Chapter 9
“So what do you think, Trevor?” Henry asked after Frank laid out all of his evidence.
“What’s your job at Alawen, Frank?”
Frank replied, “Chief Financial Officer. It’s more like a divisional comptroller, really, but because Alawen is a separate corporation I sign off on reports to the province and the Canada Revenue Agency.”
“Does your job description allow you to look at any and all financial records at Alawen?”
“Yes. And all related documents like consultant’s reports and human resources files. Basically anything we spend money on and all the backup.”
Trevor gave a sigh of relief. “Good. So far it’s just fact finding so there’s no problem with the evidence chain. I guess now you have to decide what to do, Henry.”
“What are my options?”
“The first response has to be to stop the bleeding and tighten controls. Then you consider the alternatives.”
Trevor started to tick scenarios off on his fingers. “You could keep everyone on and with the enhanced controls they wouldn’t get any more money from the scheme. That’s not a good option if you are going to take any successful legal action against them and they’d probably start looking for other ways to cheat you.”
“You can inform them that you have evidence and allow them to resign quietly but then you eat all the losses to date and you won’t be able to give them a bad reference.”
He brought down another finger. “You can terminate all of them for cause and replace them with good people and write off the losses. But that might look like a cover up if it came out. Investors might think twice about putting their money in Menzies if you have to go to the money markets again.”
“Or, you can terminate them for cause and sue them for your money back or prosecute them criminally or both. It’s counter intuitive but prosecuting and suing them is the easiest way to keep investor confidence, even if you don’t win.”
Henry nodded. “Frank, you’re the accountant. What controls is Trevor talking about?”
Frank looked thoughtful for a moment then said, “There isn’t much more that you need to do in terms of fixing the rules. Tony is supposed to spot these things and fix them as needed. He’s supposed to be the control. Instead he’s colluding with J. David and lying to you.”
Frank drummed his fingers and the others waited for him to continue. “What you need are detective controls like surprise audits. You might have to tell Tony you want to see all contracts over ten thousand for the next little while. Maybe you should consider an internal audit function that reports directly to you and not the CFO. They should be able to spot a scheme this widespread. The bad actors would think twice about continuing the scheme if they thought someone was looking over their shoulder. It was pretty easy for me to spot but the literature says that fraud artists get greedier if they don’t get caught so the longer it goes on the easier it is to trip over.”
Henry frowned. “This is an awful mess. I trusted Tony.”
“It’s a very big mess,” agreed Trevor. “But there is one more consideration. If you don’t get all of the subsidiaries simultaneously, evidence may be lost or destroyed, and you might end up keeping one or more of the thieves on payroll looking for ways to cheat you again.”
“How long does it take to set up something like that? Simultaneous audits, I mean. And what are we looking at in terms of cost?”
“How much are you willing to spend? If you don’t want to get the courts involved it’s only matter of giving all of the bad actors their severance. You could do that as soon as you can find people to replace them. If you’re thinking about any court action at all, well, forensic auditors aren’t cheap. Just making certified copies and indexing all the documents at all of the offices would probably cost over a three hundred thousand. Preparing everything up to the discovery phase for prosecution, if we estimate that there are fifteen or so key conspirators, would probably run you a million, minimum. You could be looking at three million by the time everything is settled. Plus legal fees for your lawyer to intervene with the Crown Prosecutor.”
Frank remembered what Trevor had indicated earlier. “Does that include the forensic work to recover the money?”
“Yes. But there would be extra costs for the lawyers. As a ball park estimate you’re looking at another three hundred thousand. But some of the theft could be covered by the bonding insurance, if you have any.”
“We have insurance. But we’d have to confirm how much was stolen or diverted, right?” Henry asked.
“Right. The Crown usually picks a couple of slam dunk items for each of the crooks in order to get a conviction, so the amount presented to the judge in criminal court is often much less than the amount we would sue for. Or he might only go after Tony and the highest ranking person at each subsidiary and let us take care of the rest through civil suits and reports to the bonding company.”
“How much are they stealing from me?” Henry looked at Frank. “Ball park.”
Frank said, “From the looks of it, about a half million a month is being diverted from just Alawen. If all the recently appointed subsidiary CFOs are involved it could as much as thirty million this year. But it has escalated so it would be less in prior years. Call it sixty million over the past five years.”
Trevor whistled.
Henry blew out a sigh. “Profits have dipped in the past four years and we’ve had to put some badly needed equipment upgrades on hold. What a mess.” Henry ran his hand over his bald spot. “Trevor? How long can I delay putting things in motion?”
“Not too long. Frank dated this report for today. I wouldn’t wait more than thirty days at most to get the auditors started on it. We don’t want to give the defense any reason to argue that you concur with the false invoices or extra payroll costs.”
Henry straightened as if he’d made a decision. “I’ll go to the police. I couldn’t sweep it under the carpet and live with myself afterwards.”
Trevor asked, “Will you lose any contracts at Alawen because of this?”
Frank said, “I don’t think we’d lose any current contracts, unless some of that money is used to pay kickbacks to someone who can cancel the contract. Cancelling something with a firm delivery date is pretty unlikely. But we may get fewer contracts in future if we stop paying.”
Trevor frowned. “I hadn’t thought about the possibility that there might be kickbacks. That opens up more questions about those missing laptops and cars. Kickbacks aren’t always money.”
“Well, the sooner we get the police involved, the better.” Henry looked grim. “Trevor? Can I put you on retainer to handle this?”
“Sure. But I’ll need a lot more space if I’m going to have to host a team of forensic accountants for a year or more.”
Henry gave Frank an assessing look. “Frank? You’re a licensed public accountant, right?”
Frank was instantly suspicious. “I’m a CPA, so yes, I could be licensed in Ontario if I transferred my membership.”
“I’ll bet you’re dying to go into private practice.”
“Not really. I don’t have any talent for sales.”
“I’m sure Cassie will be able to help you with that. She’s very charming.” Henry’s broad smile didn’t make Frank feel any more comfortable.
“Where are you going with this?”
“I’d like you to quit Alawen and set up practice here in Ottawa.”
“Why would I want to do that?”
“So you can continue working for me and coordinate all of the forensic work. Anne and I have a registered partnership we use to handle our charitable donations and the trustee we use to keep everything straight wants to cut back on his workload. We’d pay you the same as Tony or one of the presidents of the subsidiaries. Well, grossed up so you have the same take home, anyway.”
“I’m still confused.”
Trevor chimed in. “I think what he wants is a way to keep you under wraps with this analysis to give the police the
time they’ll need to investigate. How long did the last case take, Henry?”
Henry snorted. “Almost a year, and that was a simple case. And it would have taken longer if Matt’s wife hadn’t divorced him in the middle of it and pointed the police in the right direction after they assured her she wouldn’t lose the house.”
“This might take as much as six years by the time all of the cases are through the courts.” Trevor gave Henry a serious look and asked, “Am I on the clock now?”
“You are. Since this meeting started, actually.”
“Then I advise that you only hire Frank to look after your charity trust. If we need Frank’s help with the case, I will hire him so that everything is under solicitor-client privilege and we can control what we give to the defense lawyers. Then when it hits the press you can say ‘speak to my lawyer’ and I can say ‘no comment’ about a million times for you.”
“Good idea.” Henry smiled. “So, Frank, do we have a deal?”
Frank frowned. “Can I talk it over with Cassie first?”
Henry’s smile broadened. “Smart man. This could get very hairy down the road and you are going to need her support. And be careful how you present it. She’s still very young and you want to be sure that it’s her decision too.”
Trevor asked in a puzzled tone, “Cassie’s not that young. She’s what, twenty-four or so?”
Henry snorted. “She fooled someone else, too, Frank. Be sure to let her know about that when she doesn’t believe that she’s got presence to burn. She’s only seventeen, Trevor.”
Trevor’s eyes widened. “Then it’s a good thing that this will take a while. The opposition could try to attack Frank’s credibility because he’s married to a minor.”
Frank bristled and said, “She’s not a minor anymore.”
Trevor said, in a conciliatory way, “Maybe not legally, but there are some very unscrupulous defense lawyers who would use her age to attack your credibility. But with luck, you won’t have to come anywhere near a witness stand.”
Frank rolled the tension out of his shoulders. “Okay. What do I do about the records I hid? And this year’s records?”
Trevor asked, “Is there anyone at Alawen you can trust to witness to the copies?”
Frank said, “I think so. Marie-Ève Gauthier might help us. Otherwise I can ask my friend Stephen Barnes to act as a witness. He’s a lawyer who’s on my water polo team.”
Trevor said, “It would be better if you can get a notary to certify the copies.”
“I’m pretty sure Stephen is a notary, too.”
Henry clapped his hands and said, “Okay. Assuming that Cassie agrees, you go back to Halifax for a couple of weeks to transfer everything to your replacement. Depending on what the police advise us, I’ll let Tony have a reasonably free hand in selecting the new CFO, as long as you think that Marie-Ève is willing to keep her eyes open.”
Frank suggested, “You might want to make a round of visits to the subsidiaries to review current marketing efforts. I could invite Marie-Ève and her family over and you could sound her out. I think she’s very trustworthy, and she does have some forensic experience.”
Trevor nodded. “That sounds good. Do you think you can get Marie-Ève and your friend Stephen to come in to certify copies of the things you’ve found to date? It might have to be done in the evenings.”
“Very likely. We’re down a person because of the ghost in the accounting section so overtime is not unusual. I think it’s part of why Reg had the heart attack and why he couldn’t keep anyone long term.”
“Except you.”
“Oh, believe me, I thought of quitting several times but I didn’t have much of a social life, so the work was a comfort. Until now.” Involuntarily his eyes went to where he thought Cassie might be sitting upstairs.
Henry followed Frank’s eyes and grinned. “I’ll send an email tomorrow to you with a copy to J. David authorizing him to hire another person for the accounting section because Anne noticed the time stamp on too many of your reports.”
Frank looked sheepish. “At least you know part of why it’s happening.”
Henry gave him a pointed look. “Part of it.” Then his face took on a pained look. “If you accept the contract with Anne and me there will be a fair number of social obligation evenings, between ten and twenty a year. If we ask you to go, you should consider them billable time. We’ll have to warn Cassie because you will be schmoozed like crazy. Everyone knew that Charles was very careful who to recommend to Anne so the people we don’t currently support are going to test your mettle.”
Frank gave a wry grin. “That’s not so different from Mother’s events. Everyone knows that both Mother and I support a limited number of causes. I know how to say no in lots of different ways. Some of them are even polite.”
Trevor laughed and said, “I’m so glad we have young kids who can get sick at the drop of a hat. Fiona hates those parties unless there’s a critical mass of her friends attending.”
Henry said, “Don’t worry, Frank. Anne will brief you on all the politics.”
Frank nodded. “I’m more worried about Cassie. She’s very inexperienced in social situations.”
“But she doesn’t look like she’ll fall for a line. I used to ask my teenagers for their opinion of the various people who came to our parties. Once they understood that some people use their charm in a deliberately deceitful way they were a great help to us. Teenagers seem to have this built in ability to detect insincerity.”
“And Cassie’s been hurt by at least one charming scoundrel recently, although it was her mom who got taken in.”
Henry stood. “Trevor, what should we do with Frank’s paperwork?”
The other men stood. “I’ll take it as a start for the case. Frank can bring or send the notarized copies later.”
“Okay, let’s join the ladies.”
———
Frank came into the living room to see baby William asleep in Cassie’s arms and felt a sharp pang of longing. Cassie looked up and smiled contentedly at her husband and patted the empty space next to her on the sofa.
Henry sat in his favourite chair and gave the bare bones summary to the suddenly subdued women. He looked at Anne and asked, “Is Charles still talking retirement?”
Anne gave Henry a puzzled look and said, “Semi-retirement. He’s dropped about a third of his personal clients so far, but he’s kept enough to keep his team leaders busy. I think we’ll be his last hands-on client because he likes dealing with all the charities.”
“Do you think he’d be upset if we asked him to transfer that work to someone else?”
“He might be but Ginette won’t. She thinks they need to spend more time with the grandchildren.”
“Okay. I’ve asked Frank to consider setting up in private practice here in Ottawa. We’d be his first client and Trevor would be his second.” He explained that they needed an arm’s length place to house the forensic investigators while they did their work.
“Frank said he’d have to get Cassie’s permission, so I won’t ask for a decision right now. But are there any pros or cons you want to put on the table?”
Cassie looked at Frank. “Is it really up to me?”
“No, my dear, it’s up to us. We don’t have to give Henry an answer until Thursday afternoon. You should talk it over with Meghan when you have lunch with her tomorrow.”
“Okay, I’ll do that.” Cassie started, “One pro is that we have to buy a house no matter where we end up. Frank says he only has a one bedroom apartment. We’ll want a bit more room than that.”
Frank said, “Another pro is that we’ve already made friends here with a couple in a similar situation to ours. Gene is about twice Meghan’s age.”
Anne smiled. “Evgeni and Meghan Sokolov? They’re wonderful people.”
“I take it you know them?”
“Meghan and I are both on the board at one of the charities that does outreach to the street friends. And we he
lp raise money for the Food Bank and other charities that do poverty ministry.” Then Anne frowned. “One of the cons will be the social schedule you and Cassie will have to keep. She’ll need a lot of dresses and a very thick skin.”
Fiona said, “But you’ll be at most of those, Mom. You can mentor her, like you did with us.”
Anne looked very pleased at that thought. “That would be fun. And from what I know of your family, Frank, you’ll be able to help, too. The Ellis name will open a few doors.”
Frank rolled his eyes. “I suppose.” Then he brightened up. “Hey, I’d have my wife by my side, wouldn’t I? That might make it actually enjoyable for a change. Maybe the gold diggers would finally leave me alone.” He looked fondly at his wife, trying not to react to the very domestic sight of her holding a baby. “We’ll have to get dance lessons. You said you wanted to go dancing and I’m really out of practice.”
Cassie sighed as she imagined dancing with Frank. “I’d have to put that down as a pro. We did two weeks of ballroom dancing in Grade 10 gym class. I wanted to do more but the free classes at the rec centre never fit my schedule.”
Henry said, “Another pro is that he’d be his own boss and have a more flexible schedule. But there is the con of getting everything registered and getting set up. And I was going to say that Frank would be getting a raise but I don’t imagine that’s a big issue.”
Cassie shrugged and William stirred. She said, “I’ve been very poor most of my life and now I’m not. Rich is more comfortable but it seems to me that you end up with the same amount of problems. They’re just different ones.”
Frank said, “Money has never been an issue for me. I’m not working because I need the money. I work because I need to keep grounded. I expect that I will eventually be asked to run Ellis Holdings for the family so I need experience in a lot of different areas. Taking care of your foundation would be another great experience for me.”
Cassie raised an eyebrow. “I thought you didn’t want to work for your father.”
Frank said, “I don’t. But I do want to have the right combination of skill and experience to be able to take over and run Ellis Holdings properly, if the family needs me to. I owe it to Grandfather to make sure there is an Ellis actively involved in running the company after Dad finally gives it up. But Dad wouldn’t like some of the changes I’d make.”
Henry raised his cup in a toast and said, “I hope you’ll say yes.”
Frank said, “Regardless of our decision, Cassie, I have to spend all day tomorrow and Wednesday afternoon walking Trevor through the file in detail so he can take notes before we call in the police. That will probably be Thursday. So you’ll have some time to yourself this week, other than lunch with Meghan.”
“If you’re bored this week while Frank’s working, Cassie, I committed to making up emergency packs for the street friends. The outreach teams pass them out.” Anne had a hopeful expression on her face.
Cassie’s face shuttered and she said, “I think it’s too soon for me to get involved in that kind of work. But I’ll keep it in mind if we stay in Ottawa.”
Fiona pointed at William. “My kids like you. If you wanted to, you could come over and hang out with us. It would be nice to have someone who speaks in full sentences to talk to.”
Cassie smiled at that. “That’s the second person I’ve heard that from this week. Meghan said the same thing to me.”
Anne snickered. “There’s a reason why churches set up activities for stay at home moms. Extroverts like Fiona and Meghan need regular contact with other grown-ups or they go stir crazy.”
Trevor asked, “So are you an introvert like Frank seems to be?”
Cassie said, “I really don’t know. Is there a test or something?”
Henry laughed. “It’s pretty simple. If you’re feeling like you need to re-energize do you want to go to the mall with your friends or do you want to grab your book?”
Frank said, “Grab a book,” as Cassie said, “Mall with friends, if I had any.”
Cassie said, as an aside to Frank, “Just because I like to read doesn’t mean that it’s what I want to do all the time. Mind you, I might be saying that because Gord wouldn’t let me go anywhere except school and the library for the last six months.”
Fiona said, “It’s always good to have one of each in the family. Trevor sometimes needs to be reminded that other people exist. And he reminds me that sometimes it’s good to stop and think and pray.”
William began to make mewling noises. Fiona said, “We should go now so we can be home to feed and change William before he starts to really yell. And Sandra and Aaron needed to be in bed a half hour ago.”
With some reluctance, Cassie gave up custody of William to his father. “I’ve never held a two month old before. It’s pretty special. He’s very sweet.”
Trevor smiled and said, “Then you’ll come over for the three a.m. feeding?”
Cassie’s eyes widened and her smile froze before Fiona said, “Don’t tease the poor woman, Trev. You’ll scare her badly enough that Frank will be forty-five before she agrees to have any.”
Cassie gave Frank an involuntary glance that showed him she had a longing for children of her own before she realized she’d given herself away. Frank’s eyes softened as he took her hand.
Everyone stood as the Trimbles hunted for a wayward shoe, some scattered toys and a misplaced backpack. When they left, Cassie and Anne started to clear the coffee things. After their wives declined their offer of help, Frank and Henry sat back down to talk about the local sports scene.
Cassie set the coffee tray next to the sink. “Thank you for inviting us, Anne. It looks like Frank has a big weight off his shoulders.”
“I’m glad you spoke up on Sunday. Since his heart attack scare, Henry isn’t as flexible as he could be about work. After all, Jesus healed people on the Sabbath.”
Anne began to load the dishwasher. “Now, I expect that you’re overwhelmed because you’ve been dumped into the deep end with all of this on top of a very sudden wedding. We had Frank checked out pretty thoroughly when Reg wanted to hire him because Grant is one of those corporate raider takeover specialists. I was worried that Frank would be providing Grant with inside information. But now it looks like Reg wanted to hire him because he thought Frank would be selfish like his dad, even if we knew differently from the report.”
Cassie said, “Frank has been very anxious about this since I met him.”
Anne said, “Except when he’s smiling at you. I think you’ll be very good for him. He needs someone to take care of. And someone to take care of him.”
Cassie felt a flash of sadness but smiled anyway. “Well, I have a lot of experience taking care of people.”
“So you were saying. I hope our questions weren’t too nosey.”
“Not too nosey but I hope that people will accept Frank’s ridiculous love at first sight story.”
“Well, if the way he behaved towards you tonight is typical, he won’t have any problem. Fiona said that you reminded her a bit of Meghan. I just hope you’ll have a smoother ride than she did.”
“Oh?”
“Meghan didn’t always have the best taste in clothes and she had to learn how to be diplomatic. I think she was very hurt by some of the nasty comments. I think you’ll have an easier time with that because you dress very tastefully and know how to listen but you could have some problems making friends among the younger women in our social circle.” Anne grinned. “Not that you should want to make friends with all of them. Many of them are too full of themselves and think that getting to the top by trampling over others is okay. Besides which, the only good opinion you will ever really need is Frank’s, so make sure you can talk to him. If you decide to stay in Ottawa, our church runs a course for married couples that’s designed to improve communication between husband and wife. Henry and I took it three years ago.”
“But…”
Anne gave a rueful grin. “We all have bad hab
its we need to work on. I spent too much time away from the house in the evenings after David hit university and I could finally volunteer for things. I overdid it and Henry was feeling abandoned. But of course he wouldn’t tell me that. He thought he owed me because he was convinced I had sacrificed too much in the early years to let him build up the company. The course let us get some of those irritants on the table so we could talk about them.”
Cassie asked, “Why are you telling me this?”
Anne turned and gave her a big smile. “Because you’re a married woman and deserve to be treated like a one. I’m afraid that if I start to treat you like one of the youth group girls I’ll put my foot in my mouth. Your life now is very different from theirs because you and Frank are a unit. All your decisions affect him. And his affect you. The rest of your high school classmates don’t have to worry about that.”
At Cassie’s thoughtful expression Anne continued. “Marriage isn’t just a continuation of going steady. It’s about forming a real partnership that supports God’s design for us. To have someone that cares for you, who has your back and helps you create a home and a family and raise children that are loved and provided for.”
Cassie frowned. “I wish someone had told my Mum and Dad about that.”
Anne shrugged. “Not everyone gets it right. Some people don’t even try very hard because divorces are so easy to get. You have a good man, Cassie. If you give him the love and respect he needs and he does the same for you then you’ll have a wonderful life together.”
Cassie retreated into a thoughtful shell, so Anne finished loading the dishwasher in silence and started it before they rejoined the men.