MD01 - Special Circumstances

by Sheldon Siegel

  Now I'm sure there's nothing important in the will. "I appreciate that, Charles."

  "Besides," he says, "I like to help out my partners whenever I can."

  I hadn't noticed this generous side of his personality when he and the other partners voted to fire me. "I under- stand his estate's divided into three parts. A third goes to Beth, a third goes to the kids and a third goes to some charity in Bermuda." I'm trying to set him up. I know the International Charitable Trust is set up in the Bahamas. I want to see if he'll correct me. And if he'll talk about it.

  "Actually," he says, "the charity is in the Bahamas."

  I pretend to make a note on my legal pad. "The Bahamas," I say slowly. "What's the name of the charity?"

  "What difference does it make?" he says, a little too defensively.

  "Probably none," I lie. "I'm just trying to complete my file."

  He scowls. "It's called the International Charitable Trust," he says.

  I continue writing. "Does it benefit underprivileged kids or something?" I ask innocently.

  "Something like that. I'm not really sure."

  He's a lousy liar. "Is it managed in the Bahamas?"

  "Oh yes."

  "You wouldn't happen to know who manages it, would you? I'm sure we could look it up, but it'll save me some time if you know. I'll bet there's a registry of charitable trusts."

  He looks uncomfortable. "I really don't know very much about it."

  I take it back. He's not just a lousy liar. He's a really shitty liar. "Actually," I say, trying to sound offhand, "it's probably not important. I'm sure the money goes to widows and orphans." I shuffle my papers and look at a blank sheet on my legal pad. "My investigator got a little information. Says here the trustee is First Bank Bahamas. A guy named Trevor Smith. I'll give him a call."

  His face returns to its customary pasty color. "I know Smith," he says. "I've worked with him on some matters. I'd be happy to give him a call. I'll see what I can find out."

  "I don't want to impose on you. I know you're busy. I'll call him."

  His eyes always give him away. "It's no problem—really," he says. "Let me save you the trouble. He's a banker in the Bahamas who works with a number of our foreign clients. I'm sure he won't tell you anything more than what I'm about to tell you now."

  How magnanimous. Obviously, Mr. Smith has never been subject to my persuasive powers.

  "Bob checked it out," he says. "I'm sure everything is completely legal and aboveboard."

  I'm convinced. I decide to let him squirm. "Does First Bank get a fee for acting as the trustee?"

  "What difference does it make?"

  "Probably none. I'm just curious."

  "I think they get a fee."

  He's digging himself in deeper. "A large fee?"

  "I don't know. It's probably based on the amount of assets in the trust."

  "I see." I watch his eyes. "And do you know how much that fee might have been last year?"

  His eyes dart toward the adding machine again. "I really wouldn't be able to venture a guess."

  He's a really really shitty liar. "Are you involved in the administration of the trust?"

  He squirms. "Technically, I hold the title of trust protector. It means I'm the administrative agent. It's just a formality. All the management is in the Bahamas. Bob asked me to act as trust protector in case they needed a signature in a hurry."

  "Does S and G get a fee for the time you spend assisting with the administration of the trust?"

  He tugs at his tie and sips his coffee. It must be cold by now. "No, it doesn't."

  I've been watching too many Columbo reruns late at night. "If you're the administrative agent, how come S and G doesn't get a fee?" S&G doesn't do a lot of pro bono work.

  "Actually," he says, as he shifts in his chair, "I'm paid a modest fee for my efforts."

  "You mean the firm gets a fee, right?"

  "No. I get the fee."

  "I don't understand. If you're doing this trust administration on behalf of the firm, why doesn't the firm get the fee?"

  He takes a gold pen from his drawer and begins to play with it. "I do trust administration on my own time, and not on behalf of the firm. It's a liability issue."

  "A liability issue?"

  "Yes. This is a law firm. The services I provide to the trust fall into the category of fiduciary activities, which our malpractice policy doesn't cover. We notified our malpractice carrier when I was first asked to serve as trust protector. They wouldn't let me do it unless I agreed to do so in my individual capacity, and not in my capacity as an attorney in the firm."

  Sounds like our malpractice carrier wants to insure just the right side of his brain, but not the left. "So you did this at the insistence of our malpractice carrier?"

  "I had no other choice." Then he adds, "I had to sign an agreement stating that I would indemnify the firm for any losses it incurs in connection with the activities of the trust." He gives me a "so there" look.

  "You must collect a fairly substantial fee for this work—especially if you have to carry your own insurance and bear the risk of indemnifying the firm for any losses."

  "In reality, my fee is very modest. I did it as a favor to Bob."

  And out of the goodness of your heart. "If you don't mind my asking, Charles, about how much was your fee last year?"

  He tenses. "That's none of your business, Mike."

  It's the answer I expect. "I understand. What happens to the trust now? Where does the money go now that Bob's dead?"

  "I believe it's distributed among various charities in the Bahamas."

  Of course. "Charles, do you happen to know what those charities are?"

  "I don't recall, Mike." He smiles nervously.

  Very persuasive, Chuckles. You're the administrator of a trust in which you don't even know who the beneficiaries are. The fog is getting really thick in here. "Think you could find out for me?"

  "Probably. It may take some time."

  I'll hear from him the Tuesday after hell freezes over. "Maybe Trevor Smith can get me a list."

  "I'll call him for you."

  "That won't be necessary." I love to watch him squirm. "Charles," I say, "you know Beth served Bob with divorce papers right before everything happened. Was he going to change his will?"

  "Not that I'm aware of," he replies. There's a tentative note to his voice.

  "Did you do the estate planning work for Vince Russo?"

  He nods. "As a matter of fact, I did."

  "Would you mind telling me the names of the beneficiaries of his estate?"

  He frowns. "I'm afraid that's confidential, Mike. I realize some people think Vince may have committed suicide. However, until a court declares him legally dead, his estate does not become a matter of public record. As a result, I'm not at liberty to discuss his situation with you."

  "I see. You haven't heard from Vince, have you?"

  "Nope."

  "Well, if you hear from him, I'd appreciate it if you'd let me know."

  "I promise."

  I glance out the window. "Let me ask you one other thing, Charles. How's the firm doing?"

  "Just fine."

  He'd never make it as a trial lawyer. "I'm sure the tragedy has taken its toll."

  He tries to look solemn. "It has. We've had some difficult times. But nothing insurmountable."

  I look at the adding machine. "I saw in the paper you decided to let some people go."

  "Yes we did. It wasn't easy."

  "Layoffs never are, Charles."

  "They weren't layoffs. We do reviews this time of year."

  I'm convinced. "I'll let you know if I need anything else, Charles. By the way, could you ask your secretary to give me the phone number for Trevor Smith?"

  "He's full of it, Mike," Rosie says. Later the same evening, Rosie, Grace and I are eating at Spanky's, a burger joint in Fairfax, not far from my apartment. It's been Grace's favorite restaurant since she won a free sundae in a colo
ring contest a couple of years ago.

  Rosie's reaction to my report on my discussion with Charles Stern is succinct. "I'll bet he knows everything there is to know about the International Charitable Trust," she says. "He's yanking your you-know-what." Rosie's vocabulary switches from R to PG when Grace is around.

  Grace's eyes open wide as she takes a long drink of her milkshake. She wipes her mouth with the back of her hand and says, "What's your ‘you-know-what,’ Daddy?"

  I smile. "Ask your mother."

  Rosie looks at her seriously. "I'll explain it later, honey."

  I turn back to Rosie. "I called Trevor Smith when I got back to the office. He has a beautiful British accent." I grab a french fry. "And he wouldn't tell me anything."

  "And?"

  "He's going to be off the island, as they say, for at least the next four weeks. Meetings in Kuwait."

  "Does he have an assistant who can help us?"

  "She's going to Kuwait, too."

  "What a surprise," says Rosie. "What are you going to do?"

  "I'm going to have Pete check it out. He's been looking a little tired lately. I think he may need a vacation."

  She grins. "Any place in particular you have in mind?"

  "I understand the Bahamas are very nice this time of year."

  "When might he be going?"

  "I think he might be able to clear his calendar about four weeks from now."

  Rosie's pleased.

  25

  "TERMINATED IN THE ORDINARY COURSE OF THE REVIEW PROCESS…"

  "We regret the media has characterized our personnel moves as ‘layoffs.’ While it is contrary to firm policy to discuss individual situations, the attorneys who were asked to leave were terminated in the ordinary course of the review process for performance reasons."

  —Arthur Patton. San Francisco Legal Journal. Thursday, February 19.

  Wendy Hogan calls the next morning. "I suppose you've heard by now?" she says.

  "Heard what?" I ask.

  "Come on, Mike."

  I haven't a clue. "What is it?"

  "There were layoffs at S and G." She pauses. "I got fired."

  "Shit."

  "They told the papers we were canned for performance reasons. It's all chickenshit. We were laid off because there wasn't enough work and the firm is in financial trouble."

  "Everybody knows what's going on at S and G. Nobody will believe their bullshit."

  Silence. "How am I supposed to find another job when they said we were fired? We're the lepers of the San Francisco legal community." She pauses. "Andy called last night. He said he's going to go to court to challenge our custody deal."

  "He's an asshole. Your attorney should be able to take care of it."

  "My attorney's on vacation. He won't be back for two weeks."

  I don't say anything.

  "Mike," she says, "can you help me with this?"

  Except for what I learned when Rosie and I split up, I know nothing about divorce law. "I'll see what I can do. Why don't you come down to my office around noon and we'll talk."

  What the hell. It's not like I have to prepare for a murder trial. Besides, I like her.

  Wendy and I are eating Chinese takeout in my office at noon. She looks around. "Pretty tight space," she says.

  "You get used to it." I nibble on a pork bun. "Sounds like I need to find you a good divorce lawyer," I say.

  "I need a job."

  She's right. It helps to be employed when you're in a custody fight. Believe me, I know. When Rosie and I split up, I got the bright idea that I was better suited to have custody of Grace. Bad idea. It led to the nastiest fight in my life. Ultimately, at the suggestion of Rosie's mom and mine, I came to my senses and gave in. Then things started to get better.

  Wendy's ex-husband may be a horse's ass. At the moment, however, he's an employed horse's ass. "You're good at what you do. You'll find something."

  "It's not that easy. I don't have my own clients. Firms aren't hiring tax lawyers." She takes a deep breath. "Could you use some help? Maybe I could work on Joel's case."

  I lean back in my chair. I'm buying time. How do I say this? "We do criminal law around here. You know—we represent crooks."

  She twirls her hair with her finger. "And most of my clients are in the real estate business. They're crooks, too. Except for the fact that what they do is technically legal."

  Touché. "I'd like to help you. But what I really could use is another experienced criminal defense attorney. Preferably one without Mort Goldberg's ego. It isn't that you aren't good at what you do. It's just that what you do isn't what we do. You wouldn't hire me to do an IPO."

  "I can do research. I can interview witnesses."

  I frown. This isn't a good idea. I can't afford another attorney.

  "I'm in a tight spot," she says. "Maybe there's something else I can bring to the table. I've done tax planning for Bob and Vince. Maybe I can help you with the investigation."

  This is intriguing. But it also presents a potential problem. "How much tax planning?"

  "A lot."

  I pause. "Slow down. For one thing, the judge won't let you testify if you work for me. It confuses the jury."

  "I know. I used to work for a superior court judge."

  "I remember. There's another thing. The stuff you know is probably protected by the attorney-client privilege."

  "Most of what I know is already a matter of public record. Besides, Bob is already dead. In all likelihood, so is Vince." She takes off her glasses. "The privilege died with them. Who's going to complain? Their ghosts?"

  Technically, that may not be entirely correct. Just because you die doesn't mean your lawyers can tell the world all your deep, dark secrets. "What about the beneficiaries under their wills?"

  "What about them? The beneficiaries under Bob's will have already been notified. Nobody's going to complain. They'll notify the beneficiaries under Vince's will as soon as he's declared legally dead, if that happens. Like I said, who's going to complain?"

  Without getting into the finer points of the potential claims of their respective heirs, I have to admit she may have a point.

  "I won't tell you anything you couldn't find out yourself from public records," she says. "And you don't have to hire me directly. I could start my own firm and you could retain me as special counsel. My name wouldn't appear on the pleadings. I won't appear in court unless I'm called as a witness. What's wrong with that?"

  "Nothing I can think of, I suppose."

  She smiles. "You see, we're making progress. As Bob Holmes used to say, good lawyers provide practical solutions to real-world problems."

  Right. I've been in practice for a month and a half and I have a real-world problem—another mouth to feed, even if her name doesn't appear on my letterhead. "I can't afford to pay you much."

  "I understand. At least I can tell a judge with a straight face I'm building my practice."

  "All right. The law offices of Wendy Hogan are hereby retained as special counsel. Don't even think about asking for a retainer. You can help Pete with the investigation."

  "Anything you say." She's pleased. "Thanks, Mike."

  I finish my moo shu pork. "Let me ask you something. Do you know anything about an entity in the Bahamas called the International Charitable Trust?"

  She grins. "What would you like to know? I did the legal work to set it up."

  Bingo.

  Wendy opens a fortune cookie. "The International Charitable Trust," she begins, "is something of a misnomer. For one thing, it isn't really international. It was formed in the Bahamas by one guy—Bob Holmes. For another thing, it isn't the least bit charitable. Unless, of course, your favorite charity happens to be Bob Holmes. It's a tax dodge. I set up a similar trust in the Bahamas for Vince Russo called the Charitable Trust for Humanity. It isn't charitable, either."

  I read my own fortune cookie. It says, "You are about to embark on a great romance." Even the fortune cookies know I'm hard up.
"You aren't violating anybody's attorney-client privilege here, are you?"

  "What if I was?"

  "Nothing. Just asking."

  Her eyes sparkle. "Everything I'm about to tell you is a matter of public record. Of course, the public records in the Bahamas are a little trickier to track down."

  I grin back. "So what were these two trusts all about?"

  "They were set up so Bob and Vince would each have a place to park some money outside of the U.S. in a hard-to-find, safe, tax-free place." She's getting excited. "Bob and Vince hated two things more than anything else in their lives: taxes and alimony. And when you made as much money as they did, and when you got divorced as many times as they did, you paid a lot of taxes and alimony."

  I can picture Bob and Vince swapping stories about who paid more to their respective ex-wives. Wendy explains that they wanted to find a place to stash as much money as they could in a tax-free jurisdiction where it would be hard for their ex-wives to find. The Bahamas had everything they needed. Perfect weather. Established financial system. Excellent bank-secrecy laws. So Bob and Vince each formed a trust. First Bank Bahamas was the trustee. Trevor Smith handled all the arrangements. It's a standard tax scam. She says Smith is very smooth.

  I take a gulp of water. "Actually, I spoke with him yesterday," I say. "You're right. He's very polished."

  "And very slippery. Trying to get a straight answer from him is like trying to hold a gallon of water in your bare hands. They did all their investing through the trusts."

  I'm pleased. She may be telling me a little more than what I would have been able to find out from the public records in the Bahamas. "Who dreamed this up?"

  "Who do you think?"

  "You?"

  "I had a little help from Chuckles."

  It fits. "So it's Chuckles who set up this elaborate charade."

  She says in a businesslike tone, "It's all perfectly legal, Mike."

  "So it is." In this case, the word "legal" is spelled S-L-E-A-Z-Y.

  She confirms that Chuckles holds the title of trust protector, and First Bank is the trustee. "First Bank won't do anything without instructions from Chuckles," she says. "He gets a fee for his trouble. He got permission from X-Com to manage the offshore trusts on his own time. The firm decided it didn't want to have the fiduciary liability for managing somebody else's money."