Fraudulent Transfers Read online

  “Do you have a few minutes to talk about a new bank-related matter?”

  “Sure. We’re on an encrypted cell phone connection here and we should have good service for the next hundred miles or so since there’s not a hill or a tree in sight. So, tell me what’s up.”

  I then gave Ed as many of the details of the Turnbull and Williston counterfeit cashiers check dispute as I could remember. I also told him Front Street Bank and the Fed had agreed to a litigation standstill and a cooperative investigation before engaging in further finger pointing and that, hopefully, Merchants Bank and Turnbull and Williston Wealth Management, LLC would join in this as well.

  After hearing my description of the situation, Ed responded: “As you probably know by now from Front Street Bank and Veronica, there’s been a rash of these counterfeit cashiers check scams in the past year or so. The crooks have become very sophisticated and the Fed has yet to come up with any reliable means by which to detect a counterfeit cashiers check after it’s converted to a digital image and let loose in the Fed’s now totally electronic check collection system. It’s going to be tough to track down the perpetrators and even tougher to retrieve the missing money. But, depending on how this poker tournament goes, I’m in need of a new assignment and this one certainly sounds interesting.”

  “Any guess as to your fees for this job?”

  “Not at this point. I’ve got some preliminary thoughts on where to start digging but it’s impossible to tell what will come next, and I need to see all of the information the brokerage firm can provide me with. I’d suggest we do the usual arrangement and you try to get me authority to spend up to, say, $10,000. When we start to get close to that threshold, we’ll evaluate what I’ve been able to accomplish and what the next steps are likely to be, and likely to cost. For you, the usual discounted rates. One-fifty an hour for routine stuff. Six hundred an hour for home run hours. I get to decide what’s a home run hour.”

  “That sounds reasonable. I’ll try to get Front Street Bank and the Fed to agree to share up to $10,000. I doubt Turnbull and Williston will participate since those guys are still in their self-righteous denial mode. Merchants Bank might be willing to participate if we can get it on board with the standstill agreement proposal. I’ll let you know what I work out. If the lights go green, do you think you can jump on this after the poker tournament is over next week?”

  “Yes. That’s good timing from my perspective, and I may be able to do some initial scratching around in between sessions of the tournament. I’m not big on sitting by the pool in between sessions since sunshine is poisonous. Also, I could always get blown out early, leaving me with idle hands and a need for income. Assuming you get approval to hire me, I’m going to want as much information as possible from Turnbull and Williston’s files, and from their phone records. All phone conversations between the brokerage firm and Salamante should have been recorded, and those phone calls could give us our best leads.”

  “Got it. I’ll call or send you an email or text message as soon as I know more. Good luck with your tournament. And Ed, as always, thanks for your willingness to help.”

  Chapter 5

  The next morning, Friday, I paid a visit to Mike Lawrence at his office at the bank and, although he wasn’t happy about it, got him to agree to share up to 50% of the first $10,000 of charges from Ed. “McConnell, see if you can get that down to 25%.”

  I then called Veronica and asked her to try to get authority from the Fed to cover the other 50%. “OK, I’ll put in a call to Wally Kartz, Mike Lawrence’s friend at Fed headquarters in Washington. He’s our best—and maybe our only—hope of cutting through the bureaucracy on something like this.” She called me back later in the day and said the Fed was on board, but the money would need to be paid in response to an invoice from McConnell Jones & Knight, LLC, vaguely described as “contract services.”

  Just before noon, Josephine Houghton called. “Jack, my client has agreed to a forty-three day standstill—starting today and running through Friday, December 30. But if the money isn’t back in my client’s account by then, we’re coming after Front Street Bank, all guns a-blazing.”

  “I don’t suppose Messrs. Turnbull and Williston are willing to help pay for the private investigator I mentioned.”

  “Are you delusional? Don’t push your luck.”

  “I didn’t think so. Can we set up a time when the investigator can get on the phone with you and me and Turnbull and Williston and go over what’s in their files, and make arrangements to get copies of all of the documents and copies of recorded phone conversations with Salamante?”

  “OK. I’ll try to set that up sometime next week. Tell me again, what’s the name of your investigator?”

  “Ed.”

  “Just Ed?”

  “Yes. Just Ed.”

  “This is all pretty weird, Jack. I hope you know what you’re doing.” Click. She hung up.

  Although it was a cold and windy day, I managed a jog in Monument Valley Park over the noon hour, grabbed a sandwich and was back at my desk by 1:30. I was just starting to look online at regulatory filings by Merchants Bank in an effort to determine who its lawyers might be when Stephanie called me on the office intercom to tell me Wiley Monfort was on the phone, wanting to talk to me about the Turnbull and Williston matter.

  Wiley was a classmate of mine thirty-plus years ago at Boalt Hall, the University of California’s law school in Berkley. While I was busy falling in love and getting married, and exploring the California coast north of San Francisco looking for new places to surf, Wiley was busy studying and working on the staff of the law review. When he graduated first in our class, he had multiple job offers from San Francisco’s best law firms. He chose Womack and Jeffers, a firm that represented many of the West Coast’s largest banks and publicly traded companies but also had an active pro-bono practice, taking on both civil and criminal cases for people with little or no money who needed legal help. This pro-bono activity occasionally irritated the firm’s paying, and largely conservative, clients, some of whom thought poor people had chosen to be poor and needed to shape up and fend for themselves. But the pro-bono activity allowed Womack and Jeffers to attract and retain the best and brightest legal talent around and the firm made it clear to its paying clients that, if they wanted access to this talent, they had to accept the firm’s dedication to helping people who couldn’t pay and were sometimes identified with unpopular causes. Wiley and I had stayed in casual touch since law school. He would call me a couple of times a year when he had a client with a Colorado-related matter. I in turn referred to him anyone I ran into needing assistance with a California-related matter. Wiley was now a senior partner at Womack and Jeffers, a member of its management committee and head of its financial institutions practice group. He also headed up the pro-bono practice.

  “Wiley, how are you? How are things in my favorite overpriced city?”

  “Hello McConnell. I’m good. San Francisco is good, unless you want to live there. Then, no one can afford it. I live in Redwood City and take BART to work, at least when its employees aren’t on strike. Hey, I’m calling because we represent Merchants Bank and I got wind that you are representing Front Street Bank in this latest counterfeit cashiers check mess. Gave me an excuse to see how you’re doing.”

  “It’s great that you called. I was just starting to fumble around on the Internet trying to see if I could find out who Merchants Bank uses as its lawyers. Front Street Bank and the Fed, and now Turnbull and Williston, have agreed to a forty-three day standstill agreement—through December 30--while we take our best shot at trying to track down the crooks and get back the missing money. I was hoping Merchants Bank would join in that agreement.”

  “We’ll be glad to do that. Last year, Merchants Bank was on the other end of one of these frauds, as the depositary bank. And it learned its lesson about the cost of finger pointing early on in the proceedings. What’s your game plan?”

  “Our client, an
d the Fed in a backdoor sort of way, have agreed to share the cost of having a private investigator dig into this to see if we can get a lead on who the perpetrators are. Neither Front Street Bank nor the Fed wants the FBI or the Justice Department or the Comptroller of the Currency involved since, once they show up on the scene, the bad guys will burrow underground like prairie dogs seeing a coyote.”

  “Do you have an investigator in mind?”

  “Yes, actually. I’ve been in touch with an investigator I’ve used in the past who likes to be known only as Ed and who has done great work for me on at least three previous occasions.”

  “Ah, yes, Ed. We know him well. He has helped our firm resolve at least half a dozen bank fraud cases that seemed impossible to solve.”

  “Can I get Merchants Bank to agree to cover a third of his charges up to a total of $10,000—meaning $3,000 and change for your client? Front Street Bank and the Fed will cover the other two-thirds. I tried to get Turnbull and Williston to share in the cost but, as you might imagine, they are locked into the belief that their bank should have protected them from this fraud. Getting them to agree not to sue for six weeks was the best I could do.”

  “Of course, Jack. Merchants Bank will stand behind a third of Ed’s fees. Just send the invoice to me and I’ll take care of it. Anything else I can do to help?”

  “Not at the moment, but I’m sure there will be down the road since this whole thing seems to have a Bay Area spin to it. I’m going to draft up a little agreement among and between the finger pointers confirming the forty-three day litigation standstill. I’ll email you a copy of that. Any suggestions for improvement would be welcomed and appreciated. But on to other topics, how are your kids doing and your wife?”

  “My wife is great. She’s on the board of directors of the Peninsula Humane Society and that keeps her busy, and keeps our house full of foster care animals of all shapes and sizes. At the moment, we’re taking care of a litter of guinea pigs. The kids are great. Sophia, my youngest, will graduate from UCLA medical school in the spring. This is pretty amazing for someone who had to spend two years in rehab thanks to a cocaine addition. Her mother wants her to be a plastic surgeon so she can tend to the unfortunate consequences of aging. I’ve told her she should go into dermatology, which is now a goldmine specialty as our generation moves into the skin cancer part of our lives. But Sophia wants to be a family practice doc, helping ordinary people navigate the world’s most screwed up health care system. That’s probably because I’ve paid for all of her education so she won’t be entering the workforce saddled with six figures worth of education-related debt like most of her peers. This may be selfish on my part, but I’m looking forward to the end of her education since I’m still driving around in a ten year old Honda that’s on its last legs. My partners at the law firm don’t want to be seen with me when it’s my turn to drive somewhere.”

  “And what about Justin? What’s he up to?”

  “As you may recall, he had his heart set on a career in sports journalism, but then he discovered flying. So, he worked his way up the ladder of pilot credentials, at considerable expense to me, and is now an employee of Wal-Mart, as first officer on one of its corporate jets. Although he’s not big on having to live in Arkansas, he loves the job. His wife is expecting their first child later this year, meaning I’ll be joining the grandfather ranks. It’s pretty scary how time speeds by. I try not to think about it, but something seems to remind me every day that, based on family history, I’m now in the last third of my life. But what’s new out there, other than wild fires and floods?”

  “The big news, I suppose, is that I’ve let a woman into my life.”

  “Whoa, Jack, the last time we broached this subject, over one too many beers at a Giants/Rockies game as I recall, you were never going down that path again, after your divorce from Teresa.”

  “Well, Veronica Stailey changed all that. She’s a computer specialist with the Fed and she snuck up on me while we were working on a case together last year. Even Fletcher thinks she’s OK, and he’s very protective of his position as top dog.”

  “Do you still have that old mongrel? He must be twenty years old by now.”

  “He’s eleven—soon to be twelve--based on the best guess of the people at the animal shelter where I rescued him on the day he was scheduled for euthanasia. He’s losing his hearing but not his appetite and he can still catch a low hanging Frisbee.”

  “So where does this Veronica Stailey live?”

  “She got the Fed to relocate her to Denver from Washington, D.C., meaning she’s just up the road.”

  “I think that’s all great news, Jack. You need somebody to take care of you in your old age. Trout Unlimited isn’t going to do that”

  “Speak for yourself Wiley.”

  “I am. I’ve got Mary Beth and she knows that’s part of her job description.”

  “I’ll get you a draft of the standstill agreement first thing next week and I’ll report back when Ed has something to tell us.”

  “Perfect. Take care Jack. It’s good to have a chance to work with you. And my best regards to Veronica Stailey. I look forward to meeting her.”

  Before calling it a day, I sent an email to Ed telling him that Front Street Bank, Merchants Bank and the Fed would cover his fees up to the $10,000 initial limit we had discussed, and that Turnbull and Williston, although unwilling to share in the fees, had at least agreed to his engagement.

  Chapter 6

  Veronica pulled into my driveway at 6:45 p.m., slowed down on her trip from Denver to Colorado Springs by a multi-car accident on Monument Hill, a treacherous stretch of Interstate 25 that climbs to 7,352 feet, often resulting in a sudden change in road surface conditions from merely wet to black ice. Fletcher and I went out to meet her. She looked tired but she was still the most beautiful woman I had ever known. Five foot seven. Short brown hair (with only limited color enhancement). Sparkling green eyes. One hundred thirty well proportioned pounds. (This is only a guess since the real number is a closely guarded secret.)

  Veronica gave me a long hug and a kiss and Fletcher an ear rub. I grabbed her suitcase out of the back seat—as usual, large enough for a world cruise and not just a weekend stay over—and carried it into the house.

  I had a fire going in my fireplace and a glass of better-than-the-house-brand pinot noir ready for Veronica.

  “Perfect. Thanks. It’s been a long week. What’s for dinner?”

  “Crab cakes imported from Alaska, salad and French bread. Dessert is negotiable.”

  “Do I have time for a quick shower before dinner?”

  “Of course, but your idea of quick and mine have been known to differ.”

  “I’m hungry. We’ll play by your rules tonight.”

  “Does that include after dinner?”

  “Negotiable.”

  “OK. You’ve got ten minutes for your shower.”

  “That’s all your hot water heater is good for anyway.”

  “Veronica, it’s on my list of the upgrades to my house you have recommended. If you don’t risk scalding yourself, you’ll be fine.”

  And with that, she took off her sweater, making sure I noticed, gave me a smile, and headed for the master bathroom, which I had vacated in anticipation of her arrival, knowing counter space would be in short supply.

  Veronica emerged from the bathroom twelve minutes later, wearing only a long sleeve work shirt of mine and her underwear. She looked nicely pink and smelled of exotic soap and Shalimar. Even Fletcher, now tucked into his pooch pillow and half asleep, seemed to notice. He put his nose in the air, took a long sniff, and gave a wag.

  “Perfect timing. Dinner is served. So what made this a long week, other than Turnbull and Williston?”

  “Our friends at S.O.S. are on the move again in South America. They seem to have a cell developing in Chile, where the banking system is still pretty primitive and vulnerable to a cyber attack. Fortunately, another member of the Fed’s computer st
aff is fluent in Spanish and Portuguese, so he’s been given the job of going down there. I, however, am in the role of coach.”

  “Anything new on the Turnbull and Williston front?”

  “No. My boss, the president/CEO of the Denver Federal Reserve Bank, has been in touch with Wally Kartz back in Washington and knows vaguely what we’re up to with Ed. Also, Wally has given Sam Donaldson, the head of our legal department in D.C., a more detailed briefing. Sam’s a good guy. He’s close enough to retirement that he can ignore the politics at the Fed and do what he thinks is right. I’m sure you’ll be talking with him before this is over. Otherwise, this is a matter that doesn’t get discussed. We don’t want the FBI or the Justice Department or the Comptroller to get wind of the Turnbull and Williston situation or, as you know, they’ll come storming onto the stage in a way that will doom our chances for tracking down the bad guys and finding the money. Jack, these crab cakes are delicious. Can I have some more wine? Anything new on your end?”

  “Yes, actually. It turns out a San Francisco lawyer I know from law school named Wiley Monfort is representing Merchants Bank and he’s on board with the standstill agreement and paying a third of Ed’s initial fees. He knows Ed from prior bank fraud engagements.”

  “And what about Front Street Bank? Has Mike Lawrence made any big decisions about this case?”

  “Veronica, I can’t talk about that. Attorney/client privilege. You know the rules.”

  “Yes, but don’t you want your way with me?”

  “Unfair. Go warm up the bed while I clean up the kitchen and take Fletcher out for a visit to the fire hydrant.”

  With a pretend pout, Veronica did as instructed. Fletcher, despite the now cold temperature outside, took his time finding just the right spot at which to reassert his dominion over our street’s most strategically important canine stopping place. When I made it into bed, which smelled wonderfully of soap and Shalimar, Veronica was already asleep, but she responded nicely to a kiss on the neck and all conditions to my having my way with her were waived. Or maybe she had her way with me. In all events, the next thing I knew it was dawn and Fletcher was standing by my side of the bed with a shoe in his mouth, an indication he thought it was time for breakfast.