“Excellent question, Nathan,” St. James replied sympathetically. “Malachi told me he relied on Stevens to check the legitimacy of companies, and the people who ran them, before investments were ever made. Isn’t that right, Malachi?”
Jensen ignored the question.
“It seemed odd to me that a sophisticated investor such as yourself would pick companies you wished to own, give instructions to Stevens to make investments with your money, and then hold him responsible for your decisions. If your lawsuit ever went to court, I believe you’d have difficulty gaining sympathy from a judge for that very reason.”
Smythe struggled to keep up, trying to type as fast as St. James was unfolding the story.
Jensen’s face became redder.
“Maybe it was a mistake to come here in good faith without my attorney,” he said, shifting in his chair.
St. James shrugged.
“So, where’s the money?” Mary asked with a look of annoyance.
“The trail will lead us there shortly, Mary.”
Jensen scowled, his forehead furrowed. Anna and Smythe looked at one another and shrugged. Nathan Strong remained stone-faced. Slate was expressionless. Jason, who by now had moved from the window to sit next to St. James, was the only one in the room with a smile of anticipation.
“This brings us back to the code itself,” St. James said as he handed photocopies of it around the table.
“I call your attention to the first two sections, being (g,cnbtkyk1,j) and (ABA#021000089-36148883-012-67141-co-na-csprite1). The first section, (g,cnbtkyk1,j), contains the country and bank code. The first set of characters in the second section is a transaction ID (ABA#021000089) for money transferred from Citibank in the United States to Cayman National. Next is the bank’s international clearing account number (36148883) that accepts all money transfers from Citibank. Transactions coming into the clearing account would also have the recipient’s full name and personal account number attached. The transfer is cleared to the bank account number (012-67141) you see there.”
Smythe interrupted. “We never did solve section eight of the code.”
“Louis, I think you’ll find that section represented the date they intended to meet up, a date to divvy up the spoils, so to speak. (A21+11) is most likely April 21 of next year plus eleven days, which would make it May 2.”
“I’ll feed it into the program,” said Smythe, anxiously typing away.
St. James continued.
“The Cayman bank did a word search in its system for csprite1, the last word in section two of the code. It’s the password for the account number appearing just before it on the paper before you.
“We couldn’t get the signatory’s name through normal channels because of Cayman privacy laws. However, when we involved courts and ambassadors in both the United States and Cayman we were able to formally obtain the information.”
“Well, whose account is it?” Nathan blurted.
“In a moment, Nathan,” St. James replied.
Nathan shot St. James an impatient look.
“I went to Cayman and met with the lawyers I had engaged to search the island’s registries for each member of Gyberson’s gang and anyone else associated with this case. Then I met with the Cayman National Bank to trace transactions I suspected were there as well as the ones lawyers had found in registries. Of particular interest was the account number found in the code.”
“Well, whose account was it?” Nathan asked again in a more impatient tone.
St. James waited a long moment.
“Malachi Jensen’s.”
Chapter 71
Jensen remained expressionless.
Nathan was somewhere between incredulous and outraged. “Jensen’s?” he shouted.
Anna gasped. Smythe looked stunned. Slate showed absolutely no surprise. Mary just smiled. Whispers erupted around the table.
Nathan turned to Jensen. “You stole the money from yourself?”
Jensen didn’t answer. Or move. Or show any kind of body language.
“Not quite, Nathan,” St. James said cautiously. “Remember, a transfer involves two accounts.”
“He transferred $23 million from his US account?” Nathan said.
“No, he didn’t,” St. James replied with conviction.
Jensen stood.
“I’ve heard enough for one day. You’ll hear from my attorneys.”
With that, Jensen left the boardroom, only to be stopped by two of Jason’s uniforms posted outside, placed there after everyone had gathered inside earlier that morning. The taller of the two turned Jensen back into the boardroom.
Jason stood and gestured to the chair Jensen had just left.
“Malachi, you do not have to respond to anything you hear today without an attorney present. But it is important that you hear it,” Jason advised.
“Am I under arrest?”
“No, you are not under arrest,” Jason confirmed.
Jensen reluctantly sat down.
“Please continue, Hamilton,” Jason said waving a hand.
St. James nodded.
“With support from both the US and Cayman ambassadors and the Cayman government, and with cooperation from the Cayman National Bank, we confirmed that $23 million was transferred from a Cayman bank account belonging to Gyberson to the account belonging to Malachi Jensen.”
“My God!” Nathan blurted out. “Conspiracy? Gyberson steals money then gives it back?”
“Not quite,” St. James interjected. “When Gyberson was arrested in Fargo we arranged for Dozer to question him. Gyberson didn’t provide much, but what he did say had me looking at the case quite differently.”
“What was that?” Mary asked.
“He told Dozer things were ‘not as they appeared.’ That got me thinking about what things in the case were not as they appeared. Perhaps others were involved, or different transactions took place that we knew nothing about. One possibility was that Gyberson and Jensen had more of a relationship than just investor–investee. When Anna searched, she discovered that the two were university roommates at Florida State. The two of you go back many years,” he said to Jensen. “So the fact that Gyberson turned to you for money when Macadamia and Carstairs were in financial difficulty was no coincidence.”
Jensen’s began to grit his teeth.
“When you began planning this scheme you realized you couldn’t make it look legitimate without Stevens’s help. You’d already given him power of attorney and signing authority. To exclude him now in a scheme to transfer money would be a dead giveaway. Stevens was no fool. You’d run the risk of him finding something in the company records, maybe blowing the whistle on you.
“The more you thought about it, the better it looked to have a well-respected CPA as a front man, someone to lend credibility. So you had to include him. You had to make some kind of deal with Stevens. But part of your scheme was to sue Stevens’s firm later for $23 million. So how does one have his accountant participate in a scheme where he gets sued by his partners? Why would Stevens agree to that? I don’t think he would have if he’d known about it. He was left out of that part, wasn’t he, Malachi? It was just between you and Gyberson, a private scheme.”
Jensen said nothing.
“The only way for you to be in a position to sue the firm was to maintain distance from Stevens, treat him like the arm’s-length professional he was supposed to be in the first place.
“To maintain arm’s length you couldn’t be seen making a deal with him. It would compromise your ability to sue later. Gyberson would have to make the deal for you. So Stevens would facilitate funneling your $23 million through to Macadamia for Gyberson to siphon, just as the two of you had planned.
“I discovered Stevens knew nothing about your plan to sue when I was reviewing your files. Stevens wasn’t copied on all correspondence between you and Gyberson, just the ones related to organizing cash injections into Macadamia. I thought that was strange for a three-way partnership. Somet
hing else had to be at play.
“I believe Stevens would have been reluctant at first when Gyberson broached the subject of participating in a scheme. Fundamentally a good man; but in a very unhappy marriage. He was miserable. You knew this and so did Gyberson. Gyberson saw the stressful relationship between Beth and Tom firsthand when he had dinner at their house. Beth remembered a dinner guest, a man who frightened her. She said he had a certain look, like he’d do anything to get what he wanted. She couldn’t remember his name other than that it started with ‘S.’ As the case unfolded, it became clear to me that Gyberson fit her description perfectly.
“The troubled marriage gave Gyberson an opportunity to offer Stevens an escape from an unhappy life. A man with nothing left but work, no pleasure whatsoever, begins to fantasize about something better. But all his assets were in his wife’s name. He couldn’t have a better life, even without her. He had no means of his own to do so. All Gyberson had to do was offer to finance a new life for him.
“Here’s where it gets interesting,” St. James said, smiling.
“After thinking about Gyberson’s offer, Stevens decided escaping was the way to go. But he’d need capital to generate income, to sustain himself. My guess is about $5 million, maybe more; invested at 6%, that would generate about $300,000 a year. Not what Stevens was used to, but he’d have only himself to support, and a shot at happiness. Am I right, Malachi?”
Jensen was rigid, stone-faced, still working hard to control himself.
“I’ll take that as a yes,” St. James said with a grin.
“I don’t understand any of this,” said Smythe. “The money in Cayman was transferred from one of the guys here, wasn’t it?”
St. James continued without answering.
“Malachi, when Higgins Johnson searched your name and those of your holding companies in Cayman registries, they found a luxurious five-bedroom, four-bath, 4000-square-foot house on Orchid Drive, not far from the Cayman Yacht Club. Purchased in your name last month for $3.5 million with a cheque drawn on account 012-67141 at the Cayman National Bank: the very same account as in the code Louis cracked. Funded from the $23 million transferred to your account from Gyberson’s. Gyberson’s money was in the same bank. It was convenient, perfect for both of you. He needed money in the United States to live, and you needed money in Cayman to live.
“All you had to do was switch amounts. Trade bank balance for bank balance, in equal amounts. Gyberson gets the $23 million you siphoned from Jensen Holdings, hidden with friends in the United States. You had to gather the $23 million back from friends in order to make the investment in Macadamia. Then all Gyberson had to do as the only signing officer at Macadamia was just take it. All part of the scheme between the two of you.
“You get his $23 million in Grand Cayman to escape the insolvent Jensen Holdings in the United States. No money crosses borders. No record for US authorities to trace. Very clever. This was confirmed by an email from Gyberson in Malachi’s files saying, ‘Good to go. Can switch anytime,’ referring to the money switch itself.
“I might have missed it if Stevens hadn’t left the code on his computer. Thanks to Louis and Anna we were able to unwind your scheme, Malachi.”
Dozer sat up straight with a troubled look. “So let me get this straight, Hamilton. Malachi siphons $23 million from his own company, hides it here in the United States, screwing the mob to finance his retirement. Gyberson hides money in Cayman over the years that eventually grows to $23 million, avoiding US tax in the process.
“Malachi opens a bank account in the Cayman National Bank. Then Gyberson transfers $23 million from his Cayman National Bank account to Malachi’s. In exchange, Malachi transfers the $23 million he gathered back from friends in the United States to Gyberson’s company, Macadamia, for Gyberson to siphon in order to fund his retirement, screwing his company’s creditors in the process.”
“That’s right, Dozer,” St. James said with a smile. “Dollar for dollar, bank account for bank account, retirement for retirement.”
Anna’s face suddenly lit up. “That’s the house we looked at in Cayman, the reason you rented the car that morning.”
St. James smiled at Anna then turned back to Malachi. “We did take a look at your mansion. Very nice.”
Dozer remained confused. “But you said Jensen couldn’t transfer money to Cayman without paying tax. What about the transfer made with the transaction ID in the code, the one to his account?”
“The transfer referred to in the code was only $1,000, just enough for Jensen to open an account to facilitate the switch with Gyberson, not enough to attract attention from authorities,” St. James explained.
“If all they wanted was to exchange cash, why did Gyberson sign over Macadamia shares to Jensen?” Nathan asked.
“The shares were worthless. Neither party placed any real value on them. It was done to make it look like a share-purchase transaction, to throw off the IRS should they ever decide to look at it. Gyberson couldn’t run the risk of authorities finding his money in Cayman. So, he sold a worthless company for $23 million.”
“Bizarre,” Smythe said.
Anna shook her head.
Nathan interjected. “Tom was an honest man. What would Gyberson and Jensen have said to him to get him to participate in all this?”
“I believe Stevens thought Malachi and Stan were just switching accounts to fund retirements. He probably guessed Gyberson didn’t pay tax on the $23 million in Cayman. But Malachi didn’t move the money down there. That was Gyberson’s crime, not his client’s. He probably justified it that way, shrugged it off.
“But money had to be stolen for Malachi to claim a loss against Stevens’s firm. When Gyberson got Malachi’s $23 million, Malachi reported it stolen, just to manufacture a claim.
“When we discovered Stevens couldn’t possibly have stolen it, Malachi had to create another phony angle to substantiate a claim. Then the story became that Stevens was supposed to have thoroughly checked out Gyberson, known he was a crook. So Malachi trumped up a negligence accusation to replace the theft claim.”
Slate interjected. “I assume this is only part of the scheme. You still haven’t told us where Stevens’s $5 million came from.”
St. James turned to Bill. “As far as Stevens was concerned, his new life’s funding was coming from Malachi. No other source. As I said earlier, Stevens didn’t know about the ensuing insurance claim — that that’s where Malachi intended the funding to come from for Stevens’s escape. Malachi and Gyberson never intended to fund Stevens personally. They needed the money switch for their own new lives.
“The whole idea of the money switch was not just for Malachi and Gyberson to solve retirement problems: it was to create the lawsuit against Nathan’s firm for the purpose of extorting insurance monies from Global. Stevens was to be funded from the proceeds of the insurance claim; after funding him, the balance would be split between Jensen and Gyberson.”
Jensen continued his non-responsive state.
St. James paused to clear his throat.
“Stevens did the accounting for Jensen Holdings and would have known it was insolvent. So why would he think his escape money would come from Jensen?” Nathan challenged.
“Malachi would have lied to Stevens; told him he had the money in a separate bank account outside the company. After all, Stevens knew the $23 million to facilitate the switch with Gyberson came from outside the company. He had no reason to believe there wouldn’t be another $5 million to fund his escape,” St. James replied.
Nathan shrugged.
St. James drank water.
“What got you onto Macadamia and The Carstairs Group in the first place?” Nathan asked.
“There were four holding companies that received multiple funding tranches from Malachi in addition to Macadamia. Five in total. Transaction volume and dollar amounts triggered my initial interest. That interest subsequently grew into suspicion when I learned two facts. First, Jason discovered al
l five shareholders were on FBI watch lists. Second, background checks showed all five were related to each other in one way or another. Bill confirmed this from the FBI side too. Collectively, they were Gyberson’s gang. But Gyberson was the only one involved in this scheme. The others were silent partners. They may or may not have been promised a piece of insurance money. Who knows?” St. James shrugged. “For our purposes here, it doesn’t really matter.
“What moved Gyberson to the top of the suspect list was his hiring of Nells in The Carstairs Group. Except for Bill, none of you will have heard of Nells. He’s a swindler whom Bill and DuPont put in US prison a few years back, with a little help from me.”
Slate nodded.
“That made Gyberson’s character complete.
“Losers hang around with losers. Gyberson hired a number of ex-convicts when sentences were up. They needed money and were not in a position to demand top dollar. No one else would hire them. So, Gyberson got cheap labour and ex-cons got a paying job. It turned out Nells had no part in the Stevens affair. He just needed money. He was working to raise enough money to buy into his brother’s locksmith business.”
“My God. I can’t believe Thomas did this to us. I just can’t believe it,” Nathan said in a defeated tone, staring solemnly out the window.
“My guess, Nathan, is that he was a very desperate, lonely man who did his best to keep you out of it. It was one reason for the kidnapping scenario. The public would feel sorry for the firm’s loss of a key partner. Sounds better on the street than stealing from clients.”
Anna grimaced. “So what you’re saying is no one stole money?”
“Nobody. No money was ever stolen. Never a theft. And never a kidnapping. Only an exchange of equal amounts of cash. Income tax evasion, yes. Attempt to swindle Global, yes. But no theft. There’s no valid insurance claim because there was no loss,” St. James said triumphantly, smiling at Mary DeSilva, whose smile back was much bigger. St. James had just saved her $23 million.
“What a maze,” Anna muttered
“Remember Gyberson’s words to Dozer. ‘Not as they appear.’ It looked like theft, but it wasn’t. It was fraud.”
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