Tuesday, December 23, 2008
Waving a letter that Josh had purportedly written almost two years earlier, one that attested to the bonafides of long time close friend Jake Bronstein, a flamboyant Las Vegas entrepreneur with interests that extended from indie film financing to pay-day lending, the two “Feebs” claimed that Berman, a former stock exchange floor trader- turned-deal maker, was “single-handedly responsible” for defrauding a Hollywood bank out of $25 million in connection with the botched remake of a 1940’s film noire based on a novel by a Pulitzer Prize winner.
Aside from the starkly ironic similarities between the protagonist in this real life story and that of the main character who sold his soul to the Devil in the award-winning novel, this true-to-life story’s principal character, along with his cohort, were to be indicted by a federal grand jury on various charges, including conspiracy to commit bank fraud, all as a result of Josh's pal allegedly reneging on a promise to invest in the production of a major Hollywood movie. Because the “remake” of film included a cast of world famous actors, leading producers, and high profile Hollywood banks, the story of the arrest was reported by entertainment news media around the world.
Booked and fingerprinted within two weeks after his first encounter with the Feebs, it took only a matter of days before Berman was forced to resign his partnership with a venerable Wall Street firm; so much for the concept of innocent until proven guilty. Unemployed, soon to be living in a state of emotional despair, and surviving on borrowed time and borrowed funds, as Berman’s saga unfolds, it opens the doors to true tales of conspiracy, Hollywood corruption, zealous prosecutors, mobsters, and fatally frantic acts.
To casual observers, Berman’s case was one of thousands of seemingly innocuous files within the black hole of the U.S. criminal justice system. But for Berman, the circumstances were anything but mild; his life was on the line. Although the letter that displayed his signature appeared incriminating, the charges were trumped, and it took him little time to realize that he was being used as a scapegoat to divert attention away from a Hollywood banking scandal, one that important people on both sides of the law needed to keep under wraps.
Berman’s options were limited. According to each of New York City’s top-rated white collar mouthpieces that reviewed his case, including the world famous defense lawyer that represented White House Chief of Staff Scooter Libbey, the letter was a smoking gun. Without the bank roll necessary to underwrite a fully-armed defense, including gumshoe resources to secure the proof he needed to vindicate himself, Berman struggled to find a lawyer whose opinion differed from all the rest. They all said the same thing; the best course of action was to plead guilty to the convoluted charges and accept the fact that he faced Federal sentencing guidelines that called for a minimum 21-36 months in prison, not to mention the wide impact of being branded a convicted felon for the rest of his life.
His other choice was equally unpalatable; he could plead not guilty and go to trial with a half-baked, under-funded defense strategy spearheaded by the only criminal lawyer in New York who was actually willing to try the case. But the risk of this strategy was crystal clear; it would otherwise expose Josh to a jury of his hypothetical-only peers within a climate of proletarian rebuke to the excesses of Wall Street-related greed, and where everyone had their cross hairs on the sharpies that were minting money and further separating the divide between the haves and the have-nots.
Between the headline news of the day spot-lighting corporate bankruptcies that forced thousands to lose their jobs, the scandals surrounding Enron, Tyco, Martha Stewart and the rest, the media talking heads like Bill O’Reilly were all chanting the same “hang ‘em high” mantra instilled by born-again George W. and his “get-tough-on-crime”, hypocritical cronies. When it came to purported financial crimes, everyone was screaming for blood, and it didn’t matter whose. Prosecutors angling for notches in their gun belts were encouraged to shoot first and ask questions later, and they were primed to serve up raw meat and slow cook anyone that might satisfy the hunger for white collar criminals.
Even if not as appetizing as a flambéed Frank Quattrone, or a sautéed Dennis Kozlowski, the otherwise ‘front burner’ dishes of the day in the Eastern District US Attorney’s office, Berman was a juicy morsel for the Feds. He was the antipasto portion of a meal that would hopefully lead to a main course of his buddy Jake from Las Vegas, who the feds wanted to have grilled on a skewer, and if they were lucky enough, they might even land a few Hollywood big shots. The Feds figured that Berman was already caught on the hook, and with his blood in the water, he could be used to draw in a shark, and help, voluntarily other otherwise, to put his pal from Las Vegas into a steel cage.
In addition to having the playbook for what seemed like a slam dunk case against Berman, the government also owned the home court advantage. The federal courthouse where a potential trial would take place was located on the outskirts of civilization, in the town of East Islip, New York. To save money on transport, jurors were typically pooled from the blue collar community nestled against the East Islip off ramp of the Long Island Expressway, where the average house sits on a 20 x 50 ft plot, and populated by low income renters and sub-prime mortgage home owners that struggle two and three jobs just to cover their monthly nut, all the while transfixed by the parade of BMW’s and Mercedes zipping past Exit 52 and carrying mini-millionaires to and from their beach front mansions in the Hamptons, merely 10 miles away.
If he chose to take his case to trial, Berman would be tasty enough for the jurors all right; after all, his profile was the antithesis of those that would be selected to determine his fate; Jewish, works on Wall Street, lives in an exclusive community on the shores of Connecticut where the average house sold for more than a $1 million, and he made more money in one year than all of the jurors combined. If going to trial, his legal strategy would have to focus on getting a hung jury. At least one of the jurors, he thought, would have to believe that he was a pawn in a much bigger game of chess. If that didn’t work, than Berman would hang; the penalty for putting the government through the exercise would result in an even lengthier mandatory jail term, perhaps as much as five years, and a veritable economic death sentence that would ruin is career and devastate his family.
The options offered by the legal system were simply unpalatable, and the options of circumventing the legal system could prove deadly. Berman was facing the fight of his life, and desperate times called for desperate measures.
Over 25 years working on or around Wall Street, Josh had skated on thin ice plenty of times; it was a high risk business, and Josh was an Olympiad in risk.
Throughout a career that had more peaks and valleys than the streets of San Francisco, and more potholes than Manhattan’s FDR Drive, Josh would more than once have a front row seat to a stage full of schemers, in a production whose scenes would cover everything from stock market manipulation to phony investment schemes, to off-shore insurance companies that never pay claims, and to the world of Hollywood banking, where movie financing is fiction and fraud is fact.
He had become acquainted with a full deck of players, some were shrewd Kings and business moguls, and some were unsavory jokers who preyed on the greed of others. It was part of the territory, and despite the temptations to push the envelope, he never crossed the line. He was raised in world where your word is your bond and your reputation is the only thing of value, and Josh knew better than to take a plunge that would send him up shit’s creek. Or at least he thought so, until that one fateful Monday morning in October when the FBI came knocking on his door, introducing him to the bizarre and hardly just world of the U.S. criminal justice system
Based on the true story of a man whose life started with a silver spoon in search of the brass ring, and where one seemingly minor transgression would set off a chain reaction of events, indoctrinating him to the world of federal persecution, witless government agents, white and stained collar crooks, and ultimately, to plots of extortion and murder.
Tuesday, December 16, 2008
The only disappointment that you'll experience is that you won't find those parts online.
The story rapidly unfolds from where you've left off. There's violence, there's gratuitous sex, there's the sweet taste of revenge, and there's justice. Maybe not the type of justice that our esteemed court system is supposed to uphold, but justice none the less.
Leave a comment. We'd love to know your thoughts..
Sunday, December 14, 2008
I had spent the night tossing and turning, and when I got to work the next day, I made another stab at burying myself in RTM work. I had culled enough research that should give Sercowitz a good foundation to work with, and I’d simply have to wait to see what he thought it all meant and how to handle it.
There wasn’t much point in reaching out to Jake today, I’d let him mull on the articles that I had sent the night before, but I kept an eye on the IM buddy list to keep tabs on whether he was in his office.
At 4 pm, Sercowitz phoned me.
“Mr. Berman, Morris Sercowitz here. I wanted you to know that I just spoke with the Assistant US Attorney, Mr. Shulman.” His tone and tenor remained consistently flat.
“And.?” I said.
“He seems to be a pleasant enough fellow. But, we don’t need to discuss this on the phone. Why don’t you come to my office tomorrow afternoon, lets say 5 pm.”
I didn’t like his bedside manner, or the cryptic response, and the hairs on my neck bristled as the paranoia meter ticked up another ten degrees.
“How about I call you this evening? I found a bunch of interesting things on the web that might help.”
“I’m glad you’re doing your homework. Print out whatever you have, and bring it with you tomorrow; our conversation can wait until then.”
Since Sercowitz had more than a few mobsters as clients, I could only surmise that its better to be safe than sorry when communicating with clients, especially in these days, when the FBI was apparently doing a great job of exploiting the new wire tap guidelines within the recently introduced Patriot Act. News reports in the past few months had pointed to least six different corporate white collar cases and five mob-related cases where the Feds had tapped phones using Patriot Act–related requests. The 9/11 attacks had otherwise given the US Attorney carte blanche in pursuing anyone and everyone for anything.
As I was getting ready to leave, my private line rang.
“This is Josh Berman.” I answered.
“Glad to hear your voice. “I guess you haven’t been put behind bars yet.” It was Seth.
“That’s very funny” I replied.
“Just checking in, and if you’re headed back to Connecticut, I thought I’d offer you a ride home. I could use some entertainment by hearing the full story.”
“So far I’m not entertained, but I guess you will be. Maybe even intrigued” I said. :Based on what I’m finding, there might even be a retainer assignment for Knoll.”
“If only I thought you could afford it.” He said, lampooning me. “Our retainer would scrub Charlie’s college tuition. Why don’t you meet me at my office, and we’ll drive home together.”
Seth’s office was on 56th and Third Avenue, and by the time I walked up the fourteen blocks from my office, he was standing outside the building waiting for me.
He greeted with me a warm and sensitive, “Gee, I hope you can move faster on the court this weekend than you can walking a few blocks.” At least I was still on his invitation list.
We crossed over to the garage on 55th and his brand new, red Miata convertible had already been pulled out to the curb.
“I hope you don’t use this car for stakeouts” I said.
“Actually, this fits in pretty well when considering how many Wall Street engagements we have at the moment. Checking out hedge fund managers is a brisk business these days.”
Knoll’s list of services looked like a Chinese menu, more than two dozen practice areas that included everything from evaluating facility security systems to counseling on foreign travel to background checks, and the hedge fund industry was growing exponentially, providing a burst in business for Knoll.
The number of non-regulated money managers marketing esoteric strategies, an arena once dominated by the George Soros’s and the Paul Tudor Jones’s of the industry, had grown from less than a few hundred to more than a thousand in the past three years alone. Most were domiciled off-shore so as to avoid regulatory, and in many cases tax oversight, and all were promoting outsized returns. The sizes of the funds ranged from $5 million to over a $1Billion, and the common denominator was secrecy. With so-called sophisticated investors seeking higher ground after the Internet IPO bubble had burst in early 2001, the hedge fund industry was attracting tens of millions of dollars every day and that money was going into discretionary accounts managed by newbie traders specializing in derivatives and exotic fixed income instruments.
The combination of greedy investors, both institutional and ‘high net worth”, and their acquiescence to being provided limited information about the respective funds’ workings provided a perfect opportunity for Ponzi schemes; exactly like the world of Indie film financing. More than a few hedge funds had already blown up, leaving investors with nothing more than phony account statements, a disconnected phone number, and only speculating where their money had actually gone.
Knoll had carved out a niche doing background checks on hedge fund managers, and Seth’s partners had tapped me more than once to help them discretely network around the Street to uncover any personal tidbits about aspiring fund managers, the majority of which usually have at least a few years experience working for a bulge bracket investment bank, or on a trading floor. Wall Street is a small place, and odds were that six degrees of separation became closer to two degrees, and Knoll knew that I had a solid network of relationships in that arena.
Seth got onto the FDR Drive at 61st Street, and the rush hour traffic was moving at a snails pace. The story that Seth had waited to hear was a relatively short one so far, and in the half hour that it took us to cross over the Triborough Bridge, I had shared with Seth most of what I knew.
“Well, Ollie, You’ve certainly made a fine mess of this one.” Seth said, in his Stan Oliver mocking manner. “Your buddy in Vegas certainly did you no favors when he asked you to do him a favor.”
Seth was only a few years older than me, but he felt obliged to take on a parental role.
“Look,” he continued. “All kidding aside, as a former prosecutor, I can only tell you that FBI agents don’t need to have a brain in order to make your life miserable, however irrelevant a role you might have played in the grand scam, so to speak.”
“I didn’t scam anyone, Seth. They all knew that.”
“Actually Josh, it sounds like you were scammed, and you weren’t even smart enough to get paid anything for your trouble. I thought I taught you better than that” he said mockingly.
I decided not to rebut.
“OK, you didn’t intentionally defraud anyone.” Seth said. “I’m not sure whether that matters. That’s something that a good lawyer can help you with.
“And trust me, while we do have several former Bureau people at Knoll, we’ve turned away more former FBI agents than I can count. Based on your description of the ones that are on your case, it sounds as though they’re pretty much the normal field agents; guys that like to flash badges and show holsters.”
“That said,” he continued, “Given the jurisdictional issues, which I’m really not an expert in, if the agents that came to you are from Long Island, and a government-owned facility on Long Island was stiffed on a bill, and your old friend Baldson was shouting “Call the FBI”, and then the FBI gets hold of a letter that has you making a false representation on a federally-chartered Bank’s letterhead, they don’t need much more in order for them to close their file, go back to their box of donuts, while you dine on bread and water.”
“For something as ridiculously low level as this?” I asked.
“The Feds are doing a lousy job of catching terrorists, so they’re busy bunting and trying to score a few runs by bagging some Wall Street types”
“So what you’re saying is that I should just let myself out of the car while its moving and let the truck behind us trample me?”
“I’d suggest that, but I’d probably get some kind of a moving violation, and I still need a tennis partner this weekend, you’ve got the best serve of anyone that I know.”
I sat glumly for the next few minutes, staring out the window as we headed toward the Merritt Parkway.
Seth reached into the Miata’s console and extracted a leather cigar holder, it was dark purple and it had his initials branded on the outside. Seth was a cigar aficionado, and he loved saying “It might fog up the room, but it clears the head.” He unzipped the flap, and even though the top to the convertible was down, the tobacco’s aroma engulfed us.
He extended the pouch to me and said with a smile, “A dying man always requests a last smoke. Take one, it’s a Cuban. Just came in, courtesy of our office in London.”
“No thanks. But as long as I’m terminal, I’ll just have a cigarette while you stick that big thing in your mouth.”
“You know.” he said, “Some people say that the size of a man’s smoke tells as much about him as the size of a dog’s feet.”
“And if you’re wife hadn’t told my wife that what you lack in size, you make up with enthusiasm, I might be impressed.” I responded.
He laughed and deftly clipped off one end of the cigar with a sterling silver Dunhill cutter, extracted a thick wooden match from the pouch and lit up. I lit up one of the remaining Marlboro Lights that I had.
While enjoying his stogie, Seth had apparently been pondering as we continued to drive, and after ten minutes, he turned to me and more thoughtfully than usual said, “While you’ve been sitting there sulking, I’ve been thinking.” He was turning serious.
“Aside from what was presumably a momentary lack of judgment, from the sound of it, you’ve tripped over a can of worms, and at least some of the worms are bigger than the ones in a Godzilla movie.”
“I know about HLO.” continued Seth. “We actually had to fire them as a client a few years ago. The guy that runs that shop, Morowitz, is a pretty shrewd operator. I don’t remember the exact details, but he was involved in some kind of litigation and wanted one of our LA field staff to do some things that even we don’t do.”
“More than rifling through garbage I take it.”
As intrigued as I was, Seth would have expected no less from me. A few years ago, The Wall Street Journal ran a story that one of Knoll’s people had actually been caught rifling through a garbage bin outside the townhouse belonging to a supermarket chain’s CFO. The accountant was allegedly cooking the books in order to bolster his own bonus.
“Josh, rifling through garbage is not only legal, but you’d be amazed how productive it can be.” Seth said, with a smile.
“Anyway, when the head of our LA office told Morowitz that what he wanted was out of bounds, Morowitz called Jules to complain. Jules told him to take his retainer back and stick it up his ass, and also told him that he’d be better off hiring a good criminal defense lawyer with the money.”
“Wow.” I said. Jules was Knoll’s name founding partner, and his picture had appeared on the front page of Forbes Magazine, wearing a fedora and trench coat.
“Wow is right. Aside from him wanting us wiretap a bunch of phones of people he does business with, he wanted us to use some scare tactics as a way to intimidate a potential witness in the lawsuit. That kind of stuff is for amateurs, not that there aren’t PI’s that do that crap, especially in Hollywood. Some guy named Pelican has made it a niche, that’s where Morowitz ended up taking his business too.”
“Sounds like I should be hiring him”, I said, trying to sound sarcastic.
“Not. You know that we have our own ways. All of this means that you’ve once again found yourself dealing with some nefarious types, but this one is very well insulated and he has very deep pockets.”
“So, you think there’s a big picture strategy here?” I asked hopefully.
“Maybe. The connection could be coincidental, even if I’m not a big believer in coincidences. But, if the Feds have incriminating evidence against you, then they’ve got you with your pinky in the cookie jar. But, the Government is always looking to cut deals with cooperators, so they’re probably going to pressure you to finger your friend Jake. If he can finger somebody else, all the better. If you’re lucky, they’ll give you your pinky back.”
‘Not happening.” I said. “For one thing, my life insurance policy isn’t paid up”, I said half-jokingly.
“For another thing, Jake’s already started funding the legal expenses, and I certainly don’t have an extra hundred grand lying around. And, if this winds up with my pleading guilty to something, I’ll be out of the industry, and the only job I’ll be able to get is working in Jake’s food warehouse in Vegas. I’ve got nothing to finger him with anyway, and even if I did, I don’t know that I would, we’ve been friends way too long.”
“Sorry for saying this, but he’s not the type of friend you need to have.”
“Maybe, but that’s not the point.” I debated. “They made the fucking movie without him. It was actually Glassman, along with the insurance company guy and the other guy from HLO that dictated the letter.”
“Like I said, it’s a mess, but that’s why lawyers get paid the big bucks. By the way, have you connected to Tom Russo?”
“I spoke to him, but he can’t see me until Friday. At the moment, I’ve got Maury The Mobster Lawyer” on my team, he s already made the first outreach to the prosecutor. I’m meeting with him tomorrow afternoon to find out more.”
“Well, you’re at least doing as good a job as possible in staying in front of this mess, and I’m always impressed with your research skills. I don’t know who Sercowitz is, but I’m guessing you’ve already checked him out, but I’ll ask around about him too. I won’t tell you which lawyer to go with, but I do know that Russo is one of the best, and his previous life in the US Attorney’s might be helpful. Keep an open mind. It’s an important decision.”
Seth then added, ‘Josh, it also sounds like we’re both merely speculating; you haven’t even spoken with the prosecutor in charge of this. If and when the time comes, we can have your lawyer get on the phone with Mike Friedling in our LA office, I’d think that Mike would be more than happy to lend a hand, especially if Morowitz is involved.”
“Right now, I’d like a helping hammer, the kind that moves after you pull a trigger. But I appreciate your advice.”
“That’s not a place you want to go to, Josh. With your luck, you’d shoot yourself in the foot.”
“Maybe,” I said. But the PI you introduced me to in Philly a few years ago was kind enough to take me to his pistol range. I actually outshot him.”
We turned the conversation to our kids latest activities, and before long, Seth was pulling his Miata into the Westport train station parking lot so that I could pick up my car. When I was getting out of the convertible, he tossed his spent cigar ten feet through the hoop of an adjacent garbage can, and said, “No more smoking for the rest of the week, we’ve got a big match on Saturday and I need you in one piece.” He winked and drove off.
After I parked the Escalade, I could hear music coming from the back of the house. Charlie and Lizzy were most likely taking advantage of the pool before the weather started to change. Instead of interrupting them, I headed inside through the mud room. Lorna was busy at the sink and didn’t bother to look up. She wasn’t about to get over the experience from the day before, and I wasn’t going to incite her by telling her about my call with Alan.
When I went to pour myself a scotch, she did say “Just so you know, I’m pretty certain that Charlie shared yesterday morning’s event with Lizzy and Michele. You shouldn’t be surprised, they are her best friends.”
Lorna almost enjoyed pouring salt on the wound. Not only was Michele the school gossip, but her Dad and I had been buddies since the time the girls were in grade school. He was a serial CEO, with dozens of connections on Wall Street and throughout the venture capital community. He’d be one of the long list of people I didn’t want knowing that I was the target of an FBI investigation, let alone the parents of half of Charlie’s schoolmates.
I went to my study and phoned Sercowitz’s cell phone. I wanted to update him on what little I had learned about the film, and why I thought the FBI might be interested, as well as my conversation with the Feeb earlier in the day. I also wanted to find out what, if any progress he had made on his end.
An hour later he phoned me back and said that he had left a message with the AUSA assigned to my case, but hadn’t actually spoken with him. He was nonplussed when I expressed my frustration about the FBI shouting “fire” while visiting my former workplace, and otherwise poisoning my reputation. He was however intrigued by the articles that I told him I found on the Internet, and he instructed me to print them out and bring them with me the next time we met. He also told me that I had to zipper my lips the next time the Feebs call, and to point them to him.
I held off on trying to connect to Stuey. Instead, I went to my study and started a second night of digging into the Internet for anything additional I could find about Glassman, Nardone, Hutkins and LHO. And I found more crumbs about the crumbs, ones that I had overlooked the night before.
In a website focused on science fiction movies, I found an interview of Sir Tony Hipkisn, the film’s big star, it was from just three weeks before.
“Sir Tony Hipkin told SCI FI Wire that the new film version of the Pulitzer Prize winning novel, in which Hipkins plays the role of the lawyer representing a writer who sold his sold to the devil will never be finished. “They pulled the money out, apparently, so it’ll never be seen,” Hipkins said. “The producers have no money to finish it.”
Great, I sarcastically thought to myself. The film was made, but it wound up on the cutting room floor because it ran out of money before it could be completed.
My next query hit what I thought was a small jackpot.
I came across a news release from May, only six months earlier. It had been put out by a German entertainment company, one whose shares were publicly traded on the DAX Market. The news release was in German, so I ran a language translator on the website, and even though the translation software wasn’t perfect, it was good enough.
The company’s release focused on their most recent quarterly earnings statement, but also included a lengthy reference to a RICO law suit the company had just filed in Los Angeles District Court. The defendants in the action included the completion bonding company and a former parent bank of HLO. Morowitz’s HLO had apparently been bought and sold three times since its formation in 1989. The suit in question was connected to a time frame shortly before SecPac, its current owner, had acquired it.
According to the announcement, the plaintiff entertainment company had apparently agreed to provide 47% of the financing required for a slate of ten different HLO film projects over a two year period. In consideration for putting up almost half the financing, they’d be receiving the European distribution rights to each of the films. They apparently since discovered that the budgets on each film had been padded, in some cases by twice the amount that was actually spent making each film. The lawsuit charged that two of defendants, HLO and the insurance company, had conspired together to inflate the budgets, as in each case, the bonding company had provided the completion insurance and their insurance fee was based on the budgeted amount of each film, and they were necessarily was privy to the respective project budgets and accounting statements.
The suit was seeking $225 million in damages, $75 million representing actual ‘double billing’, and $150 million in punitive damages, including attorney fees. The Wall Street analysts that covered the entertainment company apparently thought the suit had strong merits, as the company’s share price surged 21% on the day the news release was issued.
Then I searched for Global Film Finance’s website, Cardone’s insurance company. When I found the URL in a film industry database, I clicked on the link, but the return page said “Site is Temporarily Down”. It was either being re-designed or something else had happened.
More than interesting, I thought to myself. $75 million in budget padding that tied together two of the groups that participated in the drafting of the letter. The article didn’t mention any specific film titles, but I thought there must be a link to Glassman as well. Aside from the obvious fact he had been doing deals with HLO and Cardone in the past, I had also discovered that Glassman’s production company, “Pushing Edge Productions” the one that was producing the movie, was a US subsidiary of another German entertainment company.
As stimulating as my research was proving to be, it didn’t explain who had instigated the FBI to come hunting for me, or where I fit into any of the possible scenarios. It was obvious that the film production had been green lighted, and apparently without any reliance on Jake making any investment. The fact that the movie had temporarily run aground was hardly unusual, but it smelled like someone was trying to collect on the insurance policy before the shoe store had burned down, and I was being made the fall guy.
I sat back in my chair and tried to figure out how The Letter had even gotten into the hands of the Feebs. I reached into my briefcase and took the file that I was becoming a bit heavier by the day, and pulled out the copy of The Letter that the Feebs had provided, along with the subpoena. There had to be a clue here.
How I had managed to miss it at first glance was beyond me, but I just found another crumb. On both the top part of the copy, it displayed time and date stamp, along with the sender’s fax numbers and the recipient’s fax number. The copy the Feebs had gotten hold of had apparently been one that had earned more than a few frequent flyer miles. On the top part of the copy, I could make out a date stamp of 05.01.2001, with a 213 area code. I did a reverse look-up on Google and discovered that the phone number belonged to Danny Glassman. On the bottom part of the page, there was a separate date and time stamp, it displayed “Sent from Louis Morowitz Organization May 20, 2001.” The recipient fax number was a 486 area code.
Why would anyone be faxing back and forth this letter five months after the fact?. Duh? I thought to myself, that’s when the shit was apparently hitting the fan with the film production.
On Wall Street, some traders, after making a bad trade, make the irrational decision of “hiding their trading ticket in a drawer.”, or not reporting it to their firm for processing. No different than hiding dirty underwear under a bed, but eventually, its discovered.
Somebody at HLO, obviously Glassman’s partner Lutkin, had hidden this particular letter in a drawer, and decided to pull it out months later, as if they had discovered the dirty laundry. Or maybe, Morowitz was in on the whole thing at the outset. After all, he had green lighted the twenty five million for the project. If it was starting to implode in May, maybe he had decided to put in a claim with the insurance company that provided the film completion bond, and maybe he was looking for a scapegoat.
The only thing I didn’t know was whether Jake knew about all of the shennigans that these guys were up to, or whether he was just a bit player, and perhaps didn’t appreciate the scale of what his film finance friends were up to. I emailed Jake the links to the articles, as it might be information that he could leverage, but I didn’t point out what I discovered, that the letter had been bouncing around between Glassman, LHO and who knows who else months after it was supposedly shredded. I’d save that bit of news for the next time I talked to him.
One thing that I was certain of, if Jake thought that he was being set up, or had been double-crossed, or was being made a fall guy, whoever was responsible would be getting more than just a long drive into the Nevada desert.
And if I was going to go down, I’d make sure to bring others with me.
I hadn’t actually slept for more than an hour, and when I crawled out of bed at 5am, Lorna, who was half awake, said “Nobody with badges had better be showing up at the door this morning, Josh.” My always loving and supportive bride.
Before I turned on any lights, I did look through the curtains to see if there were any cars in the driveway, or on the street, but everything was quiet. On the ten minute car ride to the train station, I spent more time looking in the rear view mirror than I did watching the road in front of me.
I was able to grab about twelve minutes of shut eye during the fifty five minute train ride to Grand Central, and when I exited the station, I took a slight detour around the block before heading into the office, casually looking over my shoulder every twenty paces or so, just in case the feebs had decided to pull a surprise visit.
After passing through the security turnstile in the building lobby and taking the elevator up to the trading floor, I found myself, as usual, one of the first in the office. Bobby was in his glass cage reading the Wall Street Journal and checking his Bloomberg terminal for email messages, and Mario was the lone body on the trading floor, distributing the morning research comments published by the analysts after the close of yesterday’s trading.
The red message light on my private phone was blinking. I couldn’t imagine who would have called me so early, but when I retrieved the voice mail, I could tell that this would be another long day. The message was from my pal, Alan Hochstein, the CTO I had recruited for my gig at the start-up electronic exchange. After The Bank had acquired the company, Alan was quickly moved up the ranks of the parent company and had ascended to the number two technology job at The Bank.
“Hi, Josh. Alan here.Wanted to check in on you. Give me a call on my cell when you can.”
When the start-up was stumbling before it even got out of the gate, it was me that more than casually observed that the software developer hired by the company’s founder was completely out of his league, and that we needed to bring in a technology project manager that could bring much needed leadership to the company’s development process.. We had burned through $10 million of VC money and we were months behind schedule, and however much the founder/CEO was resistant to change pitcher’s, the VC’s tapped me to find an answer.
Alan was introduced to me by a head hunting boutique that specialized in Wall Street geeks. His profile indicated that he was a gun-for-hire project manager, mostly short-term projects, and although Alan didn’t have any experience working on Wall Street, no less a college degree, his creds were very solid. According to the snapshot forwarded by the head hunter, over the past eight years, Alan had extinguished technology-related fires for two major cities, one federal government agency, and a telecommunications company. There was very little information about his prior experience, and given that he was only a year younger than me, the void on the resume seemed a bit cryptic, but nothing that would cause me to balk as far scheduling an interview.
Half-way through the one hour ‘job interview’, which included my sharing my background, the company’s start-up story, and the state of our current software development, his observations about our dilemma, and his very calm, but focused mannerisms made it poignantly clear that he was the answer to our problem.
He was the furthest thing from being a ‘geek’. Not just because he was nicely tanned, when most techies are pale from being shackled to computer screens, or because his 155lb, 5’9 frame was outfitted in a stylish pin-striped suit, pale blue French collar shirt with gold cuff links, Hermes ties and soft Italian loafers, and all complemented by an IWC Aquitimer wrist watch; one that works just as well at a Black Tie event as it does 2000 meters below the sea. Alan’s model had the understated rubber wrist band instead of the titanium band, all a stark differentiator when compared to the casual dress code favored by techies; khaki pants and button down shirts.
Alan was perfectly poised and obviously worldly. He had come from an affluent family in Westchester, NY, and when he was a teen his Dad had moved the family to Beverly Hills Alan told me that his resume was a “bit light” because he had spent a number of years after dropping out of college to travel and see the world, including spending a year in Tibet. He volunteered that his lack of a college degree was simply a function of his never encountering any teachers that were particularly inspiring.
When the topic of his interest in aligning with a start-up was broached, Alan’s dispassionate response included his telling me that he wasn’t particularly enamored by what he read about the Wall Street culture, and he wasn’t interested in a long-term assignment, merely saying that “staying in one place for too long isn’t a strong suit.” That explained why he was still single at the age of 40, when most of us were married, more than a few for a second time. I didn’t find the answer any more mysterious than the time gap on his resume, but simply figured that he was merely posturing, which was totally fine. From my perspective he was a combination of Doogie Howser and David Carradine’s Kwai Chang Caine character in “Kung Fu.”The VC’s met with Alan the next day, and immediately green lighted me to extend Alan a job offer, with the understanding that he wouldn’t be shackled for longer than need be.
The rest is history, as they say. Alan and I had not only become close friends and confidantes, but as I predicted, he became the company’s savior. He had literally wiped the white board clean, and quickly recruited a swat team of techies that in less than six months, delivered one of the most powerful electronic trading platforms that Wall Street had ever seen. And, despite Alan having said that he wouldn’t stay around long, he ended up relishing the opportunity, as he had become widely-respected by a peer group that oversaw the information technology workings of the world’s most formidable investment firms.
When The Bank acquired the company a year later, it was on the condition that Alan sign a five year employment contract, with aggressive non-compete clauses. They had determined that he was an asset that was not only integral to the company that they were buying, but the acquisition team, led by one of The Bank’s most senior executive committee members, had the same gut instinct about Alan that I had when he and I had first met; he was already being groomed for a senior job overseeing the world’ largest bank’s technology platform.
While Alan and I had stayed in touch often after I had been recruited away from The Bank, his rapid ascension made him a very busy guy, and the frequency of our catching up with each other had diminished to once every six weeks. I didn’t think it was a coincidence that he had called to “check in” on me.
It was only 7:15 in the morning, and I guessed that Alan had called me on his drive into Manhattan from new McMansion inWestchester, the one that housed his new, much younger Tibetan bride and her two kids that came with his mid-life marriage.
In my new state of paranoia, I left the trading floor, went back downstairs and rang up Alan on my cell phone.
“Helloooo my dear and always dull friend Josh” he answered, my caller ID giving me away. He was always upbeat.
Alan and I shared a similar degree of cynicism about the world around us, and neither of us were shrinking flowers, so we’d often drip in sarcasm.. Since the time we had met seven earlier, we had countless witty repartees in which we chided each other, our way of demonstrating our respect for one another. As much as he enjoyed flexing his wit at my expense, he had also confided in me on select occasions, and told me that however smart he was, he was always enamored by the situations I found myself in, and out of, and that he had great admiration for me.
He had been a first hand observer at how my career had zig-zaged since I had left The Bank, and he had even invested in an entertaining website that I had produced while I was in between jobs. It was a Bloomberg Meets Playboy internet “destination”; an R-rated site that provided live market data, and live business news commentary that was video cast by a team of sultry looking babes in revealing business-sexy outfits. Of course, Jake had invested in that too, and it was actually a big hit; the site had several thousand daily visitors, and had won lots of write ups in main stream press, albeit for a short period of time.
Alan had also championed my being hired by The Bank as a consultant, to help them sell licensing deals for the trading system platform that we had built.
“Hi back to you, Mr. Big Shot. Its always nice to hear your sweet, charming voice at the dawn’s early rise. Shouldn’t you already be lording over your 3000 reports instead of chit chatting with old and forgotten buddies?” By that time, Alan was overseeing half of The Bank’s world-wide technology staff.
As close as Alan and I had become, and notwithstanding the fact that he was one of only five or six people that I felt a true bond with, I wasn’t ready to tell him about my latest situation, as I didn’t even know what the situation was. More importantly, I never liked telling Alan something that would make him disappointed in me, and given that he was my Rabbi insofar as my consulting arrangement with The Bank, I wasn’t ready to let him know that I might have burned a bridge that he had help build for me.
“Actually, I’m stuck on the West Side Highway, and since I’m the only one with the keys to the wire transfer department, its possible that your bond trading friends on Wall Street might be a bit delayed in getting started today.” Alan really enjoyed his new job.
“In all seriousness” he said. “I wanted to make sure you’re OK.”
Alan didn’t have a crystal ball, if he did, he’d have been able to predict the bout of cancer that he had hopefully beaten two years before; one that he had pledged me to keep quiet about while sitting with him during more than a few chemo treatment sessions. He wasn’t a big fan of displaying weakness.
“Why? Do you know something that I don’t?” I asked, trying to cut to the chase for both of us.
“Actually, was I cc’d on an email sent by one of your old buddies in The Bank’s Greenwich office yesterday. I thought you should know about it.”
I didn’t have any buddies left at The Bank’s Greenwich office. The only ones that hadn’t been moved to Lower Manhattan after the acquisition were two hardware guys that were monitoring some remaining servers. Neither of them particularly liked me; after all, I was the company’s top dog sales guy, and they were the guys that were supposed to jump through hoops whenever a customer had a problem.
“If this is the first time you’re hearing about it, then you’d wan to know that apparently two fellows with badges came to the office yesterday asking where they could find you.”
Not good, I thought to myself. “Yes,” I said. I’m aware. I had the dubious pleasure of actually meeting with those two witless fellows yesterday. Who else was on the receiving end of the email?”, I asked
“Just the head of The Bank’s security department, and a few others. You’re a popular guy”, Alan said. Without skipping a beat he asked, “Who’d you kill?”
“Perfect,” I said sardonically. “And, I didn’t kill anyone. Not yet anyway. But, I’m thrilled to hear how quickly good news travels,” I said, baiting him to share more intel.
“Oh yes it does.”Alan replied, with his own morning dose of sarcasm. “And, unlucky for me that my domain also includes overseeing The Bank’s email system. The Security Chief already sent out a memo advising anyone that hears from you should report it to him. Should I ask what you’ve done?”
I took a deep breadth, inhaling the magnitude of Alan’s message. News travels way too fast on Wall Street; and stories like the one he just revealed spread on Wall Street faster than the black plague, and can kill a career within hours. This was happening way too quickly.
“I won’t bore you with the details. They’re apparently looking into something from two years ago, and my name apparently popped up in a file.” I didn’t need to tell him more than he wanted to know at the moment. “Its probably no big deal.” I said, trying to sound casual, even if I felt as if I was standing alone in a house hit by an earthquake.
“If I can help in any way, call me on my other cell. The Bank pays for this one.”
I could read through the lines.
“Understood. And, thanks for the heads up.” I answered
“Not a problem, I wouldn’t be where I am today without you, so I’ll expect you to keep me up on what’s happening.”
I promised that he’d be the first person that I’d call, He ended with an upbeat, Alan-type remark, “But not if you need someone to post bail.”
“That’s very funny” I said. “If it comes to that, I’ll call your lovely wife, I know she has a thing for me.” Alan laughed and we exchanged goodbyes.
I went back up to the trading floor at RTM, and joined the line of traders, sales people and research analysts as they herded into the morning meeting. For the next forty-five minutes I was preoccupied with Alan’s alert, and the damage that had already been inflicted.
After the morning meeting broke up, I planted myself back at my desk and tried to focus on my normal routine. I bristled every time my phone rang.
At 11 am, my IM alert popped open, displaying that Jake had logged in to his Instant Messenger. Two minutes later he IM’d me
Jag (11:02:42 AM): No surprises today?
JoshB (11:02:49) Glad u have a sense of humr about this. Can you spell p-a-r-i-a-h? Word trvls fast.
Jag (11:03:02 AM): ?
JoshB: (11:03:10 AM) Will expln ltr.
Jag: (11:04:02 AM): You worry too much. Btw- I’m wiring the money this morning.
JoshB: (11:04:09 AM): Thnx
Jag (11:04:12 AM): np. You’re covered
Although slightly relieved that my bank balance was about to be been resuscitated, and that Jake hadn’t encountered any surprises of his own in the past twelve hours, I also realized that chatting on IM with him was probably not a great idea at all, so I switched on my away message.
At noon, I decided to ring up Sercowitz to see if there was any status update on his end, but Sonja told me that he wasn’t in the office yet. Then I called up Tom Russo’s office and his secretary told me that he had already booked me on his schedule for Friday afternoon at five, as that was his first opening. I thanked her and said I’d be there. What with Alan’s heads up earlier in the morning, I knew that I needed to assemble as many cards up my sleeve as I could.
My cell phone rang at 1:30, and the tone was loud enough to get the attention of Bobby and some of the salesman that sat near me on the trading desk. Bobby had implemented a strict ‘no cell phones allowed’ policy on the trading floor, and he freaks out whenever its violated. I threw him a sheepish look, rolled my eyes, and looked down at the caller ID. It was the 516 area code number that belonged to Heckle the Feeb.
Instead of answering it immediately, I pressed the ringer off button, and headed towards the glass doors, towards the outside atrium. I hit the answer button after the fourth ring.
“Hello. This is Josh.” I said, trying to be nonchalant.
“Hello, Mr. Berman. This is Agent Trujillo.”
“Yes, Mr. Trujillo, What can I do for you now?” I didn’t bother hiding my exasperation.
“I was checking to see if you had retained an attorney yet. And I was hoping you might have found any documents that could help us.” He said.
I didn’t want his train to move any faster than necessary, and since the gauntlet had already been thrown down in the form of a subpoena, I wasn’t about to assist him.
“In answer to your first question, I’m in the process of securing counsel.” Then I let my emotions of the past twelve hours spill into his ear. ”And, given the manner in which you sought my “assistance” and completely disrupted my home, I’m not inclined to speak with you without having a lawyer present. In point of fact, your tactics are straight out of a bad comic book, and I’m not amused when my home is invaded before dawn.”
Trujillo started to retort “Mr. Berman, I’m not sure you understand the seriousness of this…” when I cut him off by saying “I’m aware of my rights Officer Trujillo, I read the subpoena carefully and it says that I’m expected to appear before a grand jury in two weeks. I don’t have anything else to say to you, other than the fact that you can expect me to be filing an harassment complaint against you and your partner.” I was on fire.
“You showed up at my former place of work and waived around a letter that might or might not be evidence, and you otherwise informed former co-workers of mine that I was the “target” of a Federal bank fraud investigation, although you didn’t even have an arrest warrant. Then you stormed trooped my home and rousted my family out of bed before sun rise.” I was fuming, not even paying attention to whether anyone in earshot of me. “I can tell you that the two lawyers that I’ve already interviewed have told me that those kind of tactics were stricken from the FBI training manual long before you even went to the Academy.”
He actually seemed to be somewhat intimated.
“Look, Mr. Berman. We’re getting off on the wrong foot here, and you should calm down. I apologize for waking up your family, but we have our job to do, its as simple as that.”
I paused briefly and simply said “Actually, I am calm. And, you’re right, we got off on the wrong foot. If I owe you an apology for venting just now, so be it. I’ll be answering the subpoena accordingly.” I finished with, “I know that I don’t have anything else to say to you at the moment, and I need to get back to work. Have a good day.”
With that, we exchanged good byes.
I had broken into a cold sweat, and as much as Sercowitz had told me to keep my mouth shut if I were to be contacted by the Feebs, I couldn’t hold myself back. As I turned to slide my security card into the slot adjacent to the glass doors leading to the trading floor, I saw Mario exiting the washroom from behind me.
I merely said “Hey”, gave him a smile and went back to work.
By the end of the day, I still hadn’t heard back from Sercowitz, suggesting that the wheels of justice move at different speeds, and I decided to wait until he called me to share with him the exchange I had with feeb. Before leaving work, I noticed that Jake was still in the ‘available’ mode on the IM buddy list, it was barely past lunch time in Vegas, and instead of pinging him, I decided to connect with him later that night.
I stopped at the news kiosk in Grand Central and bought twenty dollars worth of prepaid calling cards. I’d ring up Jake from a phone booth after I got back to Connecticut, and I’d make another call to Stuey Levinson.
On the train ride home, I zonked out; I hadn’t slept more than two hours in the past thirty six hours and it was only Tuesday. While in REM, my conversation with the Feeb from earlier in the today kept replaying in my head.
After I pulled out of the parking lot at the Westport train station, I headed to a pay phone outside the Compo shopping center, and I dialed up Jake’s cell phone. When he picked up, his demeanor was as calm and collected as always. Mine wasn’t.
“Good to hear your voice’ he said. “What’s new?”
“Let’s see, the head of security at The Bank sent out a company-wide memo that I’m persona non-grata, thanks to the Feebs visit yesterday morning. Then I had a call from one of the “agents” later in the day, asking if I’d be ready to speak with them in greater detail. That was a great conversation. I told him that I was filing harassment charges against him and his partner. Otherwise it was a typical day.”
“Well, it sounds as though you’ve calmed down a bit. That’s good.”
“I’m glad you think so, Jake. None of this is amusing. I’m not sure you understand the ramifications of a major bank sending out a company wide email instructing anyone that comes in contact with me to report it to the security department”
“That’s ri-dic-ulous.” Jake said. He loved enunciating words so as to stress the point.
“Whatever.” I said, somewhat exasperated by his failing to grasp what was evolving on my side of the world. “What have you heard from your pal, Glassman?” I asked. “This whole thing is connected to him, he’s the one that orchestrated the letter, along with his pals Nardone and Lutkins.”
“I didn’t speak to Danny today, but like I said before, he told me yesterday that he has no idea what this is about. I’m supposed to get a reel of dailies sent to me tomorrow, just so we can show the movie is made. ”
“Obviously someone has a problem. I don’t know these people, you do.”
“You worry too much. I keep telling you that. Just relax.
“Right.” I said.
“Oh., I talked to my friend Jeffrey, the one that ran the FBI’s Miami office. He’s retired for two years now, but he said he’ll make some discrete calls to find out who the agents are, and what they might be looking into.”
“Ok. That’s good. I guess.”
Jake continued, “I have to run to a meeting, and I need to stop at the car wash, but I sent the wire this morning. It should have hit your account.”
He’s worried about desert dust on his $80,000 Beemer, while the FBI has got people believing that I’m one of the 10 Most Wanted.
“Thanks again,” I said. “Keep your powder dry. We might need to have a defense fund.”
He laughed, as if it were just a minor expense to doing business, and ended with his famous “You’re covered.”
Thursday, December 11, 2008
It took less than seven minutes to get from my office to Serowitz’s building on Madison Avenue. His office was on the sixth floor, and I figured that if his initial diagnosis indicated that I was a terminal patient, I could simply jump out his window.
His office was apparently a shared space, as there were several different name plates on the door next to his, which simply read : Morris Sercowitz, Attorney At Law. Not particularly impressive signage, but I was warmly greeted by his secretary, Sonja, who offered me a bottle of water and told me that “Mr. Sercowitz would be out in a moment.”
Four minutes later, Sercowitz entered the waiting area. He looked younger than I imagined. A trim 5’9”, he had the look of someone that kept his 155 lb body in shape. He had a striking resemblance to the actor James Woods, a similar chiseled face with a thin nose, and a full head of brown hair, with no gray, that touched the top of his double pin-striped suit jacket, which covered a pale blue shirt complimented by an Hermes tie. He hadn’t even smiled when entering the waiting room, and it was obvious that he wasn’t the type for small talk. After curtly saying, “Mr. Bronson, I’m Maury Sercowitz, please come in”, he immediately ushered me into a small, window-less conference room.
He removed his suit jacket with stealth, slipped it over his chair, sat down, grabbed a yellow legal pad from a stack of blank pads on the conference table, and placed his
It was apparent that I was expected to speak first, so I proceeded to introduce myself.
“First, I want to thank you for seeing me on such short notice,” I said.
“Not a problem, Mr. Bronson. You come highly recommended, and I’m here to help, if I can.’
“I think that its better that you call me, Josh. My Dad is “Mr. Bronson.” I continued, “This is going to be a bit complicated for me to explain, and I know that you’re accustomed to meeting a variety of “interesting “people, so I first wanted you to have an idea about who I am.” I was hoping to impress upon him that I wasn’t a calculating criminal.
I took out the resume that I had printed out, and slid it across the table.
While he was reviewing my CV, I proactively and somewhat defensively said. “You’ll hopefully see that I have what many people would view as a very accomplished background, the majority of which within the securities industry. My NASD record is completely unblemished, and I’ve never even been accused of doing anything improper, let alone had a formal complaint filed.” I paused in effort for that opening statement to resonate.
“I’ve been a public company CEO, and, as you can see by my resume, I’ve held very senior-level jobs on Wall Street, and I was recruited for each one. Where I come from, reputation is the only asset that you have”, I said, remembering my Dad’s favorite commandments.
“You’ll also see that I have a relationship with Knoll Associates, as I’ve consulted to them on a several projects. I’ve also retained them for other projects. Should their services be necessary in this case, it’s a resource that I can tap into.”
I took a pause so that Sercowitz could have the opportunity to read without being completely distracted.
“Aside from being a government witness in a fraud prosecution several years ago, my interaction with law enforcement has been otherwise social; a friend of mine is the Chief of Police in my town. My “criminal record” is limited to having two speeding tickets over the past ten years. My point in telling you all of this is that I’d like you to know that I’m not the typical client that walks in to a criminal defense lawyer’s office. At least I don’t think I am.”
Sercowitz didn’t break a smile at my ice-breaking, or self-deprecating remark. He simply said, “There’s nothing typical about the people that come to me for help. Contrary to what you might think, criminal defense lawyers do represent innocent people. My job is to provide counsel to the best of my ability, and your being referred by Larry Fallick is a good starting point. The fact that you have friends at Knoll is impressive, I’ve encountered them in the past, and your relationship with them might be helpful, if it comes to that.”
“Before we start, Mr. Bronson, excuse me, Josh—let me introduce myself. Its going to be just as important that you know what my background as it is for me to know about you.”
Sercowitz gave me the three minute snapshot about where he went to school, his having more than twenty years experience as a criminal defense lawyer, and that he considered himself an accomplished trial lawyer. He said that few cases actually went to trial, but that courtroom battles were an area that he took pride in.
He finished with “And contrary to TV shows, where the defense lawyer says “I don’t want you to confess anything to me”, I expect that our relationship will be an open one, and you should know that Lawyer Client privilege is an integral part of the judicial system, even if it does have boundaries. ”
I didn’t know if he was soliciting me to openly confess to a crime, or if it was a subliminal way of cautioning me about what I might want to disclose. I chose the middle ground, and took out the subpoena, with the attached “letter” and slid it across the table.
“I don’t have the time, or the inclination to waste your time. I wouldn’t be hear if I didn’t think I needed help ” I opened my kimona and spent the next fifteen minutes telling him about my background, where I came from, the jobs that I’ve held, and my family. I explained to him that where I came from, reputation is everything, and that I’d never knowingly done anything that would be considered inappropriate. I told him that I had certainly run across some interesting characters over the years, but that I prided myself on performing exhaustive due diligence before getting involved with anyone that I thought was sketchy.
Sercowitz took the cap of his
“Were you a Vice President of The Bank, as your signature on the letter indicates?
“No” I said. “I was a consultant at the time. But I had been a Vice President a few years earlier, after the Bank bought the business that I had co-founded.”. I felt as though I were being interrogated again.
He then proceeded to ask me about my relationship with Jake, how we had met, how long we knew each other, etc. I gave as good account as I could, and acknowledged that Jake was a very colorful character, and that he had some even more colorful friends and acquaintances, but throughout the ten years we had known each other, I never had any reason to believe that he ever operated on the wrong side of the law.
Then Sercowitz moved the conversation to the events surrounding the letter. I told him as much as I could remember, including the fact that, over the course of several hours, I had prepared at least five different drafts, all dictated to me by the people on the other end of the phone. I told him that in the first several iterations, I had simply put that Jake had a relationship with the The Bank, and that I had qualified him as a sophisticated investor, and I signed the letter as ‘special consultant’, all of which was precisely accurate.
I told Sercowitz that there had been anywhere between fifteen minutes and a half an hour between each of the conference calls that day, and each time they had called back asking for ‘tweaks’ to the verbiage, each time with more ‘compelling’ text. I told him how I had voiced my concerns about putting something in writing that was overly aggressive, and each time they said that “We really need Sir Anthony to get to
When they had asked me to insert my former “officer title, because it sounded “more impressive”. I told them that I wasn’t (a Vice President), and they said “Don’t worry. It will make the letter better.”
I explained to Sercowitz that I had regretted doing it from the moment that I hit the send button, and acknowledged that it might have been one of the stupidest episodes of my life. I also told him about the subsequent phone call that Nardone made to my boss at The Bank, my call to the him afterwards, and my follow up calls with Jake, who had obviously interceded, because all of the calls had stopped. As far as I could tell, and based on my subsequent calls with Jake, my meeting several months later with Glassman, and the news media attention on the movie, that particular incident wasn’t even a footnote to the financing, the production or the current status of the film project.
Sercowitz, taking copious notes, asked if I had received anything in consideration for drafting the letter, and what I knew about the other people involved.
I explained that I hadn’t solicited, nor was I offered anything, nor did I receive anything from anybody, other than Glassman’s invitation to visit the movie set while they were shooting the film. I didn’t bother to mention the Escalade that Jake had sent, as it had come six months later, and was his way of thanking me for helping to set his up his bridge loan hedge fund, the one that was providing thirty day pre-production loans to indie films. I told Sercowitz what little I knew about the other people that were involved, and how I had known Baldson back in college.
He asked whether I had been drinking that day, or if I had been taking drugs.
“Actually,” I said, “After being pounded on the phone over the course of several hours, I had opened a bottle of Scotch earlier than usual. I vaguely recall my wife asking why I was drinking at four in the afternoon. But, I’d think it would be hard to prove that I was incapacitated, although it would appear to anyone else that I must have been.”
Sercorwitz didn’t even look up.
“I’ve never snorted anything, and I’ve never taken any pills, other than aspirin, and the occasional Tylenol with codeine after having root canal.” I summarized with “I know that temporary stupidity isn’t a defense, so do you think we could go with a temporary insanity plea?””
Again, Sercowitz didn’t flinch at my self-deprecating humor. He merely asked “Do you have any history of mental illness, or are you being treated by a doctor and taking any type of medication.”
I could already envision Lorna on the witness stand, happily testifying to the fact that not only was I crazy, but that I had also made her nuts over the years. And, since, I didn’t think that my self-prescribed occasional pot smoking qualified as medication, nor was I smoking any grass during the day in question, I punted both questions back to Sercowitz with a simple, “My grandfather on my mother’s side suffered from severe depression. In fact, he was one of the first to undergo electric shock treatment, does that help?”
Sercowitz didn’t even blink.
He then grilled me about the conversation that I had with the two Feebs, what they had said to Lorna, and he wanted to know exactly, word for word, what I had said to them when I met with them. I recanted as best as I could, including the fact they hadn’t read me my rights, and some of my sarcastic remarks. I told him that I didn’t think I had made any new friends today.
The back and forth lasted about forty-five minutes, and by the time it was done, I was emotionally and physically exhausted.
“OK” said Sercowitz. “Before I explain what happens next, I don’t mind telling you that I’m a pretty good judge of character. And you were right when you first suggested that I see more than my share of interesting characters. My gut tells me that you’re a smart guy, you strike me as a very forthcoming and honest fellow, but unwittingly, perhaps even under duress, you did something that wasn’t very smart.”
I was somewhat relieved that Sercowitz believed me.
“That said, you signed your name to a document and made at least two misrepresentations; the most important being that you said were a Vice President of The Bank, when you were only a consultant. The fact that you transmitted that document is called wire fraud. Whether you intended to defraud someone out of money, or whether anyone even relied on the misrepresentation is irrelevant.”
This was like being in a doctor’s office after an examination.
Sercowitz continued, “Let’s presume that the movie has been made, or at least is being made, and that the agents that you met with are wrong about the “money going south”. That’s irrelevant too. You might be holier than Moses, but the letter is a smoking gun”
“I feel like someone that’s being told that I have terminal cancer” I said.
“You don’t have cancer, and you’re not going to die. And, if what you’ve told me is accurate, you’re not going to jail either. At least I wouldn’t think so,” Sercowitz caveated.
That last comment was completely uninspiring, and my facial expression spoke volumes about how I felt at the moment.
“I didn’t do very well at sleep away camp, so its fair to tell you that I’d have absolutely no interest in going to jail.”
Sercowitz couldn’t help but take notice of the fact that I was aggressively massaging my temples with both hands. “This is only a subpoena, and you haven’t been arrested. You don’t need to be getting more upset than you obviously already are. It only means that they are looking for information. It doesn’t mean that you are a target of an investigation.”
I took a deep breadth, and Sercowitz continued.
“But, we’ll find out more information, I’m sure of that. In the mean time, it would be helpful if you can produce the original iterations of the letter; that would corroborate your story, and demonstrate that the original intent of what you were asked to do was otherwise polluted by third parties. And, if what you said about Mr. Baron telling you that he hasn’t had a similar ‘knock on his door’ today, and you’re the first person they’ve contacted, that tells me that whatever the government is looking into, they’re starting at the low end of the food chain. They’re guessing that you can lead them higher up.”
This wasn’t sounding very comforting, especially if that meant my being a source of information that might be able to implicate Jake in something far bigger that I wasn’t aware of..
“I’m not sure if I can recover the original iterations” I said. ”I think that I had simply edited over on the same document. I’m not even sure if they’re still on my PC, its been almost two years, and I’ve had to replace my hard drive in the interim.”
“Try to find them”, said Sercowitz, matter of factly.
“OK, I’ll try. And, I’m supposed to appear before the grand jury to tell them what? ” I asked, getting more frustrated by the minute.
Sercowitz continued to try to allay my anxiety, “The subpoena identifies the name of the AUSA that’s handling the matter; I don’t know him personally, he’s probably new to the office. But, I’ve necessarily worked with the other AUSA’s in that office, and I also know the US Attorney that runs the Eastern District. She’s a very capable person, and based on my experience in other matters, she is a very reasonable person.”
He sounded very confident in his relationships. “First thing tomorrow, I’ll call the AUSA and advise him that I’ve been retained to represent you. As far as the subpoena inviting you to appear before a grand jury, we’ll get that quashed for the time being. We first need to call a “time out” so that we can find out what they actually want.”
“OK.”, I said. “That sounds like a plan.” The throbbing in my head started to diminish.
“You’ll need to sign a standard retainer agreement, and provide a retainer of five thousand dollars. I bill out at four hundred and fifty dollars an hour, but in cases like this, we can work out a project-based fee, if you prefer. If we’re lucky, the retainer will cover the entire time I’ll be spending on this matter.” He noticed a look of relief in my eyes, but apparently his cool, non-bedside manner didn’t allow for relief.
“But I won’t mince words, Josh,” he said. :”I don’t believe in luck. If I did, that letter, however the federal agents got hold of it, wouldn’t have re-appeared two years after it was written, and you wouldn’t be sitting here right now.”
This guy hasn’t cracked a smile the entire time that I was sitting there.
“If we have to fight this thing out, you can guess that the legal fees might add up to at least fifty thousand dollars. If we end up going to trial, its going to run at least another one hundred thousand, maybe one-fifty.”
I didn’t flinch, as I didn’t want him to think that I was without the resources to protect myself properly.
“You can look for another attorney, and you’ll discover that I’m actually very reasonable as far as my fees. We have a small office and I’m disciplined about overhead. There are other talented defense lawyers in
I felt like I was buying a car.
Then the closing summation from Sercowitz: “Based on what you’ve said to me tonight, and your obvious need to clear this up before it gets more complicated, don’t discount the fact that it might get more complicated. Aside from the description of your friend Mr. Bronson, who may or may not be the target of something completely unrelated, these things are often driven by politics, and since you work on Wall Street, you probably know that the Justice Department is on a tear.”
I felt as if I were watching the TV show LA Law.
“They’ve upped their quota on white collar prosecutions, notwithstanding being stretched for resources that have been allocated to terrorism. I’m confused at how or why the Eastern District might have jurisdiction in this matter. The people that solicited you to draft this letter are in
While I was impressed with his assessment of the landscape, his bottom line approach, and his sports analogy, the thought of this actually going to trial was something I hadn’t given much thought to. I explained that if this were to escalate, it would be a career-ender for me.
I did bring up the issue as to whether his not having a background as a federal prosecutor would be something I should be sensitive to. Sercowitz was very self-confident and suggested that his not having previous ties to that office was something that often worked to his advantage.
“I don’t have the cache of being a former prosecutor, but I have almost thirty years of experience working within the arena” he said matter of factly. “And, I don’t have the political baggage that former government prosecutors might bring with them. I don’t owe any favors, and nobody owes me any favors. That often works to my client’s advantage. I can argue that there are too many trade offs that take place between sitting prosecutors and former prosecutors that move to the private sector.”
He certainly was convincing. So, like an errant husband that finds himself shopping for his wife’s birthday present at the very list minute, I took out a spare check that I kept in my wallet, and wrote out the $5000 deposit. It knocked down my checking account balance by more than half, but that would be a topic I’d bring up with Jake.
Sercowitz walked me to the door and said, “See if you can find those drafts. And, a word of caution; the subpoena covers whatever is on your computer. You don’t want to do anything that might be construed as a willful attempt to destroy evidence.”
A lawyer with no bedside manner, and a mind reader.
As he opened the door to let me out, he said “If the Agents should happen to contact you again, don’t answer any of their questions, and simply tell them that you’re now represented by counsel. Give them my contact information. And, if you need reach me for anything when I’m not in my office, you can call me on my cell phone or at my home. Those numbers are on the back of my card.”
Thanking him for his time and for his responsiveness, I left Sercowitz’s office. After I exited the lobby of his building, and still paranoid, I looked up and down the block to see whether there were any Mercury Marquis’s parked on the street, or any dark-suited feebs with walkie talkies. The coast seemed clear, and I headed towards Grand Central. On the walk to the train station, I stopped at a pay phone, and used up the last of the prepaid minutes on the phone card I had purchased earlier, and dialed up Jake’s cell phone. He picked up on the second ring.
“Hi, Its me”, I said, without waiting for a reply. “I just met with the lawyer. He seems okay, although I get the impression he’s more accustomed to representing mobsters. You’d like him, he dresses nice, and he doesn’t mince words.” My sarcasm machine was in full motion.
“I had to give him a five k retainer, and I’m hoping the check I wrote doesn’t bounce. Perfect timing too, that money was budgeted for Lorna’s birthday gift,” A subliminal message that I wasn’t exactly happy about forking over five grand to a lawyer in connection with one of Jake’s endeavors.
“Anyway”, I said, “He was kind enough to tell me that this might end up costing fifty grand, and that’s presuming it doesn’t escalate.” I continued with more couching, “But, I’ve already been told by my friend at Knoll that I should be going with someone that’s a former federal prosecutor, ideally someone from the same office that’s coming after me.”
Jake was long-accustomed to my acerbic wit, “ I’m glad you liked him. But I told you, choose a lawyer that makes you comfortable. And, I also told that you that you’re covered. I’ll wire you the money for the lawyer’s deposit in the morning. If he ends up needing more, I’ll cover it.” The famous ‘you’re covered” line.
“Also, I talked to Danny” Jake said. “He says that everything is great with the film. He says he has no idea what the problem is, and that he’s happy to come forward and say that everything is fine.” Jake finished with, “Go home and relax. Tomorrow is another day. And, don’t let this stop you from getting your wife a birthday present. Putting up with you deserves something nice.”
“My putting up with you is half the problem, but thanks. I really do appreciate your support.”
“Not to worry, friends take care of each other, and you’re my closest friend. Everything will be fine.”
With those words of limited comfort, I said good bye. I had a few minutes before the next train, so I stopped at the concession stand in Grand Central and bought myself a Foster’s, the supersized can, and then caught the 7:10 back to