Confessions of a Wall Street Insider

by Michael Kimelman

  But all of this—everything—had changed. It felt irrevocable, precisely because it was. Yet even then, on that first horrible morning after my arrest, when the entire world felt like the darkest depths of Mordor, a palpable, tangible joy had survived. I knew I had to be strong, now and for what followed. I had to be strong for them.

  With Cam in my arms, I put a finger to my lips, to let him know to be quiet. He looked around and saw the two girls starting to stir. Phin was still asleep.

  “The whole family is here,” he whispered with a smile, as if we were the only two people sharing this secret.

  “Shower?” I whispered back.

  “Yes!” he yelled, thrilled at the prospect of a rare early morning, pre-breakfast shower. Bathing was usually a nighttime activity in our household, but a nice warm shower with Dad wasn’t a half-bad way to start the day.

  This isn’t real, said a voice inside my head. None of it.

  I blocked it out and followed my son to the bathroom.

  CHAPTER THREE

  SUNDAY WITH MOE

  ______________

  ONE THING YOU LEARN AS A potential felon is that there are many more people than you’d ever expect who have been though a tribulation similar to yours. As it turned out, I could swing a bat and hit a dozen people who were felons or had a family member who served time, something I had no idea about until my case broke. During those first forty-eight hours, numerous friends called me with stories about their dads, their brothers-in-law, their friends, or friends of friends. A few were dark tales, but most offered glimpses of redemption and second chances. Some were as simple as “I never told you this, but my father went to prison for a few years when I was growing up.” Some were more in depth and complex. Friends I had known for twenty years unexpectedly opened up their painful, hidden pasts to me. My friend, let’s call her Kelly, whom I hadn’t spoken to in close to fifteen years, called to tell me about her father and a business gone bad. “Remember when I had to ‘rush home’ right after graduation? It wasn’t because my mom was sick. My father had just lost at trial and was going to prison. We didn’t know what to expect or how our family would survive.”

  My college friend Randy Oser had one of the darker tales. His father had gotten into trouble and tried to navigate the system with an incompetent lawyer. In doing so, he became a pawn in a much bigger case. When he refused to cooperate, they crushed him and added charge after charge. His original sentence had been less than three years. The government brought new charges while he was locked away and broke, unable to defend himself. He didn’t walk out of prison for another twelve years, a shell of his former self.

  Perhaps because of his story, Randy was one of the fiercest proponents of my making a deal, any deal. He said he had seen a legion of dirty tricks, of empty promises, incompetent lawyers, and corrupt judges and prosecutors. His father’s story would’ve come as no shock to any citizen of the former Soviet Union. But for it to happen here, to an American, to someone raised on the goodness and fairness of our system, to a man who still choked-up at the Star Spangled Banner … that was a terrifying, eye-popping slap in the face.

  The biggest shoulder to lean on came, initially, from another college roommate and great friend, Moe Fodeman. Since our halcyon days at Lafayette College in Pennsylvania, our lives had been inextricably linked. He had always been a selfless friend. He asked for nothing and offered everything he could.

  The day after my arrest Moe called and performed a kind of psychological CPR, talking me down from my emotional cliff. I was facing the full wrath and resources of the Feds, and Moe was, technically, one of their lieutenants. An accomplished and respected Assistant US Attorney (AUSA) for the Eastern District of New York, Moe had the experience, the map, and the contacts to know exactly what I was facing. He made up some excuse about being in my area on the Sunday after my Thursday arrest, but I knew he had rearranged his day just to drive up from the city to Westchester to hold my trembling hand.

  Since Moe was bringing his son, Lucas, I recruited Cam for our outing. We would have lunch at Molly Spillane’s, a new bar on Mamaroneck Avenue. It was better known for Yankee games on the tube and prowling cougars in tube tops than as a place one might dispense sage legal advice. And I was acutely aware that that advice might not be purely legal. Moe was risking a lot by even being with me. Had a newspaper reported or one of his FBI buddies noticed us together, it would have damaged his career. At the very minimum, he would have been reprimanded for trying to help me.

  “You shouldn’t be here,” I said as he greeted me with a much-needed bear hug.

  “What are you talking about?” he said with a grin. “I’m not allowed to get lunch with one of my oldest friends?”

  “You’re a superstar, Moe. You’ve got a job that you’ve worked your whole life towards. First federal death penalty in 100 years. Joint Terrorism Task Force. Organized Crime unit. You’re a future US Attorney or senator. You shouldn’t even be taking my phone calls.”

  “Listen. This is still America. I’m not currying favor or using my influence to mitigate your case. This is just two friends hanging out.”

  “Yeah, and I’m sure Charlie Manson and Vince Bugliosi shared a Cobb salad at the Brown Derby post-arrest.”

  “It’s good to see the threat of federal prison hasn’t made you lose your sense of humor,” Moe said with a smile.

  His words brought me back to a reality that I still couldn’t fully fathom.

  “I’m looking at fifteen years—my kids won’t even know who I am when I get out,” I said, sotto voce, on the verge of tears, first making sure that Cam and Lucas were preoccupied tearing open Splenda packages.

  “You’re not getting fifteen years,” Moe said in a tone that dismissed my concerns.

  “I know I’m not. I’ll put on a ‘David Duke for President’ T-shirt and walk around the South Bronx before I’d go away to prison for fifteen years.”

  I was serious, too. At night, my closed eyelids bombarded me with fearful, deranged fantasies of suicide. But kids need a father, even if the relationship is thirty minutes a month on the phone with a bitter old felon. In my heart, I knew a father was irreplaceable, whatever the circumstances. I knew that my family would be better broke, in a grim one-bedroom apartment by the train tracks in New Rochelle, surviving together on food stamps, than any alternative that took me out of the picture permanently.

  “Stop it, Mike,” Moe said, sounding far too chipper, casually tipping back his second Diet Coke. “Remember, I don’t put murderers in jail for fifteen years. You’re not looking at anything remotely close to that.”

  “You read the complaint,” I countered. “Twenty years per count on the substantive insider trading charge and five years for conspiracy. That’s twenty-five years if it all goes bad.”

  “That’s not how it works,” Moe said, waving my concerns away. “Those are statutory maximums. That’s not what you’re facing. In a white collar case, it typically goes by the amount of money a victim loses. With insider trading, there are no victims. So they flip that and it’s the ‘money you made.’ They may have additional charges or bring in other items … but Mike! … the complaint says you made $16K.”

  Moe paused as if his own words had puzzled him.

  “Honestly, I’ve never even seen a complaint in a Federal case for a number like that, Mike. You belong on the People’s Court, not up in Leavenworth. I don’t even think five years is realistic, and that’s based on a worst-case scenario. I think you’ll have to do about seventy-two hours in Brooklyn MDC or three months of home confinement. Although if I were you, I might opt for prison over being locked at home with Lisa for the next three months.”

  He made me smile with that one. Both of our wives were equally capable of moments of incredible, unconditional love, but also of terrifying wrath. Moe might not know exactly what I was facing at home, but he probably had a damn good idea.

  For the first time in the last seventy-two hours, it felt like the boot heel ha
d been lifted ever so slightly from my throat; Moe, God bless him, was the first one to give me any clue about how the process actually worked. All at once, it dawned on me that the FBI’s threat about me not seeing my children for a very long time was not going to be measured in decades.

  “In fact, five years is a long time in most circumstances,” Moe continued, biting into a cheeseburger. “There are plenty of rapists and gang members that do less than a nickel.”

  He took another bite of cheeseburger.

  “Talk to Michael on Monday,” he said, referring to Sommer, my lawyer I’d not yet met with. “He’ll be able to really drill down with you on specifics. At a high level, your options will come down to this: Plead ‘not guilty’ and go to trial, plead ‘guilty’ and offer to cooperate, or plead ‘guilty’ and not cooperate. You need to think hard about cooperation and if you can provide something the FBI wants. It will mean no jail time, probably. Do you have something you can trade? Don’t answer that, but think about it for your meeting.”

  “Like what, generally? What do I trade?”

  “Something on a person. Something on Zvi or one of the other codefendants. Something that makes the case easier for the prosecutors to prove.”

  I paused for a second to think.

  “I don’t have anything,” I said. “And even if I did, something feels disgusting about a guy stepping down on others to save his own ass. I don’t think I did anything wrong and I’m not about to start making shit up.”

  “I don’t want to know details,” Moe said. “Remember, I’m your friend. Not your lawyer. If I get subpoenaed and they put me on the stand, I can be forced to repeat anything you’ve told me. Same goes for everyone else you speak to, with the exception of your wife, who has spousal privilege, or your lawyer. So don’t talk to anyone else about this case. Not even casually, not even in very general terms. Not your parents. Not your friends. And definitely not any of your codefendants. At this point you need to assume that every phone call, every conversation is being recorded.”

  “Actually, I think I can also talk with a priest or a shrink,” I said, adding the other two privileged conversants.

  “See, that $75,000 for law school wasn’t a total waste,” Moe said with a wry smile. “I’m not here to tell you what to do, Mike. I’m here to be a friend and let you know you’ll find a way through this. I’ve seen guys in your situation dozens of times. Stay positive. Know it will end one day. And know you’re a good person. You’ve been a great friend, and you’re an incredible father. Although we both could probably use some improvement on the husband front.”

  We both laughed.

  “Remember,” Moe said, “you didn’t hurt anyone. You violated a regulatory statute. The complaint I read seems paper thin. That doesn’t mean you don’t go to jail, but it will be at a level you can recover from.”

  You better believe I lapped up this “good news” that my predicament would end one day and I probably wouldn’t get gang raped like it was oxygen. For the last two nights, only heavy doses of sleeping pills had allowed the brief, phony salvation of sleep. My bed sheets were always soaked in the mornings from sweat, and I could barely manage to look at my children without breaking down. Moe’s words of support and encouragement were the first actual parries of optimism against the advancing thrust of darkness and terror.

  Let me just be frank. I could never have survived the coming months without him, or without my other friends and family, the ones who knew the real me, a person who didn’t even remotely resemble the financial criminal and consigliere, the greedy and evil caricature of me that was being peddled by the government and being lapped up by the press.

  “Tell me how it goes with Sommer, and keep your head up,” Moe said as we concluded our meal together. “Call me anytime, no matter what. I might not be a prosecutor much longer anyway. When that change happens, we can really talk.”

  I looked at him quizzically. Moe leave the public sector? Given my friend’s temperament, it seemed like a fantasy.

  “Farin wants a third kid,” Moe said, as if reading my thoughts. “It’s awfully hard to raise three kids in New York City on a government salary. It might be time to test the waters of private practice.”

  “Well … welcome to the dark side.” I said as we walked back outside. “I mean … I shouldn’t have phrased it that way. You know what I mean. I’ll call you after I meet with Sommer tomorrow.”

  “Please do,” he said and gave me a hug. “After all, I owe you. All your buddies do. Compared to you, Mike, we’re all in the running now for Husband of the Year.”

  I couldn’t help but smile, because deep down, I knew this was true. And I thought again about Lisa, probably in bed, sobbing and afraid and pissed at me. I couldn’t blame her. Being innocent didn’t change the fact that I was responsible for our mess. With each passing hour it became increasingly clear that my choice of business partners and associates—in particular, the track-suited brothers (fucking Zvi!)—could have been a whole lot better. And now those choices might just land me in prison and disrupt my family in God knew what way.

  Every marriage has its own private dynamics, with inevitable ups and downs. Don’t believe the people who tell you it can ever be perfect. Fight? Never. Fuck? Why of course: at least every other day, after fifteen years. Nope. Sorry, but I don’t buy it.

  Lisa had a right to feel she might have made the mistake of her life in marrying me, and I knew it. Driving back to the house from my lunch, with Cam quickly falling into a doze in the back, I remembered when we’d first met, at Duke’s on Park Avenue South. Moe, of all people, had organized a party there for the Lafayette-Lehigh game. It was fall of 1998.

  I noticed her right away. Or perhaps I should say “remembered.” When I’d been a senior, Lisa had been that hot redhead freshman dating a sophomore from our fraternity. Our frat brother was, for lack of a better word, already whipped. There was no doubt in hell who ran the show in that relationship. You could tell from a distance. At Duke’s—perhaps forgetting this detail—I immediately decided that I was going to go talk to her. She was surprisingly receptive. I don’t remember what we talked about, but I remember that when she laughed she blushed, and when she blushed she smoldered. I gave her my card, with SULLIVAN & CROMWELL emblazoned on it, and more importantly my cell phone number. I was heading back home to Los Angeles in a couple of days to see my family for Thanksgiving, but I asked her to call. She did. While I was there we talked on the phone several times. Long talks. This was back in the day when people still talked rather than texted. I had planned to stay in LA for ten days, but I flew back early just to see Lisa. Our first date was at the Bank Café, and it was a total hit. We connected in a way I’d never experienced. I learned so much about this fascinating, gorgeous woman.

  Lisa had been born in DC, where her father had served on the Council of Economic Advisers for the Nixon White House before being promoted to president of the Chicago Federal Reserve and serving in that post for twenty- odd years. He settled his family in an upscale suburb called Winnetka. It rivaled any town in Westchester or Fairfield County for privileged preppiness. She wasn’t a spoiled rich girl, however—at least I didn’t think she was, not really—although she was definitely accustomed to a certain level of comfort and style. It was clear to me that she expected her adult life would afford her similar circumstances. But Lisa wasn’t waiting for anyone to hand things to her. She was ambitious in her own right. When we met, she was working for Martha Stewart. Lisa would go on to produce live cooking shows on the Food Network before starting her own catering business. And I instantly liked that about her, this strong entrepreneurial side.

  As fate would have it, we also lived quite close to each other—she on 34th and 1st, while I was on 24th and 2nd. We moved in together in February of 1999, just two months after our first date. I waited till June to propose. Did it with a picnic dinner and a bottle of champagne at sunset, up on our rooftop. As you might imagine, planning a wedding with someone who produc
es live events for the Food Network can become a complicated process. Our planning dragged out for fourteen months, till we finally tied the knot at the Standard Club in Chicago. As newlyweds, we lived in the West Village. That changed after 9/11, when the sight of that tragic empty space down 7th Avenue, where the Twin Towers used to be—forever reminding us of friends we’d lost—led us out to the suburbs. First we tried Westport, Connecticut—full-on Martha Stewart territory—but the commute to the city was just too long, so we moved again and settled on quaint and quiet Larchmont. There, we soon welcomed Sylvie into our lives. Cam and Phinnie followed. The marriage was still far from perfect—our equally strong personalities often clashed—but we were in it for the long haul, come what may, and we both seemed to have a sense of that.

  Now, however, I knew that everything between us was about to change. To really splinter and fray. Under the weight of charges from the federal government, the crack that once existed would soon become a canyon.

  CHAPTER FOUR

  INTO THE LAWYER’S DEN

  ______________

  I’VE ALWAYS BEEN AMBIVALENT ABOUT HOW I felt about lawyers, even after having been one myself for a while. Never in a million years did I think that my future—my entire life, really—would actually rest in a lawyer’s hands.

  Yet, suddenly, there I was, loitering outside the lobby of the Credit Agricole building at 1301 Avenue of the Americas, rubbing my sweaty palms together and trying to muster the will to walk inside.

  The securities firm Wilson Sonsini occupied several floors of the building, along with the now-bankrupt Dewey Leboeuf and several other major banks. I was in the belly of the beast.

  I knew the area fairly well. It was one block south of the Hilton Hotel that was my parents’ preferred abode whenever they came to visit New York. When I gave my name to the receptionist on the fortieth floor, I was relieved that she didn’t recoil. I felt like my name was all over the news.