Mendoccini

by Laurence Todd

  Bryant lived in a four-roomed flat at the front of the house with a bathroom toilet and a kitchenette next to the front room, which doubled as his office. There was a small bedroom adjacent to the bathroom. From the front-room window I could see the street through spotlessly clean windows. Glancing around, I formed the impression Bryant lived on his own. There were none of the feminine touches women utilise to make a place homely. The entire flat was neat, clean and very tidy, with none of the organised chaos a man living on his own usually generates; no clothes strewn over chairs, no layers of dust on every surface, no waste bins crammed with fast-food wrappers and beer cans, no smell of laundry waiting to be done and no rancid aroma from an uncleansed toilet. Either Bryant had a cleaning lady coming in or he was meticulously houseproud.

  If I had to imagine what the workroom of a writer or investigative journalist looked like, I would imagine it as something like this: hundreds of books and files lined up on shelves and a desk covered with papers and magazines, next to a laptop. There was a three-drawer filing cabinet next to the desk and I didn’t doubt it was also crammed full of papers and files from his previous investigations.

  When I’d been trained for searches of premises, I’d been told to put myself in the position of the person whose premises or things I was searching. If I were them, where would I hide what I wanted not to be found? I was looking for anything either pointing me towards whom Bryant had met with from Karris and Millers or connected to his investigation. It was probably something on paper.

  I began by looking amongst the papers on the desk. From their disorganised appearance I again wondered whether someone had already been in and searched around before me, as the disorganisation on the desk was at odds with the rest of the flat.

  Most of what was here were photocopies of newspaper and magazine articles relating to financial crime, and there were several copies of financial accounts. I spent twenty minutes carefully looking through the papers on his desk but nothing stood out. There was the usual writer’s junk in the desk drawers: staples, envelopes and pens. I looked through the small filing cabinet. In an age when so much can be stored electronically, obviating the need to handle so much paper, Bryant was a throwback as the cabinet was stuffed with annual reports, accounts and back copies of financial magazines, many of them dog-eared from continual usage.

  There was a small cabinet by his bed, jammed full of miscellaneous papers. Again, many of them were photocopied newspaper articles about investigations in money laundering and downloaded materials relating to money laundering, and there was lots of highlighting of key paragraphs and words. I looked under the bed and found nothing, but under the bedside cabinet there was a magazine about coin collecting. I picked it up and put it on top of the cabinet. As I did I noticed a corner of something sticking out. I pulled it out. It was a four-month-old copy of New Focus. I glanced at it and noticed the heading on the front page proclaimed the lead article was about banks and money laundering. This was the edition Helen Cranston said had published the article the Observer wouldn’t run.

  I sat on the bed and glanced through the magazine. Inside were a few photocopied sheets of invoices and receipts. The article itself was three pages long and written in dense prose.

  I noticed the name Karris and Millers printed on the top of a page in the centre of the magazine, and it was this that caught my eye. The name was atop a set of accounts. The accounts covered two sides of A4 paper and had been very carefully stapled inside the centre of the magazine, following on from the main article. Anyone casually flicking through would assume they were part of the main body of the magazine. From the location, I assumed Bryant had been trying to hide these, but from whom?

  There was a set of initials with what looked like a department name next to it at the top left of the first page of accounts, and a scrawled indecipherable signature at the bottom of the page. Bryant or someone else had gone over some of the figures with a yellow highlighter pen.

  I put the magazine to one side. I looked through the drawers and cupboards. I made a perfunctory search of the kitchen and bathroom, looking in drawers and the fridge, but, other than kitchen utensils, shower gel and deodorants, found nothing useful. Other than the magazine, which I was taking, as I thought Bryant wouldn’t object, I’d found little for having been in the flat over an hour. I slid the magazine into my jacket pocket and exited the flat.

  The dreadlocked guy I’d passed on the way in came out the front room door as I descended the stairs. He stood, arms folded, looking like he’d been grievously wronged.

  “Find anything?” he asked in an unfriendly tone.

  I ignored him. “Anyone else been up there in the past week or so?”

  “Yeah. Some suit came round a week back, said he was from where Bryant worked and he’d come to collect something. He had some big guy with him who looked like he’d turn nasty if I refused, so I let them go upstairs.”

  “Did he say what he was looking for?”

  “No.” He shook his head disdainfully.

  “He take anything?”

  “Dunno.” A shrug of the shoulders. He was avoiding my eyes.

  “Thanks for inviting me in.” I grinned at him. He snorted his disapproval. I left.

  Back in the car, I flicked through the accounts attached to the article in New Focus. There was a balance sheet and an income statement. Lists of figures, including some very big numbers, nine- and ten-figure ones, plus an additional page of notes which purported to explain certain figures and results. The invoices and receipts didn’t tell me anything either.

  But I didn’t really understand too much. To my untrained eye they just looked like a jumble of figures but, from all the highlighting, they obviously meant something to someone.

  I drove back to the office.

  I looked up Michael Mendoccini on Special Branch’s files, checking his movements into and out of the country. Going back several years it was noted he made several journeys between the UK and Italy every year. As an EU national he, of course, had freedom of movement without the need for visas, so mobility was simple. In any one year he seemed to make a visit to the UK every other month, usually for a week at a time.

  I checked the time period he remained in the UK on his visits and cross-referenced these against the last few times Red Heaven had been linked to causing explosions, and he’d been in the country on two occasions, including the bombing at Golders Green earlier in the year. Paolo Poletti had also been in the country at the same time. I knew Poletti had met and spoken to Richard Clements, and Clements had identified Mendoccini as the man who’d spoken briefly to Poletti at the same place.

  Mendoccini had no police record in the UK. He’d never been arrested, though he’d been questioned upon arriving in the UK on a couple of occasions. He’d been kept under observation when he visited the country, but usually he spent his time at the shop his father ran, arranging for deliveries of the produce the shop sold, including supplying Delucca’s restaurant. His last visit to the country had been at the start of the week before last, which was when I had met him in the Chinese restaurant. It was noted he’d left the UK the next day, bound for Milan.

  It occurred to me this meant Mendoccini had been in the country when Josh Bryant had been killed. Was this pure coincidence? Bryant had been investigating something for Nigel Hemsley when he’d been eliminated and, according to Prevental’s files, Mendoccini and Hemsley were supposed to be acquaintances. Hemsley himself was about as palatable as a large mouthful of vinegar, but the notion of him being somehow connected to terrorism was hard to believe. I was confused.

  I was sitting in a small café in Maddox Street, off nearby Regent Street, waiting for a friend to show up, and he was ten minutes late. I’d decided I needed someone who knew about financial matters. More importantly, I wanted someone I could trust to be objective.

  Paul Dorrius-Lyle was an accountant working for one of the fashion houses on Regent Street. He was someone I’d known at King’s through playing
rugby and we kept in touch occasionally. He wasn’t an informant; nothing like that. But he was someone with extensive knowledge of financial matters and he read financial statements as easily as I read the football section of the newspaper. The arcane language of the accountant was second nature to him.

  He burst in, looking agitated and flustered because he was late. He flopped down at my table. Compared to Clements, Dorrius-Lyle was a clothes horse straight out of the pages of GQ magazine. He was wearing a smart jacket and a pale blue and white pinstriped shirt, with dark trousers, and the cost of what he was wearing probably exceeded my monthly salary. He would look like an archetypal accountant were it not for the cauliflower left ear and pockmarked nose, broken a few times from encounters in a scrum.

  I’d contacted him after realising I needed outside help. I wanted someone with no connection to this case and who knew none of the individuals, so I’d phoned him at work, told him what I wanted and he’d readily agreed to help out. I’d sent him a copy of the article as an attachment to an email and he’d said he would read it before we met up.

  After some small talk about rugby and England’s latest drubbing by the All Blacks, I asked him about the accounts.

  “What exactly do you want to know?” he asked.

  “I wanna know what these accounts mean. There’s lots of highlighting and I suppose I want to know what the accounts are saying. What do these figures mean?”

  He took the email out of his pocket and flattened it on the table.

  “Okay.” He sipped some of his latte. “Simply stated, these accounts are a record of how this firm performed in the last financial year. According to these, they’re doing well. There’s two sets of records here. One’s a balance sheet, the other’s an income statement. The important one’s the income statement because it shows how much money they made from trading activities. I’m guessing these accounts are a bank’s, a merchant bank perhaps?” He gave me a knowing look.

  I’d blacked out the name Karris and Millers before emailing them to him. “Yeah, they are. How’d you know that?”

  “I’m a bloody accountant, mate, that’s how I know. These detail the kinds of things merchant banks derive their revenue from: advising on takeovers, placing shares. Ordinary firms don’t deal in financial products like these” – he pointed to a set of figures – “and these figures are far too small for a building society.”

  I nodded. I took his word for that. “How exactly does a merchant bank differ from a commercial bank like Lloyds?” I hoped I wasn’t showing too much ignorance.

  “They don’t hold individual saver accounts, for one thing. They service a mainly corporate clientele, helping raise funds for corporate acquisitions, preparing rights issues, advising them on the intricacies involved in mergers or takeovers, stuff like that. Any merchant banker who can walk and pick his nose at the same time easily makes a mid-six-figure salary. It’s a very highly specialised function.”

  Small wonder the Hemsleys could afford a flat by the Barbican.

  “What’s a ‘rights issue’?” This was a new language to me.

  “It’s when a firm wants to raise extra equity capital through selling new shares. They offer existing shareholders the chance to buy extra shares at a discounted price before they’re placed on the equities market. That’s what Spurs did when they were looking to raise funds to redevelop the Lane in the eighties.” He was also a fan. “Shareholders in the club were offered the chance to buy into the club at a sizeable discount, and the club raised a considerable sum without having to go to the banks and raise funds. Banks look favourably on this because it shows a business is attempting to keep its borrowings down and not incur too many costs through paying interest on loans, which helps with their gearing ratio.”

  I didn’t ask what that was. Maybe I should have gone to the Economics classes after all.

  “Is there anything about these accounts suggesting or implying they’re not completely, what’s the accounting term, kosher?” I enquired.

  “Hard to say. Putting accounts together is a complicated business, or it can be depending what’s going in or being left out, so I can’t really offer an opinion.”

  “Let me explain why I’m asking.”

  I told him about the claim of money laundering being made by an employee of a merchant bank and how sums of money, it was believed, were being funnelled towards a terrorist organisation, but I mentioned no names. “Part of the reason my source believes money’s being laundered is the bank concerned seems to be doing lots of business with firms not associated with anything a merchant bank would usually do. This bank has dealings with a firm in Italy which Italian security believes has connections to a terrorist organisation. I’ve been told the money initially paid into the bank comes from the terrorist group and the belief is this money’s being washed clean.”

  He nodded. He was absorbing what I’d said.

  “Also,” I said, “one firm involved in this is a shell company, bought by another firm in the same market, and that firm is owned by this same firm in Italy, which has its fingers in lots of different things. I’m wondering why a merchant bank would be dealing with such firms. Wouldn’t they deal with commercial banks?”

  He took a long sip from his very frothy latte. “That’s right, usually they would. In my experience, the only reason why this happens is because someone wants to make it hard to follow the money. The more stops involved in a money trail, the more difficult it becomes to track the source of it or its destination, especially if it goes through countries where bank secrecy is guaranteed, like Switzerland or the Caymans. Sounds dodgy to me, mate.”

  I told him I was going to think out loud and this was to be completely off the record. He wasn’t to tell a soul what I was going to mention. He nodded his assent.

  “You’re looking at these as an outsider,” I said. “In your view, as an accountant, could they suggest the possibility of money laundering?”

  “Can’t give you a definitive answer. I’d need to know more before I could say. But it’s worth remembering accounting’s not an exact science. There’s so many ways money can be lost or redistributed in sets of accounts to make them look better or to hide the true purpose behind something. We accountants even have a name for it: window dressing. Make the accounts look far more attractive to whoever’s looking at them.”

  “What would be a simple for instance?”

  He thought for a moment. “Simplest example? Depreciation. You know what that is?”

  “Something being worth less?”

  “Sort of. It’s the decline in value of a productive asset over time. You buy something for £1,000. You think it’ll last two years, so you write off £500 per year over two years. But if you think it’ll last four years, you only write off £250. Net profit’s now up £250, and it’s perfectly lawful. That’s just one item. Imagine the scope if you’ve invested millions in productive assets, like in a car factory with lots of hideously expensive machinery.”

  “Interesting. But, if I had dirty cash, what would I have to do to make it clean, for want of another term?”

  “You skimming drugs money?” He laughed. “Don’t they pay you enough?”

  “Yes and no in that order,” I said. “How could I organise dirty money in such a way that I could spend it legitimately?”

  He thought for a few moments. “Is that what these are about?” He grinned, jutting his chin towards the accounts in front of him.

  “I’m not sure. That’s why I’m asking. If a company’s a shell, but it’s bought by another firm that’s doing business with an institution suspected of skimming money . . .” I left the sentence unfinished.

  He finished his latte and wiped his mouth on a napkin. “There’s several ways it can be done, and there’s provisos for all of them, but probably the easiest way is to use what’s called a front company, something set up just for this purpose. An entity existing purely for money to go into and out of it to show the business is trading. From what you’v
e just told me, the shell company bought is the front company.”

  He looked straight at me, as if to ask if we were still on the same page. I nodded.

  “Money gets paid into the business. This is called placement. It then goes through the usual banking processes; they deposit it and lend it out and, in the instance you’ve just described, it goes through various other companies doing business elsewhere. After a little while, the money goes back into your account and it’s clean. All the business you’ve done is with legitimate firms and you can spend it without the authorities coming after you. Drugs cartels do this all the time. There are small businesses and banks in Florida existing purely to wash the billions of dollars paid in from drugs cartels. The authorities know this but they can’t prove it because all transactions are with legitimate businesses, even though the firms may only exist as a PO box somewhere in a tax haven like the Caymans.”

  “And this is foolproof?”

  “Nothing’s foolproof, mate. Even the biggest banks get caught out. A couple of years back, HSBC was fined nearly two billion dollars in the USA because of lax controls over the way it handled its Mexican affiliates in that country. You remember that? The court really went to town on the bank, said it was nothing more than a conduit for drug barons and rogue nations. There were people depositing millions of dollars in cash over the counter at any one time and this didn’t raise any flags with the bank. HSBC was probably the biggest bank in Europe at that time but it still got stung.”

  I remembered the case. It had made big news at the time. “HSBC acted stupidly,” Dorrius-Lyle said. “It should have been on top of this. Not every launderer gets that lucky but, with enough care taken and a little luck, you can hide and wash millions. The key is not being too greedy or ambitious when moving money. Drug cartels get away with placing enough money to finance the UK’s current deficit because they have corrupt officials working for the banks and the DEA on their payrolls.”