“Yes,” said Stern simply. He understood the point.
“But I don’t think she’s a real star there yet. What’s the word? Ambivalent. They can’t get her to decide anything. She’s always wringing her hands. You know. Tries a good case, though. Nice-looking woman has got a hell of an advantage in front of a jury, don’t you think?”
Stern uttered a sound. Perhaps. Mel went on. Clearly, he had little interest in speaking about John.
“Y’know, I should blame you for hiring her. I say she’s my fault, but she’s really yours.”
“Mine?” asked Stern. “Klonskv?”
“I just remembered this. I asked her why she wanted to be a trial lawyer and she told me this story about when she was in her first year of law school, how she saw every day of the Sabich trial. She loved watching you work. I forgot how she described you. ‘Sleight of hand,’ I think. I thought it was a cute way to put it.”
Indeed, thought Stern. Tooley must have held his sides.
“So you see, you’re her idol, Sandy. I bet she gets hot flashes whenever you call.”
“There is hardly any sign of that.”
“Who knows with her? Very emotional person. She been telling you yet about her goofy husband?”
“Not really,” said Stern. He felt, more acutely now, some alliance with Klonsky. Mel was improving his opinion of her the longer he went on.
“She will,” said Mel. “She tells everybody. You know about this guy? He’s a mailman. I’m not kidding. He writes poetry and delivers mail. The guy thinks he’s Omar Khayyam or something. Apparently he’s nuttier than she is. Every second day while I was there she was in the head bawling her eyes out, saying she was going to divorce this guy. And now she’s p.g. because her biological clock is going ding-dong. Oh, well,” said Mel, finally tired of the subject. “Be kind to her, Sandy.”
“More the reverse,” said Stern, trying in the mildest way to say something in Klonsky’s behalf.
“I’m sure Sennett’s watching her like a hawk.”
“So it seems,” said Stern. “Might I ask what he tells you?”
“Not clear,” said Mel. “Not clear. I believe they’re looking for immunity. I’m not certain for what.”
Stern hung there, feeling for all the world like a small insect humming its wings in a formidable breeze. There was little more that he could ask. Given pride, and fear of what might go back to the government, he was reluctant to discuss the blank spots in his knowledge of the investigation. And there were few other avenues of inquiry. What John had told Mel, if anything, was out of bounds in this kind of situation. Many defense lawyers blurted out their client’s confidences like bits of witless news posted on some local bulletin board, but Stern had never shared that inclination. In a situation of potential adversity, he neither asked for nor shared his client’s private words, his rigidity on this point of ethics accepted as one more part of Sandy Stern and his formal foreign manner, like the hedgerow and iron fence about certain older homes.
“I’m just getting into this thing,” Tooley said. “Maybe I can give you a call next week when I get my bearings.”
“Yes, of course,” said Stern. He would never hear from Tooley, not until a day or two before the indictment was returned, when Mel would describe vaguely the factors that required John to ax Dixon. Stern had faced similar dilemmas himself when he represented witnesses. But he tried to give his colleagues what little help he could along the way. Stern prepared to conclude the call, going over the list of things that Tooley wanted from him. Mel, slyly, had put the shoe on the other foot and was the one receiving all the information.
“He’s a nice kid,” Tooley said in conclusion. “Maybe not a rocket scientist, but he should come out okay.”
“One hopes,” said Stern, nettled nonetheless by the feeling that Tooley had gone out of his way to provide this dim assessment of his son-in-law.
“It’s crazy how he came to me. You gave him a couple names, I take it.”
“A few,” said Stern. Neither he nor Tooley harbored illusions about whether Mel would have been included.
“He called those guys, but nobody was in. Apparently you put the fear of God in him. Felt he just had to get a lawyer lickity-split. So he called everybody he knew and ended up getting my name from your son.”
“From Peter?”
“My brother Alan and Peter were like this in high school. Remember Alan? I have to give Pete a call and thank him.”
Alan was a handsome, wholesome, genial kid. It seemed impossible that the same home could have produced something as viperous as Mel Tooley. Stern held his head while he absorbed the latest news. Peter again! It was as inevitable as the seasons, however, that he would have mixed in if asked. Ignorant or not, his son considered any family problem part of his domain. Meanwhile, Stern imagined Mel across town, in his flashy office, smirking. He had Stern’s client paying his fee while John considered laying Dixon low, and Stern’s own son was the source of his employment. Quite a tickle.
Chalk up one more for the government, thought Stern, as he put down the phone. There were lawyers friendly to the target or his counsel, or naturally disinclined to help the prosecution, who would go over the situation with John two or three times and remind him of how large the gaps were in his memory, how unrewarding testimony for the government might be. But that clearly was not Mel’s plan. He would offer John up freely to the prosecutors, encouraging him to be forthcoming with the vaguest hunch or suspicion. And John—if Stern could correctly read Tooley’s silence and the signs in his own conversations with his son-in-law—apparently had much to tell.
Idly, he contemplated how it must have gone between John and Dixon. It was not likely that Dixon had announced what he was up to; he was too secretive for that. He issued commands, which John was afraid to countermand. But a certain furtiveness must have accompanied this scheme. Just between me and you. Don’t tell. As Clara always said, John was not dumb. Sooner or later, he must have known that these trades were being handled differently from others. So they went on in the usual murky world of collaboration and deceit, each with some unspoken ground of disrespect for the other: You are weak. You are dishonest. His son-in-law was the classic stuff of the government witness, an unquestioning lower-down with the convictions of a noodle. As soon as Tooley explained the facts of life to him—that his commodities registration and his right to do business on the financial markets in the future hung in the balance—he would reduce his level of actual suspicions to none at all. By the time he got to the witness stand, he would be one more wanton soul testifying that he had merely followed orders, without a minute for reflection. With his look of childish innocence, and his relative inexperience, John would carry this act off better than most.
Thinking of all this and the way the situation was gradually spinning out of control, Stern felt queasy. For just an instant, he fell beneath a quirky vision of his entire family down at the federal courthouse, testifying, pointing fingers, hopelessly involved. In that scene, he somehow was the victim, not the man accused but the one left out in the cold. Everybody knew more than he did. He shook the notion off, but looked down to the phone, full again of that sense of coming injury which could not be prevented.
25
MARGY SEEMED TO HAVE DONE something with her hair. Near her shoulder it sprayed up in a froth of curls, and its blondish tint seemed brighter when she came into the light. She looked bigger than Stern recalled—a hale, large person full of life. He refused at once to allow recollection or imagination to take him any further.
“Fine,” she answered when he inquired about her flight. “Nice hotel,” she added. “Slept good.” A simple declarative utterance ripe in implication: all was forgotten, forgiven, swept aside. Margy was good at this, pretending that nothing had ever occurred; she had done it, Stern sensed, dozens of times. Whatever the writhing inside, the internal outcry, the reverberations would never touch the surface. She sat there all dolled up, wearing a raw-silk suit and a
n orange blouse with a huge bow. She had come into Stern’s office carrying a large briefcase and a garment bag slung from her shoulder, and had been savvy enough to extend her hand, with its long red nails, while his secretary was still present, so that neither of them would be discomfited by the opportunity for some more intimate hello. The Oklahoma businesswoman, determined and composed. Hi y’all.
Behind his smoky glass desk, Stern spent a moment describing the day’s agenda. He and Margy each drank coffee. Together, they would scrutinize the documents the government had subpoenaed and attempt to anticipate Ms. Klonsky’s questions. Then they would proceed to the U.S. Attorney’s Office, where Klonsky would interrogate Margy in preparation for her appearance before the grand jury, which would immediately follow.
“Do I gotta do that,” Margy asked, “siddown and have this chat with her?”
“No, but it is routine. It suits both sides. I am not allowed inside the grand jury room, so by submitting to an interview, we learn in advance what the prosecutor has in mind and I will have the chance to help in any troublesome areas. Ms. Klonsky, in turn, finds which questions she would rather not ask you on the record.”
“I get it.” Margy was satisfied. She asked where he wanted to start, and he pointed to the briefcase.
“The hard part,” said Margy with a smile. Hard port.
“A problem?” asked Stern. He did not care for the sound of this. He put down the coffee cup and removed the subpoena from the file. Margy unloaded first the checks the government had demanded—all those written in the first four months of the year for amounts exceeding $250. She had them literally tied up in string, nine stacks, each the size of a brick, with the severed perforations lending, from the side, a striated look, like certain fish.
“What-all they gonna do with these?”
“They are looking, I assume, for funds being transferred to Dixon. Is there any evidence of that?”
“Shore,” she said. “Lots of it. Salary. Bonus.”
“Anything else?”
“Nada.”
“Did any companies or accounts you know him to control receive money?”
“Nothin,” said Margy.
Good, he thought. He flipped through the stacks, more to get the feel of the checks than anything else. She had made two copies, a set for Stern and a set for herself, and had a clerk stamp an identification number on each. You did not need to teach Margy anything twice.
Stern referred again to the subpoena. Because many of the records were already here, Stern last week had taken responsibility for assembling the trading records which the prosecutors had asked for. The remaining documents had been delivered to Stern’s office, and in preparation for today he had carefully gone into each pile and replaced, just where he had found them, the order tickets the government was surely seeking—the four or five dozen which John had written. The bundle of documents, copied and numbered like the checks, waited now in a white transfer case. He showed them to Margy, then had Claudia summon one of the young men in the office, who would deliver the records to the grand jury room prior to their arrival.
Stern read aloud the government’s last request for records of the Wunderkind Associates account.
“The strange port.” Margy had her briefcase on her lap and removed a manila folder. Maison Dixon, like many houses, used what was called a consolidated statement, in which purchases and sales, confirmations, margin requirements, and positions were all reported together. The computer spat out a single form, which was mailed to the customer any time there was account activity. The second leaf of that computer form remained at MD and was microfilmed. Opening the folder, Stern was surprised to find the original statements which should have gone to Wunderkind.
“It’s strange,” she said. “See the address.”
The documents said “Wunderkind Associates” at the top, and “[HOLD].” He asked what the notation meant.
“Hold,” she said. “You know. Like ‘Don’t mail it, I’ll pick it up.’”
“Does that occur often?”
“Sometimes. Fella’s gettin a divorce and don’t want his wife countin up everything he owns on her fingers or toes. Or he thinks the IRS is openin his mail. Or he don’t think much of the mailman in his neighborhood. Lotsa reasons.”
Stern nodded. “And these were never picked up?”
“They were sittin right in the file.”
“Chicago account?”
“Kindle,” she said. “05.” She lifted her bottom from one of the cream-colored chairs to point to the account number. “Greco found them.”
“Peculiar,” said Stern.
“Oh, that ain’t what’s strange.”
“No?”
“Look through ’em.”
He did, and as usual noticed nothing.
“Look at the activity. Look at the balance. Remember? This is where he’s puttin all that money he makes tradin ahead. I thought for sure he’d be cashin out these positions he’s transferrin in, havin us cut him one check after another. You know: take the money and run.”
Clearly, however, that was not what had occurred. The statements portrayed frequent trading, two or three movements a day. There was no unusual concentration of positions. T-bonds. Silver. Beans. Sugar. Yen. Those were the favorites, but all were frequently traded, often with multiple moves each day. Stern read to the end in February of that year.
“He lost money?” asked Stern.
“Not just money,” said Margy. “Everything. There ain’t a red centavo that got stole that didn’t end up goin right back into the market. Hell, he didn’t just lose all that. He lost more. Look at the last statement.”
Stern turned the pages again. On the final statement, in boldface, there was a deficit balance reflected of slightly more than $250,000. Trading on margin—borrowing money from the house to put on positions worth more than what you had invested in the account—it was always possible to lose large amounts quickly, and it had happened here to a fare-thee-well. Everything had been sunk into sugar contracts, which had come to ruin over several days in February when the market ran wild. By the time Mr. Wunderkind had extricated himself, the loss was enormous, a quarter of a million dollars more than the equity he’d had in the account to start with.
“The debit balance was paid off?” he asked.
“That’s what the statement says. All 250,000 bucks. I never heard nothin about it.”
“Should you have?”
“You betchum,” said Margy. She sat up a little straighter. “Deficit balance over a hundred grand? Either I hear about it or it goes straight down to Dixon from accounting.”
“Ah,” said Stern. He wondered. Dixon could have probably written off a debt to the house like this with a single stroke of the pen. But the statement showed funds received—Wunderkind had paid off the money he owed MD.
Stern stared at the papers and, with the familiar frozen precision of his most single-minded attempts to understand, went over it all aloud. Margy nodded each step of the way. The man had self-consciously placed orders ahead of customers, a major infraction. In order to hide that, erroneous account numbers were used and the transactions, taken for mistakes, were moved to the house error account, where substantial profits of tens of thousands of dollars on every pair of trades accumulated. Then, in order to gain control of these illegal profits, the man had placed additional orders, once again making deliberate errors in the account information. The result was that the error account paid for the trade. Then the new position was moved by various accounting entries to this new account.
“Wunderkind Associates,” said Margy.
“Wunderkind Associates,” said Stern. “And then, instead of simply closing his positions and making off with all these ill-gotten gains, he traded on them. Repeatedly. And badly.”
“Right.”
“So that, at the end, the net result of dozens of unlawful transactions, all of them wickedly clever, is that they have cost him approximately a quarter of a million dollars.” r />
“That’s what the paper says.”
“Not right,” said Stern resolutely. He knew, with a conviction durable as steel, there was more to it than this. These shenanigans in the Wunderkind account were one more interim link in the long, twisted chain. Stealing this money had turned into a sport for Dixon, his version of the steeplechase. How many hurdles could he take at a canter? Stern decided at once that the losses had to be phony. There was ample precedent for that. From what Stern understood, at the end of every year there were dozens of such transactions on the Exchanges, designed to fool the IRS. In violation of every rule, trades were arranged off the floor and then carried out in the pit as a kind of second-rate pantomime, so that a loss was recorded for tax purposes, while the position, through one device or another, eventually returned to its original owner. No doubt, something like that was involved here. Perhaps there was some record Dixon meant to set: most laws broken in a single theft. Stern sat there shaking his head, convinced he could never work through the final intricacies of this scheme. On the other hand, it was possible the prosecutors would not manage that either.
“I am not certain, Margy,” said Stern at last, “that I see this as the problem you do.”
“Oh,” she said, “this ain’t the bad port. This is the strange port.”
“Ah,” said Stern, and felt his internal elevator descend another floor or two, not as far or as steeply as he might have expected. He was growing accustomed to this. “And what, Margy, is the bad news?”
“This thing”—she hied half out of her seat to indicate the subpoena—“asks for all the account information. You know, the account application, risk disclosure statement, signature documents.”
“Yes. They want to prove whose account this is.”
“See, that’s why we got a little problem here, Buster Brown. Cause I can’t find even an itty-bitty scrap of paper to show who these Wunderkinds are.”