Fraudulent Transfers Page 8

  “Just as a heads up for you, we’re now, on December 2, at day fifteen of our standstill agreement with Turnbull and Williston.”

  “Right. I’ve also been keeping track of that. The good news is we’ve still got twenty-eight days to get the money back in their account.”

  Chapter 16

  Saturday afternoon, I went back home from the office, woke up Fletcher from his afternoon nap on the sofa (where he wasn’t supposed to be), helped him into the back of my SUV and headed for Denver International Airport to pick up Veronica. Veronica’s flight was, remarkably, ten minutes early and I hurried to the baggage claim area to meet her. As usual, however, Veronica was not the first to arrive at the baggage carousel assigned to her flight, or the hundredth, a stop at a lady’s room for makeup remediation having apparently been necessary. But, when she did arrive, she looked wonderful and gave me a kiss worth waiting for. Since her bags—two of them--had by then already been delivered to the carousel, we were quickly on our way to the parking garage and Veronica’s loft in Lo-Do. When Fletcher saw Veronica, he went into a nine-on-a-scale-of-ten tail wag and gave her a big lick on her cheek. She in turn gave him a rub on his sweet spot behind his ears.

  The loft Veronica ended up renting when she moved from the Washington, DC area to Denver last summer was, to my delight (and at my suggestion), a mere six blocks from Coors Field, although out of the way of the traffic and late night partying along Blake Street. We took I-70 from the airport into Denver, turned onto I-25 southbound at the infamous I-25/I-70 interchange known locally as the Mousetrap, and ducked off I-25 at the Speer Boulevard exit. The traffic wasn’t as bad as I had expected and we were safely inside Veronica’s parking garage by 7:15 p.m.

  This was Fletcher’s first trip to Veronica’s loft and our immediate task after arriving in the parking garage was to take him down the street to the neighborhood park, which serves as the community bathroom for all dogs in an eight block area. Fletcher, in his eleven-plus years of life, had never been to a place with this many dog-created smells and he had difficulty finding a location where he thought he could effectively claim territory. He eventually settled on a spot next to the swing set and we were then able to return to my SUV, pick up Veronica’s bags and the groceries and wine I had brought along in order to make dinner, and take the elevator up to Veronica’s loft. The elevator ride, a rare experience for Fletcher, caused him to give me one of his “where are you taking me?” looks, usually reserved for trips to the vet. Once inside the loft, however, Fletcher gave himself a quick tour, devoured his dinner in record time, jumped up on the sofa in the living room (which, fortunately, was black), and settled in.

  I gave Veronica a glass of the Napa Valley merlot I had purchased for the occasion and told her I was planning to whip up a salad, with halibut fillets grilled on her deck as the pièce de résistance. She in turn said she would be in charge of dessert. I told her I had noticed the large quantity of chocolate ice cream she had in her freezer. She said we could have that for dessert if I wanted, but it wasn’t what she had in mind.

  Although it was cold on the deck, the halibut came out nicely and dinner was good. Over dinner, and a start on a second bottle of merlot, Veronica told me what she could about her staff meetings the past two days at Fed headquarters in Washington. The Fed was being overwhelmed by the need to draft regulations for all the new laws Congress had passed in an effort to avoid another economic meltdown of the kind that tanked the U.S. economy in 2008 and 2009. These regulations were all controversial and elected members of Congress of every shape and size, and political persuasion, were showing up at Fed headquarters on a daily basis offering “suggestions” as to what these regulations should be trying to achieve. Fed officials in charge of the drafting operation were regularly reminded by these visitors that approval of the Fed’s latest budget request was contingent on a happy Congress.

  The Fed was also continuing to worry about the security of its FedWire system, which moves trillions of dollars around the country every day in wire transfer transactions based largely on telephone calls from sending banks to receiving banks, with user names and passwords as the primary means of security. The Fed was similarly worried about the security of its digital imaging check clearing system, whereby depositary banks collect the funds evidenced by checks written on other banks. The Fed’s part of this system was encrypted and secure, but the systems of many banks using the Fed’s check clearing technology were behind the times and vulnerable to hackers. This in turn created a risk that the entire check clearing system could be sabotaged. Veronica said she would be traveling a good bit during the next few months helping smaller banks update the security of their computer systems. She generally liked working with the staff of these banks, but wasn’t looking forward to the traveling she would have to do. Nor was I.

  Veronica asked me about new developments concerning the Turnbull and Williston fraud investigation. I told her Ed had possibly make progress leading to the identity of Mr. X, but I didn’t go into the details. We should know more, I said, within the next few days.

  Although dinner, highlighted by the grilled halibut from Alaska, was good, dessert, highlighted by a new product line from Victoria’s Secret, was better.

  Sunday morning was a relaxing time. After I hustled Fletcher over to the neighborhood park for a bathroom stop and a mandatory pet waste clean up, Veronica and I lingered over coffee (me) and tea (her); read the Sunday Denver Post; and checked emails. Early afternoon, we visited the Denver Art Museum, which was hosting a traveling exhibit focusing on the history of surrealism. This was an art genre that had first appealed to me while I was an undergraduate at Long Beach State. (This may have resulted from the fact that I, and most of the other students I hung out with, were, while otherwise attending to our studies, obtaining an in-depth education in pharmacology.)

  The Denver Art Museum exhibit was awesome, starting out with a couple of fifteenth century paintings by Hieronimus Bosch who, back then, must have been considered an agent of the devil. There were paintings by Max Ernst, René Magritte, Yves Tanguy, Giorgio de Chirico and Salvador Dali, among others. The exhibit concluded with several paintings by contemporary artists who seemed to be reinventing the surrealist style—realism applied to imaginary objects. These were juxtaposed with a half dozen photographs of deep space taken by the Hubble telescope. These photographs fit right in with other works in the exhibit.

  After our trip to the museum, Veronica and I took Fletcher for a long walk around City Park. The lake was by now partially frozen over and there were patches of snow in areas of the park not being reached by the sun. As was normal this time of year, a large portion of the Canadian geese population had decided to leave cold and dark Canada behind and spend the winter in City Park. Fletcher, although on his leash, tried to chase one of them, but when the bird held its ground and took a hissing, beak-wide-open, lunge at him, he quickly retreated to a spot between Veronica and me.

  After our City Park walk, we left Fletcher in my truck (which was fully equipped with blankets, pooch pillow and water bowl) and had a late lunch at a nearby soup and salad restaurant along Colfax Avenue. I then took Veronica back to her loft, enjoyed a long hug and a kiss, and headed south along I-25 to Colorado Springs. The Broncos were playing a Sunday night game and northbound traffic was slow going all the way from Castle Rock into Denver. The southbound traffic was, however, moving along at the seventy-five mile per hour speed limit.

  Just as I was cresting Monument Hill, a call came in on my cell phone. Since my SUV pre-dates hands free telephone technology and has a manual transmission, I normally don’t use the cell phone when I’m driving. However, I could see this call was coming in from one of the many numbers used by Ed, so I picked up the phone and managed to hit the answer button without triggering a disconnect—or an accident.

  “McConnell here,” I said.

  “Hi Jack,” Ed replied. “I had some good luck yesterday and I think I know who Mr. X is, so I wanted to give
you a call. The FedEx video camera did catch a glimpse of him that I was able to blow up as a still-frame eight by ten photograph. You can’t see his face because it’s hidden behind a Vancouver Canucks baseball hat, but you can approximate his height and weight. I’ve put him at five foot ten inches and two hundred pounds, plus or minus. He has a muscular-looking neck, so I think that two hundred pounds has been well conditioned.”

  “And what about Sonny’s Pizza Palace?”

  “Good food. You should go there some time. It’s a small place and Sonny is the owner—Sonny Chung. He’s Vietnamese, I think, and he runs the restaurant pretty much by himself, with a little help from his wife. When I went there, as you know I like to do, I had on a disguise that bulked up my weight a good bit, changed my hair color and had me wearing glasses. I told Sonny I worked for the California unclaimed property department and showed him a badge with the California state seal on its face, and a picture of me in my disguise. I told him I was trying to track down a man named Roberto Garcia that my department thought might be living in this area. Roberto Garcia had been named as an heir in a will but when he couldn’t be found, the money came to my department as unclaimed property. I showed Sonny the picture of Mr. X and told him the department thought this might be the missing heir. Sonny remembered the guy coming into his restaurant on three occasions over a period of a couple of weeks. He remembers him because in each case he ordered an anchovy and pepperoni pizza. Sonny, twenty years in the pizza business, said he had never seen that before. He also remembered the Vancouver Canucks baseball cap. You don’t see many of those in San Francisco, he said. Sonny told me Mr. X had a noticeable scar on his right cheek. A couple of inches long. Maybe from a cut or a surgery. It gave Mr. X a hard look. Sonny said the man didn’t talk much, didn’t smile, and seemed to be in a hurry. He was, on each of his visits, wearing a blue knee length rain coat, dark colored chinos and workout shoes with bright orange laces. Sonny wasn’t sure why, but he thought Mr. X was on foot and didn’t have a vehicle parked outside the restaurant. He estimated his age at mid-forties. He said it had been maybe two or three weeks since the man was last in the restaurant.”

  “So I take it the FedEx video and Sonny’s description has been enough to eliminate two of the three people on your voice recognition match list.”

  “Yes. Only one of the three has a description anywhere close to this. Mr. X’s name is …” and right then, as I neared the end of my descent down the south side of Monument Hill, the call dropped. I tried to use the call back feature on my phone, but I couldn’t read the buttons without my glasses, which were in my briefcase in the back of my truck, currently being used by Fletcher as a pillow. I drove on for a ways, thinking Ed would call back and when he didn’t I pulled off at the exit for the north entrance to the Air Force Academy, found my glasses and performed a perfectly executed call back command--leading to a recorded message telling me the number I was calling was no longer in service.

  “Damn,” I said in a voice loud enough to wake up Fletcher. Ed, I thought, must be using one of his encrypted, untraceable, bounce it off the moon or whatever phone connections. Not knowing what else to do, I got back on I-25 and drove the rest of the way home, hoping Ed would try to call me there in a little while.

  And he did. He called on my home phone thirty minutes or so after Fletcher and I pulled into my driveway, giving me time to feed Fletcher his dinner and pour myself a glass of wine.

  “Hi Ed. Sorry about that. Cell phone connections get squirrely around Monument Hill, which is where I was when you called.”

  “Not a problem. I didn’t call you back because sometimes a drop like that means a cell phone call is being recorded. Anyway, I was about to tell you that Mr. X’s real name is Tomas Padilla. He was born in El Salvador but when he was three, his parents immigrated to Canada and settled in Vancouver, giving him dual citizenship—El Salvadoran and Canadian. His father was a highly educated and well respected railroad design and construction engineer, who had made a name for himself helping El Salvador build a state of the art rail system to support the country’s once booming coffee industry. Padilla senior came to Canada as an employee of the Canadian Pacific Railroad and ably assisted that company for many years designing and building rail systems in remote areas servicing Canada’s oil and gas industry.”

  “When was that?” I asked, trying to keep track of the chronology.

  “The family moved to Vancouver in the mid 1970’s. Padilla’s father and mother, and his only sibling, a younger sister, all died in an automobile accident on the Lions Gate Bridge in 1995. Padilla attended UCLA and received a degree in banking and finance in 1992. After graduation, he quickly found a job with Bank of America, qualifying him for a U.S. green card—permanent residence status. He rose through the ranks at Bank of America and, in 2002, he was promoted to branch manager and was put in charge of a B of A branch in San Clemente. He apparently performed well there until 2004, when he turned to the dark side.”

  “And what happened then?”

  “Starting in late 2004, he began embezzling from the bank. This went on over an eighteen month period and ultimately cost the bank some $2 million. He put together a dozen or so bogus corporations and made loans to them. The loan files were thoroughly documented and never raised a suspicion with loan committees, internal auditors, outside auditors or bank examiners. In the style of a Ponzi scheme, or maybe a check kite, he would use the proceeds from new loans to make payments on earlier loans. Then, after he made the last of these loans—for $2 million and some change—he pocketed the money, moved it out of the country through a series of wire transfers, and vanished. The FBI and the Comptroller of the Currency, and Bank of America’s in-house investigators, have been looking for him every since, but to no avail. Fortunately, Bank of America had recordings of phone conversations between Padilla and bank customers, and that’s how samples of his voice made it into the data base now being used by Forensic Filtering.”

  “Anything else?”

  “My dark side sources tell me Padilla may lately have been in business as an independent contractor, available for hire by various criminal types operating in an area from roughly San Jose to Vancouver needing help from someone who knows his way around the banking world. But I haven’t been able to confirm this and I don’t have any further details.”

  “Ed, that’s amazing work. There must be a couple of home run hours in there somewhere.”

  “Not really. Finding out the identity of Mr. X doesn’t do us much good. Even if we tracked him down, that’s not going to get us the money back. He undoubtedly received a commission for his part in the Turnbull and Williston fraud, but that money will have been spent already or tucked away someplace where we will never find it. What we need to do next is to find out who Padilla’s been working for.”

  “And how do you propose to do that?”

  “Well, I have a plan,” Ed said and he then proceeded to explain his plan to me, in considerable detail. I listened, poured myself another glass of wine, and continued to listen.

  After Ed completed his description of the plan and there was a noticeable silence, he asked: “Jack, are you still there?”

  “Yes. Sorry Ed. I heard every word you said. Are you sure this is, like, safe?” Ed told me that, in his line of work at least, he felt it was. I wasn’t so sure. Before disconnecting, Ed said the documents and e-ticket flight confirmations I would need to help implement his plan would be delivered by FedEx on Wednesday.

  Chapter 17

  On Monday morning, I put in calls to Veronica, Mike Lawrence, Josephine Houghton and Wiley Monfort informing them that Ed had, tentatively at least, identified Mr. X as a man named Tomas Padilla. I told them some, but not all, of what Ed had done to identify Padilla. I told them some, but not all, of what he had learned about Padilla’s background and his recent activities. I told them the next step in the investigation would be to try to find out who Padilla had been working for when the counterfeit cashiers check fraud had b
een perpetrated on Turnbull and Williston. I didn’t tell them what Ed’s plan was for that part of the investigation and no one asked--except Veronica. I told her I couldn’t talk about it, generating a telephonic pout, but that I should be able to give her more information sometime next week. I thought about calling Sam Davidson, the in-house lawyer at the Fed in Washington who had at least some limited knowledge about the decision to keep the Turnbull and Williston investigation private, and out of the hands of the FBI and the Justice Department and the Comptroller of the Currency. I decided, however, it would be better to let Veronica brief Davidson when she felt it was appropriate to do so.

  I next told Stephanie I was going to be out of town Thursday and Friday, and possibly through Monday of next week, and that she needed to reschedule the appointments I had for those days. She informed me, as usual, that this would generate unhappiness among clients who regularly found their appointments being rescheduled due, mostly, to calendar conflicts involving fishing.

  I then made arrangements for Fletcher to have a multi-day sleepover at the home of his friend Buttercup, a slightly neurotic but good looking Irish setter who lived down the street from us. And I sent Cooper a text message asking him to look after my house starting on Thursday, and to leave the beer in my refrigerator alone if he wanted to get paid.

  Monday afternoon, I received by hand delivery Marvin Lang’s written opinion concerning the fairness of the transaction between Olivia Marchant and her husband, Robert, whereby the two family businesses were split up, with Robert ending up owning all of Mountain View Development and Olivia owning all of Mountain View Property Management. Marvin’s opinion, well supported with appraisal information relevant to the time of the transaction and containing a clear and concise business valuation analysis, was that Robert’s interest in Mountain View Property Management, which he transferred to Olivia, was actually worth less than Olivia’s interest in Mountain View Development, which she transferred to Robert. So, there was no fraudulent transfer here intended to put assets out of the reach of Robert’s creditors. Rather, Robert’s financial condition had deteriorated because of events occurring after the business split up.