The CBS Murders (10 page)

Then they hired a private investigator named Linwood Lewis, handed him a copy of the phony stock transaction slip, and set him to work. He looked into Barbera's background and followed her for a couple of weeks, handed in a report, and then was told that his services were no longer required.

Lewis's report stated, “On May 21, 1981, an investigation was started to monitor the movements of Ms Barbera when she was not at work at 15 West 47th St., N.Y.C The purpose was to find out if she was working at another job, or to find out the reason why she did not work a 9 to 5 job like most people.”

On at least a dozen occasions, Lewis tailed her. He noted, “On May 29, 1981, around 11:30
P.M.
, upon arriving at 15 West 47th St., I observed lights on the entire floor. Subject left the building around 2:15
A.M.
She walked up 45th St. to Fifth Ave., down Fifth Ave. to 44th St. and disappeared in the garage on 44th St. between Fifth and Sixth Ave. Upon entering the garage after waiting outside for her, she could not be found. Asked the attendant, he stated he saw no one, but that there is another exit. One exit is on 44th St. and one on 43rd St. Checked with the cashier. She knew who I was talking about, because she stated she sees the lady and the car around this time a few times a week. She said the lady had just left. On my daytime surveillance, the subject would either go shopping at A. & S. and Macy's on Queens Blvd. or just stay at home. Twice I followed her on the weekend to her girlfriend's home in Teaneck, New Jersey. Learned from subject's neighbors that she is a very quiet person and she stays to herself. About visitors, it was learned that a Chinese woman comes to visit, but that's just about it. On the nights that I have followed her home from 45th St., she has gone directly home. She is not one of the slowest drivers in the world. Once she leaves the Midtown Tunnel exit on the Queens side of the tunnel, she runs like a bat out of hell. She opens up that BMW.”

Checking on Barbera's background, Lewis found that until she went to work for Margolies, she had been something of a deadbeat. She had once had an account at Abraham & Straus department store, while she was in college, but she had fallen behind and it had been turned over for collection. The same thing had happened with a charge account at J. C. Penney, and a $1,262 loan she had taken out at Chemical Bank also was in default. She had borrowed money from the United Student Aid Fund to pay her tuition at NYU, and that had never been repaid. At about the same period, she had borrowed from Beneficial Finance Company to buy a 1971 Chevrolet, had neglected to pay the last $45 on the loan, and that, too, had been turned over to the lawyers for collection.

But then, suddenly, she seemed to have plenty of money. She had bought a 1981 BMW 320i and paid the $17,700 purchase price with a cashier's check, and then came up with another couple of hunded dollars for some extras. The BMW, Lewis noted, was registered in New Jersey at an address in Teaneck, the home of Edward and Jenny Soo Chin, who other than being Barbera's assistant at Candor and her very close friend and frequent companion “does little else but watch her children.”

In sum, Lewis concluded, there was nothing to point to her having committed any criminal acts. The only suspicious facts he could find was where she had come up with the money to pay for the BMW and where she kept her money, since she kept nothing in New York State, perhaps because she owed money in the state. But that was all.

There was, though, something else that Margolies and Oestericher asked Lewis to do. They asked him to break into Barbera's apartment and search it. Margolies was sure she had books and records of Candor somewhere in that apartment, he told Lewis, and they didn't belong to her, she had stolen them, and he wanted them back. Lewis was appalled. He wouldn't hear of doing such a thing. He had a license and Margolies was asking him to commit a criminal act that, if discovered, would cost him that license and drive him out of his profession.

If Margolies was disappointed that Lewis would not do this bidding, still, the private detective had served a purpose. He had noted a few strange things about Barbera and her behavior, and he knew that Margolies was concerned about her and about her honesty and loyalty. Thus, should Margolies ever need a witness to testify that, as early as the spring of 1981 if not before, Irwin Margolies had been suspicious of his comptroller, he had one.

So Margolies, with Oestericher's help, was weaving a web to entrap Barbera. He had what he thought was solid evidence—on the surface, anyway—in the form of the Merrill Lynch slip, that Barbera had made away with nearly $800,000. He had Lewis's report and Lewis's memory of what he had seen and been told. And there was more. In the spring of 1981, the diamonds turned over to Margolies and Candor by Van Mopes had disappeared, and so had the diamonds turned over to Margolies by Oxenberg. Margolies was concocting evidence to show that it was not he but Margaret Barbera who had made away with them, and not only them but also Candor's entire inventory of diamonds, worth, he would claim, about $2.5 million, and she was holding them for ransom, demanding an immediate payment of $100,000 in cash for their return.

So Margolies was prepared to turn all the blame for all that had happened, to Maguire and everyone else, on Barbera. He was sure he had covered every aspect, that nothing could touch him. It was not that he expected his scheme to tumble yet. He thought it still had a long way to go before anyone caught on, and that there still were millions more to be made.

And, then, suddenly, it all collapsed.

13

One hot evening late in the spring of 1981, two old acquaintances ran into each other at a cocktail party in Westchester County. One was an executive of John P. Maguire and the other an executive from the Zayre department store chain. They had known each other socially for years, and they often had met at such parties, since they had many mutual friends. They had not, of course, ever done any business together, Zayre not being in the habit of turning to factors for its short-term money, and Maguire not supplying funds to the retail industry nor, as it happened, having manufacturing clients who sold to Zayre.

Sometime in the middle of that evening, the two found themselves alone in the middle of the crowd. There were some pleasantries, inconsequential conversation, and then the man from Maguire commented lightly that maybe one of these days they ought to have lunch in town to celebrate the fact that finally they were doing some business together.

The man from Zayre looked blank. He wasn't aware, he said, that Zayre had turned to Maguire for some factoring money, or that Maguire had moved into the retail financing business.

The man from Maguire laughed. That wasn't what he meant, of course, he said. What he meant was that Zayre was buying a lot of jewelry from Candor Diamond and that Maguire was factoring Candor's sales, so in that way, at least, they were obviously on a business footing these days.

The man from Zayre still looked blank. The name Candor Diamond rang no bells with him.

Well, the man from Maguire said, he guessed people don't always know what other people in the same company are up to.

The conversation went on to other things then. But the man from Zayre kept thinking through the weekend about what his friend had said. There was something troubling about it. If one of Zayre's suppliers was factoring its sales, which meant that Zayre would be sending checks to the factor, he was in a position to know. And he knew nothing, could remember nothing about sending any checks to Maguire, could remember nothing about a company called Candor Diamond.

Back in the office on Monday, he did a little checking, then called his friend from Maguire. I think somebody's putting one over on you, he said. I've looked at the records. Zayre did a little buying from this company, Candor Diamond, a couple of years ago. We took about two thousand dollars' worth of their stuff. There wasn't much demand for the jewelry and it didn't sell very well, so that was the end of it. We haven't bought anything from them since.

That was very disturbing news, indeed. Candor had filed a number of invoices with Maguire showing very large sales and shipments to Zayre, had just filed another one declaring it had sold and shipped $124,000 worth of merchandise to the chain, and Maguire had deposited the required $105,400 in Candor's account.

The worried executive went to W. H. Casey, who recently had succeeded Peter O'Neill as the Maguire official in charge of the Candor account. What to do? A look through the records revealed that by that date, Candor was into Maguire for nearly $5.5 million that remained outstanding and unpaid. If Margolies was pulling a fraud, which it certainly looked as though he was, then Maguire was in very serious trouble. It could, of course, move rapidly and try to seize the Candor inventory of diamonds, which Margolies had given the factor a lien on and that the jeweler had said was worth $2.5 million. But that still would leave another $3 million owing. That was just too big a loss to swallow. Perhaps, Casey and others at Maguire, with whom he discussed the troubling situation, reasoned, a little quiet pressure might set things aright, might salvage something.

Another Maguire executive had a friend who was an FBI agent assigned to the New Rochelle office in Westchester. He called his friend and explained the problem and the growing suspicions that Margolies had perpetrated a major fraud. The agent listened. Did Maguire want to press federal fraud charges? Not at the moment, the Maguire executive said. What the factor wanted was its money back, or at least as much of it as it could get. Maybe a little quiet investigation to see if, indeed, Margolies had committed a fraud, and if that turned up, then maybe a semi-official call to Margolies to tell him that the game was up, that all was known, that he was, at the moment, facing the possibility of a civil action, but that if he made good on what he owed Maguire, then perhaps no criminal action would follow and the whole thing would just fade away.

It didn't take long for the agent to discover that the feared fraud had taken place, though its dimensions still were unclear. But the call to Margolies resulted only in denial, only in Margolies's claim that he didn't know what the agent was talking about. And it did something else: It alerted Margolies. He knew now that the scheme was coming apart.

He got further evidence of that a few days later, in mid-June. Casey called. Maguire, he said, had been marveling at the miraculous growth in Candor's sales in the past few months. It was so miraculous that he wanted to bring a team of auditors into Candor's offices and go over the books.

When? Margolies asked.

He'd like to do it right away, Casey said. But, unfortunately, that wouldn't be possible. He and an important member of the audit team were about to go on a month-long vacation. They wouldn't be back until the middle of July. How about then?

Fine, Margolies said.

That gave Margolies another month and he made the most of it. Invoices, claiming millions of dollars in sales and shipments, poured out of Candor's offices and into Maguire. And within a week of that call from Casey, announcing the impending audit, Irwin and Madeleine Margolies applied for United States passports on an expedited basis. They claimed they had reservations for a flight to Israel in June. Actually, their travel plans, which were made only after the Casey call, scheduled them to leave for Tel Aviv on August 9. But they wanted those passports, and they wanted them as quickly as possible, ready for use in case of an emergency. They did more. They prepared for what might turn out to be a lengthy stay abroad. They prepaid three months of installments on the mortgage on their Westchester home. They paid notes given for the purchase of high-quality diamonds, notes that were not due for several months. They somehow managed to persuade Candor's few legitimate customers, among them Caldor and the Army-Air Force Exchange Service, who knew of the factoring agreement with Maguire and had been paying the factor as required, to skip that step and pay their bills directly to Candor, which enriched them by another $100,000. And they began to siphon off more money and transfer it out of the United States, perhaps to enable them to live in the style to which they were growing accustomed. Through Bank Leumi in New York, Margolies opened a personal account at Bank Leumi Israel in Tel Aviv and then, between June 19 and July 23, he transferred $200,000 out of Candor's New York account into that new personal one in Israel.

Then Casey was back from vacation. On July 24, first thing in the morning, he called Margolies to invite him to lunch, not just with Casey but also with Casey's superior, James Amato. It was hardly an invitation. It was an order. Margolies arrived. Casey and Amato told him that the audit was going to take place immediately. Margolies balked. That was impossible, he declared. The jewelry show was taking place over the weekend and into the following week. Everybody at Candor would be involved, and so nobody would be available to assist the Maguire auditors. They could come in sometime later the following week and go over the books, and they would have complete cooperation. Then Margolies turned back into his affable self. He invited Casey and Amato to visit the Candor display at the New York Hilton during the show and take a look at just how good the line was. Were they interested? They were. Fine, Margolies said, he would call and set a convenient time for the visit. Then, lunch finished, he departed, saying he would be in touch with Casey very soon.

That night, Margaret Barbera went looking for Margolies. She had important things to discuss with him if they were to be prepared fully for the impending Maguire audit. She went to the Hilton, to the Candor booth. Margolies was not there. She went down to the Candor offices on Forty-seventh Street. When she reached the office doors, she could hear a lot of noise from inside, the sound of things being moved around, loud voices, perhaps an argument of some kind. She couldn't be sure. But when she tried to enter, Scott Malen barred the way. She was not permitted into the offices, he told her. Why not? she asked. It was vital that she see Margolies without delay. Impossible, Malen told her. Margolies himself had given specific instructions that she was to be kept out. Barbera turned and went home.