I kept Rochester in my office, pacified by treats and rawhide bones, though he was eager to get out and be part of what was going on. When Doug Guilfoyle showed up, I hooked up Rochester’s leash and the two of us walked him over to the dormitory building.
The monks who lived at the Abbey of Our Lady of the Waters, as Friar Lake had been called back then, were housed in narrow cells with a communal bathroom at one end. Our renovation of the dormitory building had created a series of hotel-type rooms with en-suite bathrooms. We had retained many of the details of the original building, including the hardwood floors and stucco walls, and each room got a narrow floor-to-ceiling window that looked out at the grounds.
I’d hired Mark Figueroa to help out with the choice of furnishings, and he’d done a great job. Since the rooms were fairly narrow, we had incorporated the closets and cubbyholes the monks had used, instead of buying armoires for each room.
That way, we had managed to fit a double bed, night stand, desk and chair. Instead of televisions, which were big, expensive and probably not going to be used much, we had stocked each room with an iPad connected to our T1 line, and access to cable movies and television shows.
Doug and I went over a couple of details, and then I led Rochester down the hall to the room where he and I would be spending the weekend. My room was like Doug’s, only my view was of the hillside and the lake. I sat on the bed and Rochester jumped up beside me, and I petted him for a few minutes, then gave him a rawhide bone to chew.
“I’ll bring you something yummy from dinner, puppy.” I scratched him behind the ears, but he was more concerned with his bone.
The caterer had sectioned off the nave of the abbey chapel for cocktails with a pretty, if incongruous Japanese screen, and as I arrived a young guy in a white shirt and black slacks was setting up an array of liquor bottles, with wine and beer in coolers to the side. I’d found a CD of Gregorian chants, and I set up the audio system to play it at low volume, then opened the front door and began welcoming people inside.
Most of the crowd looked like they’d come directly from work, lots of dark business suits and shiny loafers. They all had name tags with their first names in big letters, then last name and home city in smaller type below. All Eastern alumni had their year of graduation as well.
I slipped behind the screen to check the dinner setup in the apse. Seven round tables of six were set with glasses, plates and silverware. Napkins in light blue, one of Eastern’s colors, had been folded into the shape of cardinals’ hats, to match the abbey setting. Joey had hung an Eastern banner behind the speaker’s podium along with the Eastern flag hanging limp on a pole beside it.
Through an open curtain, I saw servers buzzing around the impromptu kitchen. Confident everything was under control, I returned to the cocktail party, where Eastern’s president, John William Babson, had just arrived. He was tall and rawboned, and when he spoke about the college he bubbled with enthusiasm. He had deep green eyes and dark curly hair, and that evening he was wearing a snazzy Italian suit that made me feel underdressed in my khakis and Eastern College polo shirt.
“Looks terrific,” he said as we shook hands. “Congratulations. This center is going to be one of the jewels in Eastern’s crown.” He looked around the room. “Where’s Fred Finkle? I need to talk to him.”
“Still in the hospital,” I said. “You didn’t know?” I told him about Finkle, and Doug Guilfoyle as his last-minute replacement.
“You think this fellow can manage?”
“He’s an Eastern alum. That’s what we train them for, isn’t it? To handle every situation life throws at them?” They were his own words, so I figured he’d agree.
Babson laughed. “You’ve been listening to my speeches for too long, Steve.” He looked at the crowd. “Now, point me toward any alumni I can talk to about fund-raising.”
I sent him on his way and then looked around for Doug. It would be time to move in to dinner soon and I wanted to make sure to introduce him to Babson before then.
I felt a thrill of anticipation. My first program was about to begin. The baby I’d been nurturing for eight months had come to term, and finally I’d have a birth to celebrate.
5 – Most Likely To
When Doug walked in to the chapel, I met him and escorted him over to Babson. As I scanned the room I recognized Doug’s boss, Shawn Brumberger, from his photo on the Beauceron website. He wore a well-cut dark suit, a starched white shirt and a blue Eastern College tie patterned with yellow rising suns. His short dark hair was tinged with gray and artfully arranged to cover a bald spot.
I walked over and introduced myself, then led him to where Doug and Babson were talking. Babson said, “Thank you for lending Doug to us for the weekend. I’m sure he’s going to do a terrific job.”
“He was a great catch for us,” Shawn said. “Nearly twenty years on Wall Street. What he doesn’t know about municipal bonds isn’t worth knowing.”
“Eastern alumni are the best hires you can make,” Babson said. “We pride ourselves on providing a well-rounded liberal arts education that will help our graduates succeed no matter what path they take.”
I’d heard Babson’s patter so often it washed over me, but Doug and Shawn smiled and seemed to agree. I left them and walked around the room to make sure everything was going smoothly. I snuck back to my room for a few minutes to feed Rochester and make sure he had water, and promised to come back after dinner and take him for a long walk.
A few minutes after I returned to the chapel, the caterer removed the Japanese screen and invited us all to take seats at the round tables. I sat up at the front with Babson, Doug and Shawn, and we were joined by two alumni participants.
We all chatted over a wedge of iceberg lettuce dusted with blue cheese, chicken cordon bleu, roasted heirloom potatoes and fingerling carrots, and after the dinner plates were taken away, I snuck back to the kitchen and assembled a doggie bag for Rochester. I went out the back door of the chapel and delivered Rochester his treats, then returned to the table for dessert.
As we were finishing, Babson stood up and gave a brief speech about his plans for Friar Lake, that it would be one of the premier academic conference centers of the east coast. Then Doug spoke for a few minutes about what people could expect the next day. He asked them to come to the morning session with a list of places where they got financial information, and told a couple of stories from his Wall Street days.
We reopened the bar in the nave of the chapel, and though many of the guests went to their rooms, a dozen stuck around over snifters of brandy and tall glasses of Irish coffee. When Doug and I were the last two left, we walked outside into the cool darkness, the sky above us spangled with stars.
“So what have you been doing since graduation?” Doug asked me.
I told him about the work I’d done, how I’d taught myself HTML and moved into web development. “Then Mary had her first miscarriage and ran us into credit card debt with some retail therapy.”
“That’s tough,” Doug said.
“Yeah. Around that time a guy I worked with passed on some hacking software to me, and I picked up some extra cash doing some freelance projects.”
“You’re a hacker?”
“That’s what the state of California calls me,” I said, trying to make light of my conviction. “I might have gotten off with a slap on the wrist as a first offender, but I broke into some companies that took offense.”
I took another sip of my brandy and told him the rest of the story – the year in prison, the two years on parole.
“You sure wouldn’t have been the guy in our class voted most likely to go to prison,” Doug said. He was quiet for a moment, and I worried that he was going to judge me because of my criminal background. Instead, though, he said, “You know about computers, right? Since I was able to help you out here, maybe you could return the favor.”
“Just ask,” I said. “I need to take Rochester out. You want to come with us and tell me what y
ou need as we walk?”
He agreed, and we went back to my room to retrieve Rochester. He was sprawled on his side on the floor, snoring and making small whimpering sounds. I squatted down beside him. “What’s the matter, boy? You all right?”
In a flash, he was up from his after-dinner nap and jumping around me, licking my face and hands. “Come on, let’s go for a walk,” I said, grabbing the fur around the back of his neck for balance so I could stand up. I hooked up his leash, grabbed a flashlight and a plastic bag, and the three of us walked outside.
“What do you think I can help you with?” I asked, as Rochester tugged me forward.
“I’ve only been at Beauceron for a couple of months but I’m worried that there might be something not quite kosher going on,” Doug said. “I need to keep this job because I need to stay close to my kids, and this is the only job I could find in the area. But at the same time, I could lose my license if I’m know about criminal activity and I don’t report it.”
The night was quiet and almost spooky. Friar Lake was located at the top of a low mountain a few miles from the Delaware River, surrounded by farmlands and a couple of new suburban developments. Beyond the stars above, the only light came from the couple of street lamps and a few windows in the dormitory. We walked on a paved path that ran beside the woods, which were dark and deep.
“What is it that you think I can help with?”
“Do you know what a Real Estate Investment Trust is?” he asked.
I nodded. “I have some of my retirement money invested in one.”
“At Beauceron, we have a number of our own funds that customers can invest in, and one of them is an equity REIT. We take investor capital and use it to provide first and second mortgage loans to commercial operators—apartment houses, shopping malls, that kind of thing. A lot of the properties are risky and they pay us high interest, which we pay out to our investors. It’s our best-performing fund by far – double-digit returns, which in this economy is phenomenal.”
“Sounds too good to be true.” Rochester stopped, nosing around the base of a maple tree with a gnarled trunk. The air smelled fresh and humid.
Doug took a moment to collect his thoughts. “After Catherine and I sold the house in Westchester, I lived in Hoboken for a while. Last week I went up there to talk to a guy I knew who might be a client, and on my way back, I was driving down US 1 near Newark airport, and I remembered that our REIT had invested in a property near there. I thought it would be fun to drive by and see what was generating all this revenue.”
We started walking again. “What kind of property?” I asked.
“A strip shopping center called Route One Plaza, anchored by a grocery store at one end and an electronics outfit at the other. But when I got there, both the big stores were shut down, and there were only a couple of small businesses still struggling in the middle.”
“So a bad investment,” I said.
He shook his head. “Not according to our books. We’re still carrying that property as income-generating.”
“Could there be something you don’t know about?” I asked. “Maybe there’s a bankruptcy trustee who’s keeping up the payments or something like that.”
He shook his head. “I checked, and the limited partnership that owns the center isn’t even paying the property tax. There’s already a tax lien for more than the land is worth.”
Rochester finally found the spot he’d been looking for, and popped a squat to do his business. I juggled the flashlight and the plastic bag, and it wasn’t until I was finished that Doug continued.
“Here’s the thing,” he said. “I need some help going through the list of properties that the fund invests in and checking each one out. I don’t have the computer skills to do all that research, and I’m so busy scrambling for clients I don’t have the time either. Is there any way you can help me out?”
We stopped again beneath a lamp post, and I looked at Doug. “What are you going to do with this information?” I asked. “Report them to the authorities? If the company closes down you’ll be out of a job anyway. So why not just quit if you think there’s something criminal going on?”
“Shawn is pressuring me to bring new investors into our funds, particularly the REIT. So there’s a chance I could get arrested, too, if there’s illegal activity. But like I said, I can’t afford to walk away right now.”
He took a deep breath. “I keep hoping that maybe I’m wrong. Maybe that shopping center is generating income—it could be that the leases have to be paid even if the store closes. Or maybe it’s an outlier, and I’m getting upset over nothing. It took a long time to get this job, and if I quit, I’ll fall behind on alimony and child support, and everything I’ve worked for will go down the drain.”
He took a deep breath. “The atmosphere at Beauceron is very competitive – everybody seems to be chasing after the same investors, and nobody is willing to talk about the actual quality of the product. You’re the only guy I know who has the ability to get in there and see if there’s something wrong. Please?”
I’d been in trouble in the past, and I appreciated everyone who’d given me a helping hand. It was my turn to pay forward those old favors. “It looks fishy, I agree. Once this seminar is over I’ll have some time and if you send me the data, I can look it over for you.”
By then we had circled back to the entrance to the dorm. A few lights were on in the newly renovated bedrooms but it looked like most of our guests had already gone to sleep.
“That would be awesome,” Doug said. “I’ll even give you my ID and password so you can see everything I do.”
I shook my head. “You shouldn’t do that, Doug. I mean, yeah, we knew each other years ago, but you don’t know that you can trust me.”
I opened the door to my room and let Rochester off his leash. Then I turned to Doug.
“I really appreciate this, Steve. I’ll email you my password as soon as I get back to my room.”
“No! You don’t want an email trail showing you gave somebody else your password.” I stepped inside and got a pad and pen from the desk. “Write it down.”
While he wrote, I thought about how my curiosity had gotten me into trouble in the past, snooping around in places on line where I wasn’t supposed to be. If I helped Doug I’d make sure to keep my snooping within legal limits so I didn’t hurt myself, and everything I’d built since my return home.
6 – Protected Information
Doug and I met up again at the after-dinner bar on Saturday evening. I’d been so busy during the day I hadn’t had much chance to sit in on his sessions or talk to the students. “How do you think it went?” I asked.
“There was a big variance in the level of knowledge. Sometimes I had to go slowly to explain things to people with no background, and I could see some of the knowledgeable people getting restless. But overall, I think people got what they paid for.”
He drained the last of his brandy. “You think we could look at the Beauceron files together?”
I had been on the run all day and I was tired but I could see how worried Doug was. “Sure. Come down to my room when you’re ready.”
A few minutes later Doug arrived at my room, carrying his laptop. “I want to show you where you can get the information about the REIT,” he said. “Our annual report lists all the properties, but it doesn’t break out the income individually. That’s all in spreadsheets on our server.”
While he opened his laptop and logged in, I yawned, but once he had access to all the company files I perked up. Something about seeing protected information always does that to me. “Why don’t you download a zip file with the information you want me to look at,” I suggested. “Then we don’t have to stay logged on to the Beauceron server for too long, which could raise someone’s suspicions.”
He looked at me wide-eyed. “You think someone is monitoring our access to the company server?”
“I’m sure there are data logs being kept,” I said. “Whether some
one is analyzing them or not is hard to say.”
I showed him how to create the zip file, and once it had downloaded we shut off the connection to Beauceron and he transferred the file to my laptop with a flash drive.
As I ran the extraction program, Doug sat beside me, stroking Rochester’s head. When a list of folders was displayed on my screen, he leaned forward. “Each of these folders represents a single property,” he said, pointing at the screen. “Inside each one is all the information we have on the property we’ve provided a mortgage for, identified by ID number. This is where we keep records of property appraisals, copies of the mortgage loans and deeds, real estate taxes and so on. We have our own in-house system of ranking the quality of the loans, something Shawn put together. What is the risk involved in the property? What are the income projections, outside factors, and so on.”
He clicked open the folder for the shopping center near the Newark airport. “One of the conditions for the mortgage is that the borrower keep us up to date on tenants, leases and rental income. Here’s a spreadsheet that tracks all that. He pointed at the screen. “See this store? Jose’s Dominican Market? It was closed when I drove past. There’s no way the owner is still paying rent. I’ll bet that’s the case with almost all the other tenants.”
“And if they aren’t paying rent, and the LLC that owns the property is bankrupt, then these income figures can’t be true,” I said, pointing at the revenue that was supposed to be coming in.
“Exactly.”
I sat back in my chair. “This property is clearly in trouble, and the spreadsheets aren’t telling the true story,” I said. “You think there are other properties with similar problems?”
“I do. These are high-risk mortgages, remember. That’s how come Beauceron can charge them such a high interest rate. I’m afraid that there are a lot more properties in our portfolio in similar trouble. And that means that there’s no way we can legitimately be paying out such high returns to our investors.”
Another Three Dogs in a Row Page 3