Shadow Account

by Stephen Frey

  That was a ridiculous question. “How would I know anything about him? You guys at Justice are the ones all over that.” He snorted, mad as hell that they’d dragged him all the way out here. “Listen, I—” Cheetah interrupted himself. Suddenly it all made sense. Franklin Bennett was covering his tracks. Destroying all evidence of the operation as the pieces became unnecessary.

  Cheetah turned to run, but the heavy rope slipped over his head from behind before he could take a step. It snared tight around his throat, and the garrote rod spun quickly. Suddenly he couldn’t breathe and his eyes felt as if they were going to explode from his skull. He clawed at the rope, gazing at his contact, who was staring back, expressionless. He reached out with both hands, as though that pitiful gesture might have an effect.

  Then his knees touched the ground, and he gasped for one more precious breath. But it didn’t come, and everything faded to black.

  Lucas checked up and down the darkened street, then knocked on Glen Frolling’s front door for the third time. It was almost eleven thirty and the report he’d gotten from Bennett claimed that Frolling had gotten home around ten. Frolling’s wife was visiting a relative in California and they had no children. The house ought to be empty except for Frolling.

  Bennett was in contact with Lucas constantly now. Supplying him with many things, including the report and the two “associates” accompanying him tonight. One of whom had gone around the side of the house to make certain Frolling didn’t try to escape through a back door. Bennett was acting almost friendly now. It was odd, but Lucas wasn’t going to kid himself. Bennett’s new attitude was coming only as a result of his fear of what was in the marble notebook.

  Lucas hesitated, thinking about Brenda. How she’d promised to keep the notebook safe. To open the envelope taped to the inside of the back cover of the notebook only if she didn’t hear from him within the next forty-eight hours. How she’d slipped her arms around him and hugged him tightly as they stood beside the bench near the Washington Monument. Begging to know what was going on. Pleading with him to take care of himself, a worried look creasing her face. He glanced at a streetlight. It was strange how much older she’d looked this afternoon.

  Lucas pointed at the knob. “Go on.”

  The other man moved to the door, slid a pick into the lock, and popped it open. That quickly they were inside Frolling’s house.

  Lucas had permission to do whatever was necessary to get Frolling’s cooperation. Frolling had been secretary to the Global Components board of directors for over a decade. If there was anyone who knew whether there had been a quid pro quo when Alan Bryson and the AB Trust had received the option grants, it was Frolling.

  “Get the other guy in here,” Lucas ordered, turning on a hall light. They had to be in and out fast so the neighbors didn’t suspect anything. “Then check upstairs.”

  “Yes, sir.”

  Lucas’s expression turned steely as he watched the other man obey his order. He liked giving orders. And being calledsir .

  There was light coming from beneath a door in the kitchen, and he pulled it open. Behind it were steps leading down. “Hey,” he called over his shoulder softly.

  Instantly, the man was back. “Yes, sir?”

  “Forget the other guy,” Lucas said. “Come with me.”

  The other man pulled a pistol from his shoulder holster and followed Lucas down the stairs.

  As they reached the basement, Lucas smelled smoke—then saw Frolling. He was hanging from the ceiling by his neck, his stocking feet dangling a foot off the floor. Behind him was an overturned chair and his shoes.

  The other man slipped past Lucas to Frolling, touching the man’s wrist. “He’s dead.”

  Lucas gazed at Frolling, who was still swinging slightly from side to side. It occurred to him that he’d never actually seen a dead body, and he stared at the noose around the neck, then up to the open eyes, thinking about the time a few years ago he’d considered this option. “What are you doing?” he asked. The other man had picked up the overturned chair and was about to climb onto it.

  “I was going to get him down.”

  “Leave him,” Lucas instructed, moving to a pile of smoldering papers he’d spotted in one corner of the room. “Call the police when we’re gone. Tell them you’re a neighbor and you heard something.” He knelt down and sifted through the pile, picking up a piece of paper that was only half-burned.

  “You find something?”

  Lucas nodded. “Yeah. Looks like our next stop will be the accounting firm of Baker Mahaffey. Specifically, Victor Hammond’s office.”

  “Mr. Reeves?”

  The baby-faced, red-haired young man in the plaid bathrobe squinted, then shielded his eyes against the brilliance of the porch light. “Yes?” His voice sounded like metal scraping against metal. “What time is it?” he asked angrily.

  “Mr.Phil Reeves?”

  “Yes, but—”

  “Honey, what’s going on?” A young woman appeared in the hallway behind Reeves. She was holding a baby. “Is everything all right?”

  “Everything is fine,” Reeves assured her. “Go back to bed.” He turned to the man standing on the stoop. “Who are you? What do you want?”

  “My name is Greg Adams. I’m with the office of the United States Attorney General.”

  Reeves looked off into the distance for a few moments, then turned his head slightly to the side. “Let me see your credentials.”

  “They’re in the car.”

  “What is this?” Reeves demanded angrily.

  Conner had driven to Reeves’s Virginia town house after landing at Dulles Airport thirty minutes ago and renting another car. Paul Stone could track Conner by his credit card activity, but he wasn’t planning on staying in one place long enough for Stone to catch up. But he’d be heading straight into the lion’s den itself if everything worked out. Then it would get tricky.

  “Okay, I’m not with the AG’s office,” Conner admitted. “But if you don’t cooperate with me, Mr. Reeves, I’ll call the AG’s office and tell them everything I know about what’s going on at Global Components. I’ll tell them about Minneapolis, and how people at Baker Mahaffey are in on it. People like you.”

  Rusty stared back at Conner silently.

  Conner glanced down. The other man’s hands were shaking badly. “Listen to me,Rusty. You and I are going downtown to your office right now, and you’re going to turn over everything to me. All the documents that prove fraud at Global Components. I know you have them. For some reason you accounting guys have this need to documenteverything . Even if it’s bad stuff.” He remembered Jackie telling him that. “Like I said, if you don’t cooperate with me, I’ll call the authorities and you’ll have less than thirty minutes left with your wife and that beautiful little baby.”

  “Sounds like that’s all I’ll have, anyway,” Rusty mumbled. “If I turn over everything to you, there will be people pounding on my door a few minutes later.”

  “I’ll give you a twenty-four-hour head start.” Conner saw indecision on Rusty’s face. “Listen to me,” he said quickly, “this is your best shot. I’m a better risk than the people who will come next. And I promise you, they will come.”

  Rusty gazed at Conner for several moments. Finally he nodded. “Okay.”

  Conner followed Rusty inside the two-story town house, not letting the man out of his sight the entire time. Worried the young accountant would call Vic Hammond, or that his wife would call the cops. But Rusty had convinced his wife that Conner was an old fraternity brother who was in trouble and needed help. She’d patted Conner on the shoulder and asked if there was anything she could do.

  Fifteen minutes later, Conner and Rusty were headed east on Interstate 66 toward downtown Washington. Conner sat in the passenger seat while Rusty drove.

  “What’s the deal in Minneapolis?” Conner asked.

  Rusty glanced over. “You mean you don’t know?”

  “I know there’s fraud going
on out there. I know that if an SEC SWAT team went in,they’d find it.”

  “Yeah, they would,” Rusty agreed. “How do you know something’s wrong out there?”

  “Can’t say.”

  “If you aren’t with the AG’s office, who are you with?”

  “It doesn’t matter. What matters is that I’m giving you a chance. You should appreciate that.”

  “I guess I do. Although twenty-four hours isn’t much to work with.”

  “Too bad. It’s all you’re getting.”

  The Washington Monument appeared in front of them across the Potomac River. It was brightly lit, a stark white tower set against the black night.

  “I assume your name isn’t really Greg Adams.”

  “No, it isn’t,” Conner confirmed. “Now, give me specifics on Minneapolis.”

  Rusty tapped the steering wheel. “A while back Global Components set up this tiny little company out there. Two offices and a receptionist desk. Just three people, and they don’t really do anything all day. It’s called Fargo Lease Management, and ultimately it’s owned by Global Components. But there are twenty-six other subsidiaries stacked between Global and Fargo. All incorporated in different countries around the world. All with names that don’t have the wordsglobal orcomponents in them. Even in the local language. In other words, if you weren’t Jim Hatcher, Global Component’s CFO, or Phil Reeves, accountant at Baker Mahaffey, or a couple of bankers in New York who are on the take, you’d never figure out who owns Fargo.”

  “Don’t forget Vic Hammond.”

  “How do you—?”

  “Don’t worry about it,” Conner interrupted as they pulled to a stop at a red light where I-66 met Constitution Avenue. “Come on. Tell me about Fargo.”

  “A few years ago Global hit a bad streak. Foreign competition got nasty, and, at the same time, senior management let internal manufacturing costs get out of control. Global had to take on a lot of debt just as earnings tanked. So the stock market pounded the company’s shares. The price dropped from the upper fifties to the low thirties in less than a month.”

  Conner nodded. He’d read about the stock’s nosedive while researching the company.

  “It was a bloodbath,” Rusty continued. “The senior guys at Global had their nuts in a vise. Shareholders were making a big stink about the terrible financial results,and about a bunch of big-dollar loans the executives had made to themselves using corporate funds. A couple of important institutional investors threatened to take drastic action unless something happened fast.”

  “Like the stock price going back up.”

  “Exactly. If that didn’t happen, the senior executives were going to have their asses handed to them. And there were gonna be lawsuits. So they came up with a plan.”

  “With the help of their accountants, I assume,” Conner said as the light turned green.

  “Yeah,” Rusty agreed, his voice dropping. “With Baker Mahaffey’s help.”

  It was exactly as Jackie had described. The accountants had been in on the fraud right from the start.

  “In fact,” Rusty continued, “that’s how we won the business away from the firm that was auditing Global Components at the time. I think it was Deloitte and Touche.”

  “What do you mean?” Conner asked, aware that Rusty seemed strangely relieved to be spilling his guts. Like talking about this was cathartic.“You mean you proposed fraud to get the business?”

  Rusty looked over as they passed the White House. “Vic Hammond proposed it. Not me.”

  As if that made Rusty any less guilty, Conner thought to himself.

  “Vic had just lost a couple of big clients,” Rusty explained, “and he was desperate for a win. The managing partners in New York were coming down on him hard. I had just joined the firm.” He paused. “I work for Vic, but somehow I get the feeling you know that.”

  “Yes, I do,” Conner said. “So give me the specifics.What goes on at Fargo Lease Management? Why is it so important?”

  Rusty turned left onto Seventeenth Street. Baker Mahaffey’s offices were only a few blocks away.

  “So Global ended up selling a huge chunk of its capital assets, you know, its plants and equipment, to this tiny little company out in Minnesota. Then leased it all back at a nothing rate. They took the cash from the sale and paid off a bunch of debt. That transaction had the effect of cutting Global’s capital expenses by almost two billion dollars a year, thereby increasing earnings by the same amount. The minimal amount Global pays Fargo to lease the capital assets back barely even shows up on the income statement. It’s just enough to cover the interest on the loans a couple of banks made to Fargo, quietly guaranteed by Global, of course,” Rusty added. “Anyway, earnings per share shot back up and the stock market was ecstatic. The share price shot up as well. Over the next two years senior management got manufacturing costs back in line and developed several new products. Suddenly everything was beautiful again. But the executives liked that two billion dollars a year of cost cuts, so we had to keep giving it to them.”

  “Wait a minute.” Conner shook his head. “A couple of banks loaned Fargo all that money to buy Global’s assets?”

  “Yup,” Rusty answered, pulling into an all-night parking garage just down the block from Baker Mahaffey. “Like I said, with Global’s guarantee.”

  “But what about year-end consolidation? Intercompany transactions are always netted out on the financial statements. That parent guarantee would reverse everything you structured for them, wouldn’t it?”

  “First of all, there are twenty-six subsidiaries between Global and Fargo. No one’s going to figure out that there’s any ownership relationship between the two entities. No one but us, because we structured it. And we’re not going to tell anybody. And the banks didn’t tell anybody about the guarantee.” Rusty snagged a ticket from the electronic dispenser and headed down into the garage. “Remember, almost anything is possible if your accountants comply,” he said, swinging into a parking spot. “You know?”

  “You’re the accountant. I’ll take your word for it.”

  Rusty turned off the car. “Fargo is Global’s shadow account.”

  Conner had been about to reach for the door handle, but he turned in his seat to listen.

  “Fargo operates in the dark,” Rusty continued. “That can happen because only a few people know about it. It has to be that way,” he murmured. “That’s the rule.” He shook his head. “The other rule is that, ultimately, the light moves and so does the shadow. If you don’t move with it, you get caught.”

  “Well, the light moved, Rusty,” Conner said, pointing at Rusty’s hand. “Give me that parking ticket.”

  Rusty forced a wry smile. “You don’t miss much, do you?”

  Conner kept Rusty ahead of him as they walked out of the garage and into the lobby of the Baker Mahaffey building. He was looking around constantly, watching for anything suspicious, even as they stepped into the elevator Rusty activated with a magnetic card. Conner hadn’t been more than five feet from Rusty since knocking on the guy’s door thirty minutes ago, but Rusty might have still somehow gotten a message to somebody.

  “This way,” Rusty called over his shoulder as he stepped out of the elevator onto the fourteenth floor. “I’m going to make this easy for you.”

  Conner followed Rusty through the floor’s familiar lobby. He’d waited out here for Vic Hammond a few days ago. At eleven in the morning, it had been a beehive of activity. Now, after midnight, it was eerily silent.

  Rusty headed down a long corridor, then turned into a small office, pulled a set of keys from his pocket and inserted one into the lock of a file cabinet behind his desk. He hesitated and looked back at Conner, who had stayed near the door. “If I give you this, are you really going to let me have a twenty-four-hour head start?”

  Conner nodded. “Yes.”

  “I want to see my baby grow up,” Rusty said, his voice cracking.

  It had suddenly become real for him
, Conner realized. The consequences of his actions were setting in. But he should have thought of those consequences before agreeing to help Vic Hammond. “I understand.”

  “I have relatives in another country. I might actually be able to make this work.”

  “I told you,” Conner said firmly. “Twenty-four hours. I can’t promise you any more than that. Now,give me what you have. ”

  The file cabinet lock clicked open, and Rusty removed a large three-ring binder. For the next ten minutes he went through the file that detailed the fraud at Fargo Management and Global Components. There were original communications back and forth between Vic Hammond and Jim Hatcher, and handwritten notes from Hammond to Rusty. Even memos from several bankers who’d agreed to fund Fargo and keep it quiet—in return for millions of dollars of fees.

  “Is this the only file?” Conner asked.

  “Yes.” Rusty had moved to the office window and was staring out into the night.

  Probably wishing he could rewind the tape a few years, Conner thought to himself. “Why did you do this?” Rusty seemed like a capable enough guy. Not someone who needed to cheat to get ahead. Now he was going to be looking over his shoulder until the FBI inevitably tracked him down, even if he did make it to that foreign country.

  Rusty was silent for a few moments. “My wife was about to give birth to our first child. I had fifty thousand dollars of school loans and nothing in the bank. And my mom was sick. She didn’t have health insurance. Vic Hammond gave me a hundred thousand bucks out of his own pocket, and suddenly I was okay. Except that I was in his debt,” Rusty said softly. “I made a deal, and I had to live with it.” He took a deep breath. “Down deep I suppose I knew this day would come.”

  “Why did you put this book together?” Conner asked.

  “There’s a lot of evidence in thereproving that I was coerced,” Rusty said, bitterness in his voice for the first time. “I wanted to make certain if things ever got nasty that it was all in one place. I thought it might give me a better chance to negotiate.”

  Conner gazed at Rusty for a few moments, then glanced back down at the notebook. “What is this?” he asked. There was a section at the back of the binder set off from the rest of the pages by a bright red divider.