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“So what’s going on in Cedar Creek that’s got the sheriff asking for favors from a finance guy?”
Sandy smiled. “People come and go but Cedar Creek never changes.”
Tom nodded. “That means you’re bumping heads with the Margolis clan.”
“Trying not to, but can’t seem to avoid it in this particular case.”
“What’s going on?”
“Earlier this summer, one of the partners at Margolis and Margolis was killed in what appeared to be a hit-and-run accident on Highway Sixty-seven.”
“Appeared to be?”
“This stays between you and me, but it looks like someone actually hit the guy in the back of the head with a baseball bat and killed him first, then put him in the road and ran him over with a car.”
“Damn. What has that hellhole turned into?”
Sandy pulsed his eyebrows. “It gets better. The car that ran the already-dead Margolis and Margolis partner over was registered to Preston Margolis’s new wife.”
Tom Quinn whistled. “You’ve got yourself a shit show.”
“Don’t I know it. But, wait, there’s more.”
“You sound like an infomercial.”
“Yeah, well, this last bit is why I called you. The Margolis and Margolis partner who was killed was named Baker Jauncey. A couple of days ago his legal investigator paid me a visit. A guy named Marvin Mann. He told me Baker had sniffed out financial fraud at the Margolis law firm and recruited Marvin to look into it. The next day, Baker was dead.”
“And his investigator thinks he was killed because he was looking into the Margolis firm?”
Sandy nodded. “And here’s the kicker. The night before he was killed, Baker gave Marvin a thick file of documents he had extracted from Margolis and Margolis, detailing the financial fraud. Jauncey was a partner, so he had all the access he needed if he was looking in the right places. He gave the files to Marvin for safekeeping and was dead the next day. Marvin shared the files with me. I’ve looked through them but I’m not a finance guy. I can’t make heads or tails out of them. I need you to take a look and explain to me what’s going on at Margolis and Margolis.”
“I sniffed out a lot of scams during my years at the IRS. Let me have a look.”
“I’ve got the full file stashed in a safe deposit box because I’m not taking any chances with it. But I made photocopies of what I believe are the relevant parts. I’ve got everything in my car.”
Lake Tahoe, Nevada
Saturday, July 1, 1995 3 Days Prior . . .
SANDY SAT ON HIS FRIEND’S DECK AND SIPPED BEER WHILE HE STARED down at Lake Tahoe. Tom Quinn had moved into the den as he pored over the documents Sandy brought him. Sandy was admiring two sailboats cutting through the center of the lake when Tom reappeared through the sliding doors that led from the kitchen. He had two fresh beers gripped between the fingers of his left hand, the files in his right, and his laptop tucked under his arm.
“Here,” he said, handing Sandy the beers.
“Figure any of it out?”
Tom nodded. “Most of it. And it’s on a huge scale, Sandy. Lots of money and lots of laws being broken. It’s no wonder these files got that guy killed.”
Tom placed the files on the patio table. A yellow legal pad that contained his notes rested on top. He set his laptop computer next to the files and went back inside, emerging a moment later with a long cable and extension cord for power. He sat down and fired up the laptop.
“So here’s what’s going on,” Tom said, tapping on the keyboard. “They’re stealing client money, in a nutshell, but they’re very clever about it. They’re taking settlement checks from cases the firm has either won or successfully negotiated, depositing the full amount into a dummy account—essentially a shell company attached to the Margolis law group—and then issuing a formal settlement check to Margolis and Margolis, which gets deposited into an escrow account. The key is that this formal payment into the escrow is less than the actual settlement.
“Let’s say a five-million-dollar settlement comes in. This guy deposits the five million into the dummy account, then transfers four point nine million into the firm’s escrow account. It’s easy to miss a hundred grand when you’re dealing with these huge sums, and from what I can tell Margolis and Margolis frequently does. The client then gets paid from the escrow account. The math gets complicated because the firm keeps thirty-three percent, plus expenses. The client gets the balance. And it’s in the expenses where the firm is burying the skimming. In this example of a five-million-dollar settlement, the hundred grand skimmed off the top was explained away through a long list of bogus expenses and no client ever picked up on it. Until this guy, Baker Jauncey, sniffed out the fraud. Only once, according to what’s in these files, had a client argued about the amount they received. And in that case, the inconsistency was blamed on an accounting error and was corrected. No other clients said a word. The scam’s been going on for years according to the dates listed on the files.”
Tom pulled one of the documents over so that Sandy could see.
“Here’s an obvious one. The Margolis law group filed a suit on behalf of Janet Romo in 1993 against a grocery store chain where she slipped and fell, injuring her hip and back. The case was settled out of court for a hundred fifty grand.”
Tom pointed at the page.
