Two Jakes (37 page)

Scarne
had been in the apartment for more than six hours. He spent another hour in the
living room, with all its electronics, bookshelves and bric-a-brac. He searched
every book, vase, table and chair. He heard doors opening and closing in the
hallway, and cooking smells began to waft into the apartment. He had a
sickening feeling that he was on a wild goose chase.

He
washed up as best he could, put on his clothes and headed down to the garage on
the sixth floor. He had searched Josh’s car briefly during his previous trip.
There aren’t many places to hide things in a car, unless you are a heroin
dealer or Goldfinger, in which case you take off the side panels or the exhaust
system, or perhaps rip up the leather and reupholster everything. And nobody
who loves his sports car would do that to hide a disk or flash drive. Scarne
spent an hour on the Mustang, checking the inside, engine compartment and
trunk. Like the apartment, it was clean.

Scarne
realized that the only thing he’d accomplished for a full day’s work was not
being seen. Perhaps the opposite would be more productive. If Ballantrae knew
Scarne was mucking about he might do something rash. He looked at his watch.
Ballantrae was hosting a company party at the Forge within the hour. Scarne
decided to crash it and see what happened.

He
knew that calling the lack of a plan a plan was a sign of desperation, but
there was little to lose at this point. And Alana would probably be there. He
looked at Josh’s car. It probably now belonged to Randolph. Smiling at the
thought, Scarne got in, turned on the ignition and drove out of the building.

An
hour later he left the Delano showered, shaved and dressed for the lion’s den
at the Forge, the Bersa resting comfortably on his hip.

CHAPTER
47 – SHELL GAME

It
was still early. Miami’s famous nightlife had yet to kick in and Scarne found a
parking spot across the street from the Forge. He suspected that he might not
want to wait for a valet to get his car. A hostess directed him to the
Ballantrae function. As he walked through a small courtyard he saw waiters
cleaning tables and closing two service bars. Probably a cocktail hour before the
dinner. He could hear Ballantrae’s voice through the door to a small salon just
off the courtyard.

Scarne
walked to the door. Ballantrae was standing at a table giving a speech. He had
his free hand negligently touching Alana Loeb’s shoulder, who was sitting at
the table with three other couples. There were perhaps 60 other people at the
other tables in the room listening to Ballantrae, who was saying something
about “our best year ever.” Scarne didn’t like the look of Ballantrae’s hand on
Alana. It seemed intimate, or at least proprietary. He realized that in
addition to everything else he felt, he was jealous.

Ballantrae
kept talking even as his eyes followed Scarne, who casually walked over to
another service bar and ordered a Jack Daniels. A few other men also turned
their heads in his direction. They looked like men who stayed healthy because
they noticed people like Scarne walking into a room. He felt the comforting
weight of the Bersa on his hip. Among those who took an interest were Garza and
Keitel, sitting alone at a small table opposite the bar. They looked at him
impassively. After a moment, a small smile formed on Garza’s lips and he raised
his drink. Scarne returned the gesture. When he turned back to look at
Ballantrae, who was now talking some claptrap about “the new paradigm of our
financial services model,” his eyes locked with Alana’s. There was warning in
her eyes, and something else that told Scarne he needn’t be jealous.

Ballantrae
finished his little speech with a flourish. There was a burst of laughter and
overdone applause. As if on cue, waiters started descending on the tables.
Alana got up and walked quickly over to Scarne. Ballantrae started shaking the
hands of people who walked up to him.

“Jake,
what are you doing? I didn’t know you were back.” She spoke calmly but there
was tension in her body. “You should have called me. We have to talk. Why come
here? This isn’t the place.” She lowered her voice. “I’m leaving the company. I
have a few loose ends to tie up. Some things are out of control.”

“Like
the video in Antigua?”

“Video?
What video? I don’t understand.”

She
didn’t know. He was sure of it. Out of the corner of his eye he spotted Garza
and Keitel closing in. He leaned toward her and whispered, “We’re about to have
company. Someone taped us in bed in Antigua and has used the video against me.
I half thought you were in on it.”

Her
eyes widened, either in surprise or anger at his accusation.

“It’s
nice to know you’re not. Even if there is a lot I think you’re guilty of. Now
it seems someone is gunning for the both of us. Strange bedfellows, no?”

“Mr.
Scarne, isn’t it?”

It
was Garza, smiling his pearly whites.

“Speaking
of strange bedfellows,” Scarne said.

Garza’s
smile disappeared, then came back with just a little less wattage.

“Did
you hear that, Christian, he disapproves of our lifestyle.”

Scarne
had to laugh at the man’s boldness.

“Your
lifestyle is your own business and it’s probably the only thing about you two
that doesn’t bother me. Tell me, have you killed anyone today, Jesús? What
about you, Christian?”

A
strangled sound came from Alana.

“The
night’s young,” Keitel said quietly as he leaned past Scarne to take a glass of
wine off the bar. He gave it to his partner and then got one for himself as
Victor Ballantrae came up to them.

“Jake,
how nice to see you,” Ballantrae said, extending his hand, which Scarne took.
“How are you feeling?”

He
was in the company of three hard-looking men. Scarne’s Bersa felt better by the
moment. One of the men ordered straight vodka and leaned against the bar,
staring curiously at Scarne. The other two didn’t order anything but stood to
the side and scanned the room’s entrances. Scarne recognized the chiseled
features of the vodka drinker from the F.B.I. photo: Andriy Boyko. He did look
like a banker in his three-piece suit.

“I’m
doing well, Victor. Thanks for asking.”

Ballantrae
adopted a pose of thoughtful concern.

“I
think what you did in Antigua was wonderful. It must have been rough. But you
saved Alana’s life, and, for that, I will be eternally grateful. As we all are.
You don’t look too much the worse for wear. Amazing, after going up against a
robber like that. Crime on the island is getting out of hand. I’m going to have
a word with the Prime Minister about it.”

Scarne
smiled, but said nothing.

“But
tell me, what brings you here? I’m glad you are, of course. I was going to ring
you up. Where are you staying? We owe you something for what you did.”

“The
Delano. I’m clearing up some things related to the Shields murders.”

“Murders?
I know you think the death of young Shields was suspicious, but I was given to
understand Sheldon Shields died in an accident. Or perhaps took his own life. A
real tragedy. I sent a note to his brother. I liked the old gentleman. Does the
family actually think they were both murdered?”

He
said it in a way that made it clear he found the whole idea preposterous.

“In
fact, no. They fired me. I’m currently unemployed, so I thought I’d kick over
some rocks down here and see what crawls out.”

“Why
don’t you just leave it all alone, Jake? The family apparently doesn’t put much
credence in your theories. Frankly, neither do I. You’ve had a tough time. You
need a rest. Take some time off and then come talk to me. I could always use a
man with your talents. Isn’t that right, Alana?” He gave Scarne his best
salesman smile. “I’m talking top dollar.”

Alana
stood there stone-faced.

“Thanks,
Victor. That’s very thoughtful. But I’m not comfortable working for anyone
else. I think I’ll be my own client for as long as I can afford myself.” Scarne
then decided to burn his bridges, and the roads leading up to them. “Besides, I
know why Carlo Brutti shot up Alana’s party and tracked her to Antigua. Poor
Goetz. The only accidental death in this whole farce. And I know that you killed
both Josh Shields and his father. What I don’t know is why. But I will soon.”
He turned to the bartender, who was standing there, mouth agape, pouring wine
into a glass overflowing onto the counter. “That’s going to stain. Give the
wine a rest and pour me another Jack Daniels, please. Try to keep it in the
glass. Victor, do you want anything?”

If
Boyko was surprised by anything Scarne said, he didn’t show it. He merely
smiled and stared at Ballantrae.

“Jake,
I honestly don’t know what you are talking about,” Ballantrae said, glancing
nervously in Boyko’s direction. “I guess what happened over the last few days
must have affected you more than you realize. You need help. But I have to warn
you, despite my gratitude, I will defend my reputation vigorously, even to the
point of a slander suit. Now, I think you had better leave.”

“Victor,
you lie even worse than you golf.”

It
was a weak parting shot, but Ballantrae reddened. Scarne brushed past Garza and
Keitel and walked out the door. Very dramatic, he thought. Probably just got
myself killed. As he left the room he glanced back. Ballantrae was talking
rapidly to Boyko. No one followed him out to his car. If they wanted him, they
would try the Delano first. When he hit Collins Avenue, he turned toward South
Beach, just to be on the safe side. No one was on his tail, and he doubled back
and drove to La Gorce. Once again, he entered unnoticed.

Back
in the apartment, Scarne poured himself a drink and found the pack of
cigarettes. He walked out to the deck, opened up a beach chair and sat down
next to a small table before realizing he didn’t have an ashtray. Then he
spotted a large seashell on another table in the corner. It was a rather
nondescript and discolored conch. It would do. He carried it to his chair. Before
flicking an ash into it, he put the shell to his ear. He thought of Emma and
Josh Shields as he listened for the hollow sound of the “ocean” – his own
blood. Strange. There was only the faintest hum. Something fell into his ear,
and he almost dropped the shell, thinking it was some sort of small animal or
insect. He looked into the conch and something long and black spilled out,
giving him another bad moment. But it just hung there and he immediately knew
what it was.

“Son
of a bitch.”

With
a rising sense of excitement, he gripped the end and pulled. Several more
inches of black cord came out, but then whatever was at the end got stuck in
the shell. It wouldn’t budge.

Scarne
walked to the kitchen. He wrapped the shell in a towel and put it in the sink. He
found a meat hammer in a drawer and gave the bundle a sharp rap. He heard the
shell crack. When he opened the towel, the object inside came loose easily.
Scarne lifted it by the black mini-lanyard and smiled. It was two-inch long
computer flash drive.

Scarne
looked around the still-trashed apartment.

“Way
to go, Josh.”

CHAPTER
48 – PUBLISH OR PERISH

Although
he was almost certain no one knew where he was, Scarne didn’t feel the least
bit silly tilting a chair against the front door knob of the La Gorce apartment.
He didn’t bother about the sliders to the deck; he would take his chances if
Spiderman was on the Ballantrae payroll. But he slept fitfully, and with the
Bersa close at hand. The next morning he brewed coffee and took a cold shower.
He’d have to stop drinking on the job. He couldn’t afford any mistakes. He
spent an hour doing what he could to clean up the apartment. Then he packed and
called the
South Florida Times.

***

“I
heard about Sheldon Shields,” Pourier said without preamble. “I presume there
is a connection or you wouldn’t be back here.”

“This
may tell us.” The editor’s eyes lit up when Scarne held up the flash drive.
“Josh hid it in his apartment.”

“Where?”

Scarne
told him.

“Josh
and his shells,” Pourier said. “He was always bringing in a bag for me to give
to my kids.”

He
quickly put the flash drive into the UBS slot of his computer. A list of 12
folders popped upon the screen: DRAFTS, FRAUD (Insurance), FRAUD (Securities),
GOVERNMENT REGULATORS, LEGITIMATE BUSINESSES, MISCELLANEOUS, MONEY LAUNDERING,
OFFSHORE BANKING, POLITICAL INFLUENCE, PONZIS, RESEARCH and SOURCES. He copied
them to the computer’s hard drive. Scarne didn’t object. The more people with
access, the better.

“Why
do I think the LEGITIMATE BUSINESSES folder will be thin,” Pourier commented,
moving the cursor to DRAFT. He opened it, revealing three Word documents:
Ballantrae
(First Draft), Ballantrae (Final Draft)
and
To Do
. He put the cursor
over the
Final Draft
Word doc. “Only 28 kilobytes. Virtually empty.”

“Ballantrae
got to write Josh’s
Final Draft
,” Scarne said.

The
cursor moved to
First Draft
. It contained almost 800 KB.

***

Business
Empire Founded on Fraud Expands in Criminality

By
Josh Hidless

“This
sounds promising,” Pourier said dryly. “Although I’ll never understand why
reporters insist on writing their own headlines. We change them anyway.”

They
started reading:

“The
Ballantrae Financial Group, a conglomerate of financial services, banking,
insurance and trust companies, is nothing more than a front – a clearing house,
in fact – for a variety of criminal organizations, sources within the company
have revealed. The sources, who have asked for anonymity, said that Ballantrae,
which has offices in New York, Miami, Dallas, Seattle, Chicago, South America,
the Caribbean and in many European countries, has, in effect, created a huge
Ponzi scheme to hide its real operations and to launder what may potentially be
billions of dollars in criminally sourced money from both foreign and domestic
partners. The alleged mastermind of this financial plot is Victor Ballantrae,
an Australian businessman who is the sole owner of the Ballantrae Group.

Although
Ballantrae has been lionized in the financial press and is considered a rising
star on Wall Street, he has also apparently caught the eye of several American
and international police and regulatory agencies, these sources say. But his
company’s structure – it consists of more than 50 “affiliated” companies, all
with their own boards of directors and lawyers – has so far thwarted any
serious prosecutions, they contend.

According
to public records, Ballantrae has lost only a few minor skirmishes with the
Securities and Exchange Commission and the National Association of Securities
Dealers, which have imposed relatively minor fines in a handful of small cases
involving allegedly fraudulent securities transactions and aggressive
recruitment of employees from rival brokers. In fact, a survey of more than 100
complaints brought against Ballantrae’s securities brokers by clients during the
past two years reveals that the company won approximately 75% of the cases.
(Brokerage disputes rarely end up in court. Most are adjudicated by arbitrators
who have worked in the brokerage industry. Clients who lose their cases must
pay for the arbitration.)

“He’s
editorializing here,” Pourier said. “But I guess that’s all you have to know
about Wall Street.”

They
continued reading.

Ballantrae’s
non-brokerage companies have also been the target of many civil suits, all of
which have been settled or withdrawn.

“This
is small change for Ballantrae,” one source said of the settlements, which are
confidential. “It’s breakage, the cost of doing business.”

This
source, a former Ballantrae employee, said Ballantrae’s aggressive expansion
into financial services is part of its plan to launder money that is deposited
in Ballantrae International Bank, based in Antigua. According to this source
(and confirmed by others), the money that flows into that offshore bank is
“invested” in the expansion of Ballantrae’s financial services business in
America. Approximately half of the money in the offshore bank comes from
“legitimate” or “quasi-legitimate” sources, mainly very rich South Americans
trying to avoid confiscatory estate taxation in their home countries or political
appropriation of their wealth. These deposits are then commingled with other
deposits from less savory “investors,” reportedly including both the Russian
and Italian “Mafias” on the West Coast of the United States.

“Holy
shit,” Pourier said.

“Originally
much of the criminal money came from drug cartels, arms merchants and certain
Middle Eastern ‘charitable’ organizations that were fronts for various
terrorist groups,” claimed one source. “But after 9/11 a lot of that money
dried up.” This source, who left Ballantrae after he became suspicious of the
returns the company was promising its bank investors, said that Ballantrae is
being forced to move into financial services in the United States, where it has
created a growing broker/dealer business, complete with advisors who sell
securities, investment bankers who structure deals, analysts who sell research
(some of it quite good, he acknowledged), real estate developers, a marketing
arm to attract new investors in the U.S. and a huge legal department that has,
to this point, kept regulators and law enforcement officials tied in knots.

“It’s
a classic Ponzi,” this source said. “The money coming into the offshore bank is
sent onshore in the States, where it creates an aura of legitimacy. Real
clients invest real money in real securities, and may even do well on their
legitimate investments. Ballantrae earns commissions and investment banking
fees, but nowhere near enough to cover the expenses of its rapid expansion. But
it doesn’t matter. That legitimacy in America translates into even more
deposits coming into the bank.”

“Some
of these quotes sound a bit too pat,” Pourier said. “I wonder if Josh
embellished them or put words into the mouth of his sources.”

“Reporters
embellish? I’m shocked.”

“Yeah,
I know. But I’m just saying we’ll have to be careful. My lawyers will have a
field day with this stuff.”

“Maybe
we should just ask Josh,” Scarne said.

Pourier
looked pained and then continued scrolling.

The
scheme, he said, is furthered by the ability of the offshore bank in Antigua to
pay very high rates on the company’s certificates of deposit; often two or
three basis, or percentage, points higher than similar instruments offered by
mainstream U.S. banks. They can offer such rates because part of the bank money
invested in the United States has been placed in some highly leveraged hedge
funds returning 20% or more. But according to the source (and confirmed by the
company’s sales and marketing brochures) Ballantrae tells clients and
prospective clients that it achieves its spectacular returns by using a
“proprietary” computer-based trading platform that “has created a new paradigm
of investment strategy.”

“It’s
all bull,” the source continued. “The program only works if the hedge funds
continue to perform as advertised and legitimate investors can be lured into
putting money into the offshore bank.”

Since
the interview with this source, there has been a huge shakeout in the mortgage
industry and many prominent hedge funds have collapsed, causing problems for
prominent Wall Street firms and shaking the very foundations of the world’s
economy. Ballantrae is not immune to the financial cataclysm. Indeed, it may be
uniquely vulnerable. According to one source, Ballantrae takes a ‘fee’ for
laundering mob money that amounts to maybe 10 percent, equal to hundreds of
millions of dollars a year. Mobsters can put up with getting back only nine
dollars out of every ten as long as it’s untraceable and squeaky clean,
especially when they’re virtually recouping the 10% on C.D.’s. But they are
presuming their principal is safe. If Ballantrae’s offshore bank were to stop
interest payments on its C.D.’s or, in the worse case, refuse to redeem them
(offshore instruments are not guaranteed by the F.D.I.C., as are C.D.’s in U.S.
banks), the reaction of some investors can only be imagined.

“They
might not be too happy if they find out that Ballantrae is gambling with their
money in hedge funds,” the source said.

“That
might be the understatement of the century,” Poirior marveled. “If the mob decided
to ask for its money back and it’s not there, well, it’s not going to seek
arbitration.”

Ballantrae
Financial had its origins in a more modest, but still criminal, Ponzi scheme
that started in Venezuela and then metastasized to Miami. Money from that
original scheme, which was based on the notorious “La Vuelta” scam that
defrauded thousands of Venezuelans and Miami residents (mostly Venezuelan
expatriates) was then used to fund an even grander fraud involving the sale of
$200 million in zero-coupon Venezuelan bonds that the Venezuelan government has
disavowed.

The
rest of the story was devoted to a detailed explanation of “La Vuelta” and the
bond scheme. There was also an incomplete section briefly profiling the various
Ballantrae subsidiaries and some of the organization’s major players, including
Alana Loeb.

A
last line in parenthesis read: (MORE TO COME).

“Afraid
not, kid,” Pourier said quietly.

“Open
the ‘To Do’ doc.”

Although
the story is well sourced, nobody is willing to go on the record. One source
said she had heard stories about employees who threatened to spill the beans
about the company who then disappeared, or died unexpectedly. She also said
that there is something fishy about mortality rates in Ballantrae’s insurance
unit. I think she might have read “The Firm” once too often.

Tie
up loose ends. Have called the company several times for comment. Provided the
basics of the allegations. No response, except a threat to sue. Next step may
involve a trip to Antigua.

Still
awaiting copy of suit brought against Ballantrae brokers by clients burned in
lottery scam. Clients withdrew suit (paid off?).

They started going through the other folders, which each had
subfolders and were full of news clippings about the Ballantrae companies and
personnel; the Caribbean, Switzerland and other money havens; fragmented
interviews; explanations of financial terms; records of phone calls and emails;
profiles of politicians and regulators; securities regulations, and examples of
financial frauds from the Middle Ages to Madoff.

“This could take hours,” Pourier said, quitting half way through
the list. He tilted his chair back and put his hands behind his neck. “I wonder
when he had time to sleep, let alone go fishing. That was his passion, you
know. That and the goddamn seashells. This has Pulitzer written all over it.
It’s a story any reporter would die for.”

Scarne sat on the edge of the desk facing him.

“He apparently did, John. The threat this would reach print
would force Ballantrae to stop him, and not with a lawsuit. He couldn’t afford
to have his mob investors find out he was gambling their money. In effect, he
was running a Ponzi on gangsters. I don’t know what Ballantrae told the mob but
I guarantee it wasn’t that they were now in the sub-prime mortgage market and
could lose 100% of their money. Criminals are very conservative with their
ill-gotten gains. If they found out Ballantrae was gambling their hard-stolen
money – after paying him 10% to wash it – they would go nuts.”

He suddenly looked thoughtful.

“What? What it is?”

“I’ve been trying to figure out why so many bodies are piling
up. I wouldn’t be surprised if there has been a run on Ballantrae’s bank.”

“What are you talking about?”

He told Pourier about the shooting at Alana’s house and Brutti’s
death in Antigua. He left out the video. Pourier picked up a pad from his desk
and balanced it on his knee. As Scarne spoke he wrote continuously, pausing
only to shake his head.

“Who knows you have all this information?”

“Nobody but you. But I may have overplayed my hand. Last night I
shot off my mouth in front of some of his investors, or partners, or whatever
the hell they are, including the head of the Ukrainian mob in Seattle. I was
bluffing and guessing. Not that it matters. I’m sure they are looking for me.”