Insider Justice: A Financial Thriller (Marc Kadella Legal Mysteries Book 8)

by Dennis Carstens

  “That’s the company that Del Peterson told us about. He thought there was some insider trading being done by Cal for his little group,” Marc excitedly said.

  “Yes,” Vivian agreed. “And I was told about a large contract being awarded to Morton Aviation by the government. Remember?”

  “Yes,” Maddy said.

  “I checked,” Vivian continued. “The contracts have been pulled pending an investigation. It seems the right wing ripped off during what should have been a routine test dive. The pilot was lucky to get out with his life.”

  “What’s going on with Morton’s stock?” Marc asked.

  “It’s crashing. If there has been short selling as there was with Cannon Brothers,” Vivian said, “this could be worth a couple of billion dollars. Billion with a B.”

  There was a light knock on the door and Tony Carvelli came in. He greeted everyone and sat next to Vivian.

  “My guy came up with a lot more names,” he announced. He removed several folded pages of paper from his inside pocket. He gave it first to Vivian to look over then pass around.

  While the review and discussion of the names was taking place, Marc moved to the table Vivian had used. He made a phone call and spent a few minutes on it.

  “I just talked to the kid, Eric,” Marc said when he returned to his seat. “He’s going to do the same research into possible short selling of Morton Aviation that he did with Cannon Brothers.”

  “Do you recognize any of these?” Carvelli asked Marc.

  “Tell us about Marjorie Griebler,” Marc said as he took the list from Carvelli.

  “Oh, yeah,” Maddy said. “Did you finally get the chance to use that suave, debonair, Italian charm on her?” Maddy teased.

  “His what?” Connie sarcastically asked.

  “Actually, I did better than that. I cornered her and scared the hell out of her,” Carvelli replied.

  “Anthony, you didn’t,” Vivian said chastising him.

  “She’ll be all right. I got what I wanted. We were right. She specifically remembered being given an envelope to mail to you,” Carvelli said looking at Marc. “She said Zach gave it to her a couple of days before he died. And guess who she gave it to?”

  “Just tell them,” Marc said referring to Maddy and Vivian. “I told Connie already.”

  “Brody Knutson,” Carvelli said.

  “Who is he?” Maddy asked.

  “He’s the managing partner of Everson, Reed,” Vivian replied. “He’s been trying to get me as a client for years.”

  “I don’t get it,” Marc said looking at Connie. “Why would he trash his firm’s case? He had to know if that memo got out Cannon Brothers would crash and burn. It would open up a huge verdict for punitive damages. How could that be good for Everson, Reed?”

  “They’re big enough to take the loss,” Connie said.

  “But the newspapers reported the FBI found Zach and Lynn’s fingerprints on it,” Marc said.

  “So? Makes it even better. If people think the firm put it out to the public but can’t prove it, they look like ethical good guys to the public. Yet they can deny everything. They can deny violating a client’s privilege,” Connie replied.

  “Which they’ve done,” Marc said. “Wait a minute,” Marc continued. “Everson, Reed is Cal’s law firm. A bunch of them were at his Fourth of July party.”

  “True,” Connie said. “So, do you think Brody slipped this to Cal and Cal leaked it to the media to crash Cannon Brothers?”

  “They’re about to file bankruptcy,” Vivian said.

  “Seven or eleven?” Marc asked referring to bankruptcy chapters. A seven would mean a liquidation and shut down. An eleven would mean an attempt to reorganize their debt and stay in business.

  “I have heard it is a seven,” Vivian said.

  “They had over four hundred employees before this happened,” Marc quietly said. “That’s a lot of families hurt by what Cal and his pals are up to. Four hundred jobs lost, four hundred families now trying to pay their bills and feed their kids. And these people try to claim this type of crime is no big deal because it is victimless.”

  “And that doesn’t take into account the pension plans, 401Ks, IRAs and other savings programs ordinary people have that take a hit because this stuff goes on all the time and the government does almost nothing about it,” Maddy said. “I guess it should make us all feel better knowing that the politicians involved in this victimless crime have their salaries and pensions paid by the taxpayers,” she added sarcastically.

  The room went silent while everyone contemplated what Marc and Maddy just said. After a long minute, Carvelli broke the silence.

  “Can we break Brody Knutson? We need corroboration for what Del Peterson has given us. This guy could be the ticket.”

  “Yes, we can break Brody Knutson,” Marc replied.

  “We need to go over the recordings again,” Maddy said referring to the listening devices inside Cal’s house. “I remember him referring to someone he called ‘the lawyer’ a few times. I don’t think he ever mentioned a name. It could be this Knutson guy.”

  Marc turned to her and said, “Good catch. I heard it too. At the time it just seemed like an innocuous statement.”

  He looked at Carvelli and said, “Have a couple of your guys get together with Conrad and see if they can find this reference.”

  “And put some context to them,” Carvelli added. “In the meantime, we’ll start working on Brody Knutson. Find a way to go at him. Speaking of Conrad, has anyone heard from him lately? Has he been around?” Carvelli asked looking at Vivian.

  She shook her head and said, “Not for a few days.”

  “I’ll get a hold of him tomorrow and get him out here,” Carvelli said.

  “What can you share with us about the lawsuit?” Vivian asked Connie.

  “We’ve hit a snag. We’re getting more of this little investment group signed up. But every one of them signed an authorization that pretty much lets this broker they used do what he wanted. There’s nothing in it about only investing in low-risk things. It gave him complete discretion.”

  “And,” Marc said, “they received monthly, written statements spelling out exactly where their money was going. They also had online access to their accounts. Every one of them admitted they knew this.”

  “So, they’re screwed,” Carvelli abruptly pointed out.

  “Not necessarily,” Connie replied. “The stock was manipulated to cause it to crash. The broker should have placed a stop-loss on the accounts.”

  “What’s that?” Carvelli asked.

  “Basically, you put a flag on the stock. If it falls to a certain point the computers that run the markets automatically sell the stock. It’s to reduce potential losses,” Maddy told him.

  “You can do that?” Carvelli asked, who then looked at Marc.

  Marc shrugged and admitted, “I didn’t know either before Connie explained it to me.”

  “We have a case for negligence,” Connie said. “We’ll see.”

  “I’ve been wondering,” Maddy said changing the subject, “the memo that was sent to the media shows that the people who ran Cannon Brothers knew about the defect. How can they now just file bankruptcy and walk away? Children died. Some were crippled for life. This just isn’t right. The people who put this product out on the market should be in jail.”

  “Negligent homicide,” Marc said. “Why not? Maybe that’s the way to go after them.”

  “Maybe,” Carvelli agreed. “I could talk to Owen,” he said referring to Owen Jefferson, the Minneapolis police lieutenant in charge of their homicide division and a friend. “He could go to the county attorney.”

  “Not a bad idea,” Marc agreed. “If nothing else, it would be leverage to use on the people at Cannon Brothers to flip on Cal Simpson. I think that time we saw them meet with him was more than a social call.”

  “Let me and the guys find out what this lawyer, Brody what’s-his-name…” Carvelli started to
say.

  “Knutson,” Marc said.

  “Yeah, him,” Carvelli said. “Let me see what he has to say first. If we can crack him, that would be some corroboration of what the weenie congressman told us.”

  “Maybe I’ll give Steve Gondeck a call,” Marc said referring to a lawyer he knew in the Hennepin County Attorney’s office.

  THIRTY-EIGHT

  “I thought we had guards at the doors? Who’s in charge of security around here?” Carvelli heard a familiar voice say as he entered the MPD Homicide Division.

  “Funny, Anderson,” Carvelli replied to the man who had made the wisecrack.

  “How are you, Tony?” the detective asked as the two of them shook hands.

  “Where is everybody?” Carvelli asked as he looked around the mostly empty room. “Krispy Kreme come out with a new brand of doughnuts?”

  “Would I be here if that was true?” Anderson asked. “We have to work for a living.”

  Bob Anderson was a friend of Carvelli’s and a couple of years from retirement. He was also the best homicide detective with the MPD.

  “Oh, is that what you call what you do? Working for a living.”

  “How’s Jake?” Anderson asked referring to Jake Waschke, a mutual friend.

  “He’s good,” Carvelli replied. “If you ever go outside again, you should stop by and see him.”

  “I know, I think about it, then get busy and forget. What are you up to?”

  “Go see Jake,” Carvelli said and poked a finger in his padded midsection. “I’m here to see your boss,” he continued. Carvelli turned and looked at the office of Owen Jefferson. He was at his desk and waved to indicate Carvelli should come in.

  “You go see Owen,” Anderson said as he slipped on a sports coat. “I’m going to slide out of here and go see Jake right now while I’m thinking about it. I’ll see you later.”

  “What’s up, Mr. Carvelli?” Jefferson asked with emphasis on the word ‘mister’. The two of them had known each other almost twenty years. During that time, while Carvelli was still on the job and after his retirement, their paths had crossed many times. Through mutual respect, they had become good friends. And even though Jefferson was now a lieutenant in charge of homicide and Carvelli worked for a well-known defense lawyer, they had remained good friends.

  “Well, Lieutenant Jefferson,” Carvelli said giving back a little unnecessary formality. “I would like to run something by you.”

  “All right, smartass,” Jefferson said with a warm grin, “What?”

  When Carvelli had finished telling Jefferson the story about Cannon Brothers Toys and the dead and injured children, he sat back and waited for a response.

  “It’s horrible, Tony,” Jefferson said. “These assholes should be in jail. But you’ll have to run this by Lydia Foster across the street.”

  Jefferson was referring to the new Hennepin County Attorney, Lydia Foster. She was barely six months into the job and not well known. Three years out of law school, she had been elected to the job, replacing a political appointee who had been a disaster. The new county attorney was still feeling her way around.

  “How is she doing?”

  “Too inexperienced,” Jefferson shrugged. “Sure, I’m biased in favor of African-Americans, but she could have used more experience. But I hear she’s calmed the waters over there after Penny Nugent just about chased everybody out the door. And she’s smart enough to rely on her senior people. I think she’ll probably be okay.”

  “What do you think? Could we make a case for some type of manslaughter? Kadella’s going to check with Steve Gondeck,” Carvelli said.

  “You know, it would be nice to try. These corporate assholes pull this shit, then end up walking away rich. It would be nice to make them pay.

  “When’s Kadella seeing Steve?” Jefferson asked.

  “Today or tomorrow.”

  “How is he doing?” Jefferson asked.

  “Good. He was damn lucky.”

  “For a defense lawyer, he’s not a bad guy. Tell him to have Steve call me after they meet,” Jefferson said.

  “Will do,” Carvelli replied.

  Carvelli went out the Fifth Street side of the Old City Hall Building. It was a beautiful late-summer day. Temps were in the upper seventies and there was plenty of sunshine. He checked his watch again thinking he had about a half-hour to wait.

  He turned to his right to go down to the corner to go across Fifth. As he did a Light-Rail train pulled up and stopped. Before he got to the corner, the train was starting up to make its run to Target Field where the Twins were finishing another disappointing season.

  After crossing Fifth, he found an empty bench with a view of the fountain in front of the government center. As nice as it was today autumn was in the air in the evenings. This, of course, would be followed by winter. Real winter that would be classified as Armageddon if it ever hit the East Coast.

  While watching the lightly-clad younger women strolling by, Carvelli became lost in his thoughts. He did not see her coming until she plopped down on the bench next to him.

  “Hey, Studley,” Gabriella Shriqui startled him by saying. “Want to buy a girl lunch?”

  “Jesus, Gabriella! You just took five years off of my life. Five years I can’t afford.”

  “Well?” she asked.

  “What are you doing here? Are you back to being a lowly reporter?”

  “Checking on a trial; that councilman who got busted on a cocaine and bribery sting,” she replied. “Don’t you watch my show?”

  “Oh, um, yeah, religiously,” Carvelli stammered.

  “What are you doing here, besides girl watching?” she asked.

  “Business,” he replied. “I’m meeting someone in about twenty minutes. Although she doesn’t know it.”

  “What have you guys been up to? I haven’t seen or talked to Maddy or Marc since the hospital. Are they mad at me for filming the accident?”

  “No, of course not,” Carvelli said then paused for a moment. “You know, we do need to talk to you. We…”

  “You have a story,” she said enthusiastically.

  “Maybe,” he agreed. “Look, sweetheart. You need to get out of here. I need to be alone. I’ll make sure Maddy calls you. I promise.”

  “Okay,” Gabriella said. “If she doesn’t, I’ll call her. We need to go out anyway. I’ll see you later.”

  Gabriella was barely out of sight when Carvelli saw who he was waiting for. Coming across Third Avenue, earlier than usual, was a slender, attractive woman in her late twenties. She was dressed tastefully in a navy blue skirt and white blouse. Very business-like. And her name was Brooke Hartley.

  Carvelli watched as she quickly walked to the granite bench surrounding the fountain in front of the building. Dan Sorenson had been watching her for several days and, weather permitting, she came here every day to eat lunch. She took a place on the bench facing the building and removed a sandwich and yogurt from her purse. As she started to eat Carvelli stood up and walked toward her. As he did so, he realized Brody Knutson liked his assistants young and pretty. Carvelli took a seat a couple of feet from her, not too close to make her wary or uncomfortable. His approach with her was going to be very different than Marjorie Griebler.

  “Please don’t be upset, Ms. Hartley,” Carvelli said. When he said this, her back straightened and her right hand went into her purse. Seeing her reach into her purse—he hoped for a can of mace and not a gun—Carvelli held up his hands in a gesture of friendliness.

  “My name is Tony Carvelli. I’m a former Minneapolis police detective and now a private investigator.”

  He still had his hands in the air as he continued. “I’m investigating the deaths of Lynn McDaniel and Zach Evans. I’ll show you my credentials if you promise not to shoot me,” he said with a smile.

  She smiled slightly at his discomfort and removed her hand from her purse. In it, she held a shiny, chrome whistle.

  “Oh, god,” Carvelli said. “Don’t b
low that thing. Half the cops across the street would come running and would love to arrest me just for the fun of it. I’d never hear the end of it.”

  He showed her his license and a picture ID. She looked them over, handed them back and said, “I don’t know why you want to talk to me. I barely knew Zach Evans and had only met Lynn McDaniel once. It’s terrible what happened, but I don’t know anything about it.”

  “Okay,” Carvelli replied. “Let me ask you a couple of questions. If you want to tell me it’s none of my business, I won’t be offended.

  “How much money did you invest in Cannon Brothers stock?”

  She looked at him with a puzzled expression and said, “None. I’ve never bought any of their stock. Thank God. The company’s in bankruptcy. Why?”

  “One more,” Carvelli said. “How much did you invest in Morton Aviation?”

  “What? Where is this coming from? None. I’ve never heard of Morton Aviation,” she answered.

  “I didn’t think so,” Carvelli said. He took a small piece of paper from his shirt pocket and read off a social security number.

  “How did you get my social security number?” she asked, now becoming visibly angry.

  “It’s not an identity theft thing,” Carvelli assured her. “It’s possibly worse. Your name is on a list, with many other people, and was used to buy and sell stock. Specifically, for you, many thousands of shares of both Cannon Brothers and Morton Aviation. The shares were purchased in your name and under your social security number and sold when the price was high. Then you borrowed and sold short shares of these companies. You made a fortune doing this, and it was illegal.”

  “I did not!” she practically screamed. “How did you…”

  “Sssh, Brooke, please. I know you didn’t. Your information was used by someone on behalf of a lot of other people, including some crooked politicians.

  “Trust me. I have an assistant U.S. attorney involved who knows you were used as a cutout. Please,” Carvelli said, “you’re going to be all right.”

  “Who? Goddamnit!” she said barely containing her fury.