll. He reported directly to the cartel’s CFO as it was a critical position. His role was to oversee the collection of money from the currency exchange outlets and to combine this with the illicit drug proceeds coming over the border from the US. Then he’d arrange to deposit the combined monies in the cartel’s three favored Mexican banks. He had to account for it all, so he took hands-on responsibility for the physical deposits at the banks. He liked to see the money arrive. Nothing had gone missing on his watch and that was the way it was going to stay.
Later that day, Vargas received a visit from his boss. His visits were always unannounced. The Caruana CFO was Raul Safuentes, Jivaro’s younger brother. While Vargas had never met Jivaro, he thought his brother lacked Jivaro’s reputed charisma. While Jivaro was a big man, Raul was short and skinny. While Jivaro was concerned with strategy, Raul was comfortable immersed in the detail and, like Vargas, nothing made him happier than well-kept records and books that balanced.
The surprise visit to Corolla that day yielded no unusual or suspicious transactions. Vargas ran a slick operation; it was rare for any errors to be discovered. After reviewing the accounting records with his boss, Vargas took Safuentes to dinner at his favorite restaurant in the San Pedro district of Monterrey. It was an Italian restaurant tucked away on a side street, just as his boss preferred.
“Good evening, Mr. Vargas. I have you in this quiet corner,” said the hostess. Vargas always sat away from the window. He ordered cocktails and tried to make conversation, but Safuentes was hard work and offered little in return. He lightened up as the meal came and the red wine began to flow.
“Jivaro has noticed you, Arturo. I’ve kept him informed of your good work at Corolla. He has plans for you,” said Safuentes.
“I’m, of course, happy to help in any way I can. I still have much to do here, but if Jivaro would like me to take on other responsibilities, then I’m certain I wouldn’t disappoint him.”
“He wants you to join my team at head office.”
“I don’t know what to say.”
“There’s an increasing workload as our organization expands. You’ve seen the growth in deposits for yourself.”
“The growth has been impressive. We had only two hundred branches when I joined two years back. Now look at us.”
“Believe me, depositing the cash is just the start of our work. We need intelligent and loyal people like you to help us preserve the money we’ve worked so hard to make.”
“What would my new work involve?”
“You’ll be helping me transfer funds to our various investment managers around the world. But more importantly, we must monitor their investment performance, and you will be part of that process.”
“Vital work.”
“There’s nothing more important than this. It’s the final stage of converting our cash into legitimate assets. Jivaro himself takes an active interest in this area of our work. You will have many opportunities to impress him.”
“Then it is settled. I’ll make the arrangements.”
“What will happen to my position at Corolla?”
“You’ll be a hard man to replace.”
“I have a few suggestions.”
“We can discuss that later.”
Chapter Eleven
For the first time in his life, Kent did not know what to say. He felt the weight of his partners’ hopes and expectations that he’d come up with a plan. He’d always been the one to work out a clever way through difficult situations facing the firm. It was one of the things his partners valued in his leadership. No matter what the problem, Kent would always find a solution. But, this one time, he struggled to see a way out; he hadn’t been here before. He felt like a champion boxer having just received his first knockout punch. He was on the ropes.
“Doug Wright is going to go ballistic when he hears the news,” said Kirkland, breaking the silence. “He terminated his discussions with the other firm the moment he signed our offer letter today. He’ll sue.”
“At the moment, I don’t give a shit about that clown. We’ll deal with Henderson Wright tomorrow. First, we need to assess what this means for us and how we’re going to move on from here. Let’s all sleep on it and meet up at eight tomorrow morning. Cancel any appointments you have,” said Kent, standing up to leave.
He needed time to think this through on his own. There had to be a way forward. Maybe, there would be something rescued out of the bankruptcy process. He wanted to sleep on things before making any snap decisions. The other partners stayed seated, staring at the images on the silent TV like blinded rabbits.
“There’ll be a way through this,” he said as he left the boardroom.
On the drive home, Kent was quiet as he contemplated the reality of losing his firm. A decade’s work down the drain, and a lifetime’s reputation torn to shreds. He might just have accepted this if CBC’s investment performance had been poor, but it was one of the best in the industry. He couldn’t accept the injustice of it all. What made it worse was losing CBC’s investment firepower just when the recession was throwing off great buying opportunities. That morning, he had a large checkbook and an increasing choice of attractive investment deals in the middle of a recession — a buyer’s paradise. He’d never be able to create these ideal conditions again. Grampian had ruined a once-in-a-lifetime situation. Had he been wrong to rely so heavily on them for investment capital? Should he have spent more time on the fundraising road for the third fund and spread the commitments across a wider group of institutional investors? It was too late now, anyway. He couldn’t change that.
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