Fraudulent Transfers Page 9

  With this opinion in hand, I drafted and had Stephanie file a motion for a preliminary injunction wherein I asked Judge Melanie Cloverton to order Piranha Partners to cease and desist from all further efforts to collect from Olivia Marchant a debt owed only by Robert Marchant. I knew I was stretching the Rules of Civil Procedure a bit by filing this motion but it was the only strategy I could think of that would allow for a quick ruling on the most important issue in the case, and hopefully stop the litigation before it bogged down into an expensive and lengthy affair. As soon as I knew the motion had been filed and would shortly thereafter be served electronically on Thomas Stringer, Piranha Partners’ lawyer, I sent Stringer an email with Marvin Lang’s opinion attached. I told Stringer in the email we would withdraw the counterclaim for abuse of process and intentional infliction of emotion distress if his client would agree to dismiss its claim against Olivia and her company.

  Stringer called me Tuesday morning and, in his usual diplomatic way, told me to go to hell, this was not a proper case for a preliminary injunction, see you in court buddy, etc. I thanked him for calling and letting me know his position on the matter. I then instructed Stephanie to schedule the motion for a half-day hearing in front of Judge Cloverton as soon as possible after Stringer’s fifteen day period in which to respond to the motion would expire.

  Tuesday afternoon, following my instructions from Ed, I went to see Miles, my barber, and had him give me a marine drill sergeant-type haircut.

  “Jack, what’s going on here?” Miles asked. “For a guy in his late fifties, you have nice hair. Why do you want me to give you the kind of haircut now that you’ll need in a few more years when your hair is mostly gone anyway?”

  “It’s time for a new look, Miles. Just do as instructed and let’s not get into life coaching today. Let’s talk about the Broncos or the Nuggets instead.”

  My next stop was an optical shop down the street a few blocks. Again following instructions from Ed, I bought a pair of photo sensitive sunglasses having a slightly reflective outside surface and a pinkish blue tint. (Note to Ed: these things are expensive.)

  When Stephanie asked me the next morning, Wednesday, about my haircut and why I hadn’t been shaving for the last few days (another instruction from Ed), I told her I was merely trying to conform to the latest fashion trends in California since that’s where I was heading. She gave me a look suggesting skepticism about my answer.

  Ed’s FedEx package arrived mid-afternoon on Wednesday which, I noticed on my calendar, was Pearl Harbor Day. Inside was an itinerary, with a confirmation number for an e-ticket, for me to travel one way from Denver International Airport to Phoenix on Frontier Airlines. There was a second itinerary, with a confirmation number for an e-ticket, for a Jonathan Swisher to fly from Phoenix to San Francisco on Southwest Airlines. The flight from DIA to PHX was scheduled to leave Denver at 9:10 Thursday morning, arriving in Phoenix two-plus hours later. The flight from PHX to SFO was scheduled to leave Phoenix at 12:40 p.m., arriving in San Francisco at 2:15. A note in the FedEx envelope, from someone named Albert Campbell, told me what I needed to do to get boarding passes for the Denver to Phoenix and Phoenix to San Francisco flights, and that he, Albert Campbell, would meet me, Jonathan Swisher, in San Francisco at the baggage carousel assigned to the flight from Phoenix. Also enclosed in the FedEx envelope was an Arizona driver’s license and a passport for Jonathan Swisher. They both had an issue date of nine years earlier and an expiration date a year down the road. They both had a picture of me, looking nine years younger, with very short hair, several days of stubble and glasses having a slight pinkish blue tint.

  Chapter 18

  Thursday morning I headed to DIA in plenty of time to get parked in one of the cheaper outdoor lots and board the flight to Phoenix. Again following Ed’s instructions, I was wearing khaki colored chinos, a sky blue shirt, no tie and a dark blue blazer. Both the Denver to Phoenix and Phoenix to San Francisco flights were on time. When I arrived in Phoenix, I exited the security area as Jack McConnell and then re-entered as Jonathan Swisher. I had no problem going through security in either Denver or Phoenix, although I’m convinced the TSA agent in Phoenix gave me an extra hard look. That’s probably because, when I presented the agent with Jonathan Swisher’s drivers license, I was as nervous as a pitcher making his first major league appearance, with the bases loaded, nobody out and the game on the line.

  When I arrived at the baggage carousel in San Francisco assigned to my flight, I looked around for Ed but couldn’t find him. So, I sat down on one of the benches and started to pull out a copy of the Wall Street Journal from my briefcase. I then heard a man standing next to me whom I had never seen before say: “Hello Jonathan. Welcome to San Francisco.”

  This, of course, was Ed, now dba Albert Campbell, and now with blond hair (his real hair is black) and a thin blond moustache. The real Ed—at five foot six and one hundred fifty well conditioned pounds--was also slimmer than the man next to me who, with the padding Ed had included in his disguise, looked to weigh some fifteen pounds more than that. Ed dba Albert was wearing an expensive-looking dark blue suit, a pinpoint cotton white shirt with a starched spread collar, and a yellow tie with pink diagonal stripes. His highly polished shoes had elevated heels that gave him a touch of extra height.

  “Hmm, hello Ed, or rather Albert,” I said, shaking his hand. “I don’t think I’ve ever seen you wearing a suit before, even as part of a disguise.”

  “Duty calls. I have my car out in the garage. Do we need to wait for any luggage?”

  “No. I just have my carry-on bag, as instructed. Plus, I doubt Mike Lawrence would approve a checked-bag fee when I submit my expense report.”

  “I have us booked at the La Quinta Inn in Millbrae. We’ll take BART when we go into the City for our meetings this afternoon. Driving and parking in San Francisco is pretty much impossible these days. The La Quinta is within walking distance of the BART terminal.”

  Ed’s car was the hot rod Honda Civic he tows behind his motor home. This car started life as a regular, boring Honda Civic but a teenager in Los Angeles that Ed helped get out of trouble with the police had, in appreciation for Ed’s assistance, added a turbocharger, stiffer springs and shocks and lower profile tires, and made other performance enhancing modifications. This car could now give a Porsche Cayman a run for its money.

  After checking in at the Millbrae La Quinta, and over a quick lunch at a nearby Wendy’s restaurant, Ed told me more about the plan. First, concerning our identities, the real Jonathan Swisher was a divorced and single Phoenix lawyer who had been disbarred three years ago for trying to bribe a judge. His practice, before he was disbarred, mostly involved representing white collar criminals accused of financial crimes. Swisher was roughly my age and had my build, at six foot one and one hundred eighty pounds. He always wore his hair short, liked to present an unshaved look, and was usually seen wearing glasses of the kind I had just purchased. After his disbarment, Swisher left the Phoenix area for parts unknown. Anyone checking up on him would be told no one had seen or heard from him for at least a couple of years.

  The real Albert Campbell had spent two years in a minimum security federal prison in Rhode Island after being convicted of illegally importing human grown hormones into the United States. His sentence was five years, but he had been released after two years when his case was overturned by the Circuit Court of Appeals on a technicality. It seems that some of the evidence used by the Drug Enforcement Agency to convict Campbell had been obtained in an illegal search. Without that evidence, the U.S. attorney’s office had no case, so there was no retrial. After his release, ten months ago, Campbell, like Swisher, had also disappeared, present whereabouts unknown. And, just as my current appearance roughly matched Swisher’s, Ed’s current appearance roughly matched Campbell’s.

  “So who, exactly, are we meeting with, and why?” I asked Ed.

  “We have two meetings scheduled this afternoon. The first is with a guy who, in
these circles, goes by the name of Peter Bordeaux. The second is with a guy who goes by the name of Roland Kwan. As I told you on the phone, our working theory is that Tomas Padilla, when he pulled off the counterfeit cashiers check fraud at Turnbull and Williston, was working for an organization whose real business is money laundering. This counterfeit cashiers check stuff is merely a sideline designed to amuse and entertain, and help pay some overhead. Money laundering is a far more profitable enterprise, with the commissions paid ranging anywhere from fifteen to thirty percent depending on the amount and risk involved, and with hundreds of millions of dollars a year moving through the system. The money launderers we’re talking about don’t commit the crimes that create the money—mostly narcotics, prostitution and gambling. The people who commit those crimes are the money launderers’ clients. Because money laundering is one step removed from the hard crimes that generate the money, and because it lends itself to greater control by the criminals, it’s perceived in the criminal world as involving less risk. This makes it attractive to really smart crooks, as opposed to crooks that aren’t very smart and have to rely on being thugs. Money laundering is kind of at the pinnacle of the criminal professions, right up there with cyber crimes and Medicare fraud.”

  “Swell. So we’re up against the best and the brightest of the criminal world. But, again, why two meetings, and what are we trying to accomplish?”

  “What we’re trying to accomplish is to find out who Padilla was working for and learn as much as we can about that organization. We’re having two meetings because Albert Campbell is here in San Francisco to do some comparison shopping. Albert Campbell is now in the business of selling highly sophisticated and nearly impossible to detect performance enhancing drugs, and some other compounded drugs that are sold to women who don’t like the idea of getting and looking older.”

  “I assume the sale of these drugs is illegal, right?”

  “Yes. Campell’s most important clients are professional athletes who are willing to take a chance on using PED’s to increase their incomes. Think about baseball. Getting your fastball up from ninety to one hundred miles an hour is worth millions of dollars a year. Same thing if you get your home run production up from ten to thirty.”

  “What else do we know about money laundering?”

  “Money laundering is a highly competitive business. At the moment, there are two and maybe three organizations in the San Francisco area that are competing for the business of people who need to move money generated by illegal activity out of the country. The guys we are meeting with are marketing agents—commissioned salesmen, if you will--for two of those organizations.”

  “Since I’m a little new at this Ed, or rather Albert, what, exactly, am I supposed to be doing to further this mission?”

  “Act like you’re my lawyer, ask probing questions if you can think of any, frown a lot, and don’t call me Ed.”

  Chapter 19

  After our lunch at Wendy’s, we boarded a BART train in Millbrae and rode it to the Embarcadero station. From there, we took a cab to the foot of Telegraph Hill. Our first meeting, with Peter Bordeaux, was to take place at the base of Coit Tower, on the summit of Telegraph Hill. As often happens in November in San Francisco, today was a sunny, blue sky day. No wind. No fog. Temperature in the mid-sixties. The walk up Telegraph Hill felt good after being jammed into an airplane most of the day. (On both my flights, the passenger in front of me had immediately put his seat back in full recline position and left it there for the duration of the trip.) Since I was coming from 6,000 feet down to sea level, the ascent up Telegraph Hill to Coit Tower was easy for me. Ed dba Albert, although in good shape, had no such change in altitude to help him and did some huffing and puffing.

  As had been arranged, Peter Bordeaux was sitting on a bench on the west side of Coit Tower, feeding popcorn to a polite assembly of pigeons and a couple of not so polite squirrels. Bordeaux was nicely dressed in gray flannel pants, highly polished brown loafers, a pale yellow shirt, a dark blue tie and a tweed sport coat. He had medium length brown hair, no beard or mustache and appeared to be in his mid-to-late forties. He looked far more like a life insurance salesman than a criminal. It occurred to me, however, that I had met very few real criminals in my life and that my expectations for criminal appearance were based largely on movies and television.

  Peter Bordeaux stood and held out his hand as we approached.

  “Ah, Mr. Campbell,” he said with a slight French Canadian accent. “You are right on time. Thanks for accommodating my request that we meet at this spot. This is one of my favorite places in San Francisco and our meeting gave me a chance to come here today.”

  “This is a special place,” Ed said. “I try to come here myself when I have occasion to be in San Francisco. But let me introduce Jonathan Swisher. He is my lawyer and business partner. I learned—the hard way—that having a lawyer involved in my line of work is pretty much essential.”

  “You briefly told me on the phone what your line of work is, but why don’t we start there and have you tell me again.”

  “Certainly. I’m in the compounding pharmacy business. I manufacture pharmaceutical products as ordered by, and that are customized to the needs of, my customers. My customers are for the most part professional athletes who seek to achieve the highest level of performance in their chosen sport. I also have as clients several spas around the country that offer services to affluent women who believe these services will enhance, or at least preserve, their appearance.”

  “And if I may ask, what do you expect in your business by way of annual gross and net income?”

  “That, of course, can vary from year to year, but I believe a conservative estimate would be $30 million gross and $15 million net. Acquiring the raw materials I need for my products, and engaging the services of skilled and discrete technicians who can do the necessary compounding, are the two largest costs of my enterprise. Raw material costs, in particular, can fluctuate greatly. But tell me a bit more about your business, Mr. Bordeaux.”

  “Ah yes. But first, do you mind if we start our walk back down the hill? The sun will be setting soon and it will quickly become chilly up here at the top. As I believe you know, we are a service providing organization. We have a highly sophisticated network in place that assembles the, shall we say, property of our clients and then delivers that property to a destination dictated by the client. Unlike some of our competition, we have been in business now for nearly a decade, and we have many long-time satisfied customers.”

  Thinking I should at some point demonstrate the ability to speak, I asked: “And what else might distinguish your company from the competition?”

  “We have a smaller and much more tightly controlled, skilled and dedicated staff than our competitors. They all profit when our organization is successful. This is true at all points along the path from initial receipt of our clients’ property to delivery to its final destination, as directed by the client. Also, we are much more proficient in the use of technology than the others. We have some very bright people on board developing and constantly updating the software we use to conduct our business. Some of them are quite young. They have remarkable talent.”

  “And what about pricing?” Albert asked.

  “As with others in this industry, our pricing is based on the size of the transaction and an assigned risk factor. I believe we would view your business as medium risk. So, for a $500,000 up to $1 million transaction, our fee would be 25%. $500,000 is the minimum transaction amount we will accept. From $1 million up to $5 million, in the medium risk category, the fee is 20%. Anything over that it’s 15%. We earn and collect our fee only upon satisfactory completion of the transaction. Our arrangements with our clients are at will, meaning either party can terminate the relationship at any time.”

  “Are these fees negotiable?” Albert asked.

  “For some long-time clients, we have agreed to slightly reduced charges but not for new clients. So, no, in your case thes
e fees are not negotiable. I’m sorry.”

  “What protects your clients from a defalcation—to be crude, a grab the money and run event?” Albert wanted to know.

  “A fair question to ask. Mr. Campbell, we are not in the business of stealing our customers’ money. That would destroy our business, and that is obviously not our intention. We have a great deal invested in this business and we intend for the business to have a long life.”

  “And what about regulatory issues?” I asked, thinking this is something a lawyer who was awake and alert and representing a client in Albert Campbell’s line of work would want to know about.

  “Mr. Swisher, we are intimately aware of the various government agencies out there, both state and federal and even international, that might not approve of our business. We monitor their activities constantly using highly reliable sources of information. We don’t go where they go and they don’t go where we go. If they go left, we go right, and so forth. I can think of only two occasions during my association with the company—going on five years now—where we have aborted a transaction because we felt it might be under scrutiny. In both cases, we were able to complete the transaction for our client at a later date.”

  “As I told you on the phone, Mr. Bordeaux,” Albert said, “I am out here to do some comparison shopping. Later today, Jonathan and I will be meeting with a man named Roland Kwan. Do you know him, by any chance?”

  “Yes. Roland works for one of our competitors. He, like me, is a sales representative. Very knowledgeable. I think you will find, however, that the organization he works for is no match for my organization. Its chain of command, if you will, is not a tight as ours, which increases risk. Also, it is far behind us in the use of technology intended to streamline the process of moving a client’s property along to its destination in a safe and secure manner. And I believe we are much more adept than his organization at monitoring regulatory activity. To use automobile metaphors, we are Mercedes Benz and his organization is Chevrolet.”