Thursday, December 11, 2008

Chapter 9- Calling in the Cavalry

Although it seemed longer, between the meeting with the Feebs, walking in circles around a five block radius, and the phone call with Jake, I was actually out of the office no more than thirty five minutes. To my relief, when I got back to my desk on the trading floor, Bobby had already gone out to a lunch meeting, giving me the opportunity to focus on my dilemma without being bombarded by his requests. I scanned the trading floor in a somewhat paranoid manner. For all I knew, everyone had somehow heard about what had happened. and they were waiting for the next shoe to drop. The only eyes that I connected to were Mario’s, he didn’t acknowledge the connection, he just looked back down at his desk and continued with his work.

I had no clue as to whether my call with Jake had in fact opened a Pandora’s Box that was already sitting on his desk, and whether he was now headed to McClaren Airport for a one way trip to Costa Rica, or if he was sincere when he said that he was dumbfounded, but that he would come to the rescue, come hell or high water. In either case, I wasn’t about to sit around and wait for him to get back to me. For all I knew, the Feds were minutes away from knocking on his door and carting him away.

I called Lorna at home, in an effort to make sure the temperature had dropped back down, and when she answered the phone, I tried to be calm and add a sense of humor.
“Hi, Its me. Any more strange visitors today?”

She wasn’t amused. “Josh, I’m still trembling. What the hell is going on? What did those guys want? Do you have any idea the kinds of questions that Charlie is asking.??”

Rat a tat. Lorna had obviously not calmed down. Not that I would have expected her to.

“I’m sorry, Lorna. I really am. And I can only imagine how upset you are. The two guys that woke you up are total assholes, and the whole thing is some wild misunderstanding. Try to relax. I’ve already made some calls to find out what this is about, and I’ve got a meeting after the close to get some help, so don’t wait dinner for me.”

“You weren’t arrested, were you??” Lorna was always so supportive and thinking the best of me. I said, “No, I wasn’t arrested. If I were, I promise that I’d call someone else to post bond for me.”

“Well, I’m glad you know better than to call me. Jesus, Josh. Charlie is already telling her friends about her morning wake up call! What are we supposed to think?”

“When I know what to think, I’ll let you know. In the meantime, don’t panic. Everything is fine. I’ll get this straightened out, and nobody is coming back to wake you up, I promise.” Of course, I had no idea whether that was true.

Before hanging up, Lorna said “Fine. I hope you find the couch comfortable tonight.”

The next thing I did was ring up my pal Seth at Knoll. He’d be the best person to advise me on what to do next. If so inclined, he could also get to the bottom of a situation quickly and discretely.

Several years before, Seth and Knoll’s team had provided me with yet another first hand experience at how good they are when it came down solving a problem quickly. That was when Stuey Levinson, another former college roommate that I had stayed close with since we left college, had recruited me to set up an insurance claims processing unit for his Dad Arnie’s otherwise sketchy offshore automobile insurance company, the one that that sold auto policies in California at fifty percent discounts, and whose business model included pocketing the upfront policy fees and monthly premium checks, but not budgeting for paying out on claims that would ultimately be submitted. Arnie was the real life, but upscale version of Jackie Gleason’s Ralph Cramden. He was a get rich quick kind of guy that not only looked like Jackie Gleason, but when things were good, they were really, really good.

Arnie had taken a circuitous path into the insurance racket; during our freshman year in college, which was the tail end of a very painful recession, Stuey’s Dad had made a small fortune by way of insurance settlements that he received after the two shoe stores that he owned in New Jersey had mysteriously burned to the ground within six months of each other. With claim checks in hand, he had moved his family from a tudor house in Livingston, New Jersey to a gated community in Hollywood, Florida. That’s when he became an expert in the insurance business. With nothing but time on his hands, and a nice bank roll, he had hooked up with another creative guy that introduced Arnie to the world of premium financing, a high interest rate loan that’s provided to people that need help paying their insurance coverage. That business thrived; leading Arnie and his partner to open up their own insurance company, whose headquarters was a post office box in Anguilla.

When Stuey called to recruit me, he was serving as the insurance company’s outside counsel; his first major client after being recruited away from New Jersey’s Bergen County Prosecutors office by a major corporate law firm. Unlike his Dad, who had a long business history of angling short cuts, Stuey was a straight arrow, so when Arnie’s insurance company started to become overwhelmed with claims, Stuey’s Dad turned to him for help, and in turn, Stuey needed a trusted friend to help sort through and solve the company’s risk problems.

When I was first setting up the claims office for Arnie’s Miami-based, Antigua-registered company, they had shipped me more than 250 boxes of outstanding claim files, 15,000 in total. They included all of the property damage, theft and uninsured bodily injury claims that had been submitted by the company’s insured, and claims submitted by plaintiff lawyers representing third parties, people whose autos had been damaged in accidents with our insured, as well as claims relating to injuries that resulted from those accidents.

At the time, I didn’t know much about managing auto insurance claims, but I got a quick education, and I had assembled a team of claims industry experts and support staff to help, all underwritten by the insurance company that Stuey wanted to keep in the right of way.

It took no more than a few days of going through the files to realize that at least sixty percent of the claims had been submitted by no more than ten different law firms, with so-called “injury reports” submitted by the same twelve or fifteen different “medical clinics.” It didn’t take a rocket science to figure out that the vast majority of claims were outright fraudulent.

Of the first claim files I had opened, I found a two-file jacket, separate claims submitted within a six week period by an Emmy-Award winning TV writer whose notoriety and monthly income stream in the late 1980’s had accelerated faster than his Porsche in the course of going from zero to sixty. But I had remembered reading a People Magazine article that his career had stalled out after his hit show was cancelled, along with his royalty checks, and last anyone knew, he was back to writing commercials.

Even though I hadn’t yet become a full-fledged Banacek, I knew enough about the topic of insurance fraud to appreciate that it’s perpetrated by those that are in a financial bind.

In a forty-five day span, he had submitted two unrelated claims for two different vehicles; the first was a purported rush hour hit and run on Santa Monica’s 405 Freeway; with no witnesses. His Range Rover, driven by his nanny according the claim report, had been hit by someone that inflicted a few thousand bucks in property damage to the car, along with soft tissue injuries to the nanny that resulted in $20,000 in medical bills The second claim was a whopper too; the famous TV writer had said that he was the victim of a mid-day car-jacking while sitting in his special edition, $85,000 Porsche Cabriolet at a traffic light on Hollywood Boulevard. The claim file included a statement from the insured that said he was “accosted at gun point while sitting at a red light at the corner of Hollywood and Vine.” He owed $65,000 on the car to a finance company, and he expected the insurance company to cover it. As far as I could tell, both claims had failed to pass the fraud litmus test.

[Years later, when the famous TV writer enjoyed a rebound in his career, he wrote and directed a low-budget, art house film called “Crash” whose story line was about a single incident that led to a chain reaction, with ironic twists of fate that brought unrelated people together, some resulting in violent incidents; all started by the submission of a phony insurance claim.]

The eerie part was that good ol’ Danny Glassman was the lead producer for that movie, and the ironic part was that while the film had cost $5 million to make and ended up grossing hundreds of millions at the box office worldwide, the investors and all of the star actors that agreed to work in the film in exchange for a piece of the profits had been told that the movie wasn’t financially profitable, meaning nobody would get paid for their investment.]

But, that was just one of literally thousands of suspect files. So, to lessen the load of the claims managers that I had recruited, I brought in a software developer that I had worked with before, to help build a computer-based claim fraud detection module that could\weed out the obvious phony claims. It would be another few months before having to focus our sleuthing inside Arnie’s insurance company; that’s when I figured out that Arnie’s partner was busy funneling millions of dollars of premium payments to a Nicaraguan bank account.

When I phoned Seth’s office after Lorna hung up on me, his gatekeeper Kate picked up.

"Hi Kate. It’s me, Josh. Is Seth in?” She intuitively replied with, “Nice to hear your voice, Josh. Standard question; so is this a social call, or is there a problem?”

Kate is the real life version of Effie Perrine, the able, trusted and appropriately stacked assistant to dime novel detective Sam Spade, a role that Humphrey Bogart made famous in “The Maltese Falcon.” Kate had known me for as long as Seth and I had been buddies; she had been his gatekeeper and Gal Friday when he was an organized crime stopper and Special Prosecutor for the City of New York, and she had necessarily gone along with Seth when he joined Knoll. She was great at cutting to the chase.

"I'm just being sociable in the course of having a slight problem." She always seems to like it when people play on words, and according to Seth, she also likes being tied to a bedpost.

But she got my drift and said "I see. I'll tell him that you're on the line." Within less than five seconds, Seth picked up.

“Hi Josh,” said Seth. “I was just thinking about you. I need a doubles partner for a member’s guest this weekend, and if you’re up for it, I could use that 90-mile-an-hour serve of yours on my side of the court. Are you up for it?’

“I’d love to Seth. But, based on a meeting I just had, you might have to post bail for me before I can come over to your country club.”

“Oh, boy. What did you do now?” Seth knew that I had a tendency to find myself in unusual situations.

I gave Seth the abridged version, and kept it to “I won’t bore you with the details, at least not on the phone. I think I’ve been implicated in something that I’m hoping is nothing more than a misunderstanding. But, based on the fact that two Feebs rousted Lorna and Charlie from bed this morning while looking for me, and the meeting that I just had with them, which included my being handed a subpeona, it appears that I need a good lawyer, someone that’s experienced in dealing with the US Attorney’s office.”

Seth paused. He knew better than I that the FBI doesn’t come calling on prospective witnesses at dawn. Those surprise visits are reserved for targets of an investigation.

Given the discreet nature of the role that Knoll played for corporations, whether helping to defend them in a cause of action, or helping to uncover dirt against an adversary, most of their clients were actually law firms that are retained by the actual ‘client’. That employment structure provides Knoll with an often-needed shield of protection that’s only available through the sanctum of attorney client privilege. As a result, Seth had long-standing relationships with the very best lawyers, including those that specialized in criminal defense. And, based on the fact that Knoll staffers were comprised of former prosecutors (as well as more than a few from a litany of Alphabet Soup agencies, from CIA, to NSA and FBI), Seth had connections to a variety of people that were currently employed by Uncle Sam.

“First. Are you OK, and more important, are Lorna and Charlie OK?”

“They’re fine. And I’m fine, just a bit rattled. So, do you have any suggestions about a lawyer?”

Seth didn’t hesitate when he said, “You don’t want to be going to one of those big firms, they’ll charge an arm and a leg just to hear your story, and I know that you’re still paying off Charlie’s Sweet 16 party. But you do want someone who has previous experience working inside the US Attorney’s office. Get a pen and write this down.”

Seth proceeded to give me the name and phone number of Tom Russo, a long time friend of his who, according to Seth, was one of the best criminal lawyers in New York. Russo had his shingle, no partners, and supported by a staff that included a paralegal and a secretary. Seth told me that Russo was a former AUSA from the Southern District of New York with more notches on his belt than Wyatt Earp. He was so well respected that he had been tapped to run that office, one of the most prestigious US Attorney roles in the country, but he had turned down the opportunity simply because he hated the politics of the job. Seth said that Russo had instead become a gun for hire representing defendants, because he believed that the Justice Department, under the leadership of the Bush administration, had run amok in the course of zealous prosecutions, providing Russo an opportunity to level the playing field, and make a lot more money in the private sector.

Seth told me that he’d phone Russo in advance to expect my call, and instructed me to keep him abreast of what was happening.

After I took down Russo’s information, I logged on to the internet to research his background, so that I could be more familiar with who he was. I was going to wait twenty minutes before I actually called, to allow Seth the time to connect to him first. I also started searching around the Web for other lawyers, just in case Russo wasn’t immediately available. Ten minutes later, my Instant Message alert popped open with an IM from Jake.

JAG 12:37.25 “Helllo.” Along with a “smiley face” , which he often included in IM”s only to further express his calm demeanor.
I responded with “Hello”
JAG 12:37.30 : “Call me on cell”

Jake had no idea that brokerage firms maintain all electronic messages that come into their offices, as well as those that leave them, not just emails, but that IM’s were recorded as well. And it was me that oversaw the implementation of the special software that tracked IM’s at my firm. I wasn’t that concerned that Jake was IM’ing me, as I didn’t believe what Heckle and Jeckle had said about the ‘money going south’, and I was much more focused on getting to the bottom of the problem and finding out what Jake had to say.

Filtering IM messages out of literally tens of thousands that are transmitted in an office with 100 people is actually more difficult than it sounds. But to be prudent, instead of using the private line on my desk, I went back down to the street and used the prepaid calling card at yet another pay phone. Jake picked up after the first ring.

“Hi.” He opened with, again, the drawn out i’s, and his usual calm manner.

“I want you to know that I’m on top of this. I’ve made some calls, including leaving a message with Danny. He’ll call me back shortly, he always does. I also called a friend of mine that used to run the Miami FBI office. He’s retired, but he’s got lots of juice.” a phrase that’s particularly popular in Las Vegas, and connotes someone with lots of influence.

“He’s going to see what he can find out about the people that you met with, and to try to find out what they’re looking into. We know the money didn’t go south, as the movie is already made. It might not be totally finished, but nobody stole $25 million. That’s plain wrong.”

“OK”, I said. “Any ideas about lawyers?”

“That’s covered too.” He said. “I phoned another friend who gave me the name of two different lawyers in Manhattan. I’ve already spoken to one of them, he comes highly recommended. The other lawyer is someone that he’s worked with closely, but they are at two different firms. If someone is looking into something that I’ve done, we’ll each want our own guys. That’s the way it works.”

“Can I ask who recommended them?”

“You don’t need worry about that, but if makes you feel better, I called my friend Al. I think you know enough about him to know that he uses the best lawyers anyplace.”

Jake didn’t stand on ceremony when it came to grammar. As well-educated as we he was, he often preferred to sound like a “tough guy.”

Great, I thought to myself with a sense of sarcasm. He’s tapping into his “Uncle Al”, a guy that I knew was worth over a $1 billion thanks to owning the biggest title loan/pay day lending business in the country, but he’s also never left the radar screen of the Justice Department, as his alleged connections to organized crime, and a suspected role in the disappearance of Jimmy Hoffa goes back almost four decades.

“The lawyer I want you to phone is actually near your office. Very convenient for you.” Jack enunciated every syllable of words whenever he was providing instructions.

Jake then asked if I had a pen, which I did, and I proceeded to write down my anointed counsel’s information on the back of one of my own business cards. The lawyer’s name was Maury Serkowitz. It wasn’t a name that jumped out, and definitely not one that I had come across in the many news stories covering the wide variety of white collar criminal cases unfolding in and around Wall Street. Criminal defense lawyers were becoming media celebrities, as their practice area during the late 1990s and early part of the new century was booming. And more than a few criminal lawyer that weren’t currently defending a high profile client were being interviewed on Fox News to comment on the case of the day. But the name Sercowitz wasn’t one that rang any bells.

“It’s just a recommendation” said Jake. “Go and speak with him. If you don’t like him, then we’ll find someone else. Or if you find someone that you like, that’s fine too. When you call him, just tell him that Larry Ballick referred you to him. Larry’s going to be my guy on this.”

With that, I went back up to the trading floor, returned to my seat on the trading desk and logged back on to my computer. I Googled Sercowitz and found his one page website, and a brief description of him on Martindale Hubbel, the legal industry database. He was only nine years older than me(this should really be “I” ), and had gone to undergraduate school at Wesleyan and got his JD at University of North Carolina. Good schools, but not Ivy League. According to Martindale, he had served two terms as president of the New York Trial Lawyer Attorney, and he was also an adjunct law professor at Fordham University. But he hadn’t logged any time as a government prosecutor, a criterion that Seth had said would be important.

My search turned up just four news articles from local newspapers profiling cases he had handled. One story had a quote from him in connection with his defending a nursing home operator that had swindled $10 million from Medicare. After a two month trial, his client had been found guilty and received two years in jail, but as Sercowitz had pointed out in the interview, he could have gotten fifteen.

Another former client was a crew member of John Gotti, the famous Brooklyn-based mobster. His client, also a cousin of Gotti, had created an online payment company that catered to porn site operators. The billing company had apparently overcharged customers more than $400 million over ten years. Sercowitz had taken that case to trial too, and his client had been found guilty of only five of twenty-five charges and sentenced ten years in a Federal camp, out of a possible thirty; a “victory” as far Sercowitz was concerned.

The only other two cases that I could find on the Net were less exciting. Sercowitz had defended a cop that had purportedly stolen money from a drug dealer, and he had defended one of the New York Knicks on a drunk and disorderly beef in which the basketball player had trashed Scores, the famous topless bar in Manhattan. The cop’s case had gone to trial, and the defendant was acquitted. The charges against the star forward from the Knicks were dropped after it was agreed that he would pay the $10,000 in damages and attend a two week rage management program.

As best as I could tell, Sercowitz wasn’t an A-list lawyer; mid-level mobsters and low-level schmucks seemed to be his bread and butter. When I Googled Larry Ballick, the lawyer that Jake had apparently tapped to cover his own ass, it was obvious that I was getting sloppy seconds.

Ballick was in his late sixty’s, a former Assistant District Attorney in Manhattan, a former Special Assistant to the Attorney General of New York, a published author, and he was a name partner of an uptown law firm that had more than three dozen lawyers on staff, with practice areas that covered the full gamut. Ballick ran the criminal defense practice area, and his list of former (and current) clients included not only front page mobsters, but more than several Wall Street types, two murderers facing the death penalty, and a middle-Eastern fellow that was a co-defendant in one of the biggest trials of the decade.

The first article that appeared showed that he had been recently appointed to be the pro bono lawyer provided by the US Government to defend one of the Al Queda terrorists that had bombed the World Trade Center in 1993. Another article spotlighted him as the lead defense attorney in a high profile murder case; the defendant was a woman who had allegedly killed her CEO husband after discovering he had an affair.

Based on the evidence, she could have gotten the death penalty, but Barry’s court room prowess had induced the jury to convict her of manslaughter. His client got 25 years, but he became a lead character in the best selling book and the movie that followed. I had also found a court record that indicated he was the attorney of record in a Miami case involving Al Melnick’s son, who had been charged with a DUI. I thought it was sort of odd that a lawyer like Ballick would have taken a case like that, but I also figured out that a guy with those kinds of creds wouldn’t have taken on a DUI in Florida unless there were other connections.

If I was under-impressed with Sercowitz’s credentials, I was slightly comforted by Ballick’s.

I mentally jotted down all of the back ground info, and thought about calling Stuey Levinson. After all, he was a former prosecutor, and when he had moved into the private sector, he had specialized in criminal defense, so he too had a roster of front page clients, including several political corruption cases that had received national media attention. I only hesitated calling him because the experience we had together with Arnie’s insurance company had ended badly for everyone.

Arnie’s company was burning a short fuse when Stuey, and shortly thereafter, I, had been brought in to stop the bleeding and hopefully, to keep the patient alive. But auto insurance, as a stand-alone business, is no different than surfing. You’re constantly in the curl of the wave, and if the wave stops, you’re sunk. More importantly, the “curl” has to be perpetual, so auto insurers have to keep selling new policies in order to keep the wave flowing. It’s a sophisticated Ponzi scheme. While we were able to dramatically reduce outstanding liabilities, the avalanche of backlogged claims, the sparse capital that had been set aside to pay them, coupled with a decline in renewals and new policy sales forced the insurance regulators to seize the company.

Because Arnie’s insurance company had stiffed his son’s New Jersey law firm on six figures worth of outstanding legal bills, Stuey’s law partners had shown Stuey the door. So neither of us were particularly happy with the outcome, and we chose to distance ourselves from each other for a while. When I had last spoken with him, he had taken a sabbatical from legal defense work and had pursued real estate development, backed by the remaining funds that Arnie had kept offshore.

But Stuey and I had known each other for twenty years, and I wasn’t in a position to stand on ceremony over a business endeavor that didn’t pan out as planned, and as far as legal advice, I needed as many experienced cards up my sleeve as possible, and I wanted to make sure that I had plenty of choices.

I dialed up Stuey’s cell phone and got his voice mail. The best I could do was leave a message, “Hey roomie! Its your long time pal, Josh. I don’t know what kind of irons that you have in the fire, but if you’re licensed to practice in New York, I might have a gig for you. ”

With that, and the clock ticking, I phoned Lawyer #1, the one that Seth had recommended. Russo’s secretary answered, and I told her that I had been referred by Seth. She said that he was traveling, but because it was Seth that referred me, she’d phone Russo immediately, and he could be expected to call me back the moment he was available.

Then I dialed up Maury Sercowitz’s office, and his secretary answered. I gave my name, and said that I was referred by Larry Ballick, and that it was a pressing matter, and wondered if he had any time on his schedule today. His assistant, who warmly introduced herself as Sonya, told me that Sercowitz was in a meeting, but that I could come by their office at five thirty that afternoon.

Bobby had returned from his lunch meeting, and before getting to his office, he dropped several sheets of paper on my desk that displayed names of prospects that he wanted me to follow up with. He knew that I was the best in the firm when it came to researching background information on prospective accounts, an important element when soliciting them to do business with the firm, and in the course of maintaining relationships. He was always amazed at how I could use the Net to locate the most seemingly innocuous information, the type of things that he was great at leveraging, or exploiting.

For the next several hours, in an uninterrupted state of anxiety, I pounded on the keyboards, entered notes into the custom-built CRM database, and at the same time, I did some preliminary research, including searching out any information about the movie, and background information on those that were involved with it. I wanted to make sure that I was at least somewhat prepared for my meeting with Sercowitz.

When glancing at my IM buddy list, I noticed that Jake was logged on, and I IM’ed with a simple, yet cryptic “?”, followed by the letters “DG”. I was hoping that he might have connected to his buddy Glassman, and that he could provide some light to the dark tunnel that I found myself in. His response came a minute later

JAG 3:37.10 “?”

As many scripts as Jake has read, he wasn’t particularly good at reading through the lines, so instead of spelling it out for him and going out of my way to leave an electronic messaging trail that might come back to bite me, I didn’t bother replying, and instead focused on the tasks on my desk.

By ten after five, the trading floor started to empty out, and at five fifteen, Bobby left to go the firm’s gym for his daily session with the full-time trainer. I punched out a copy of my resume from my PC, printed it out on the trading floor printer, and put that, along with the papers handed me by the Feebs into a manila envelope, and proceeded to leave for my meeting with Sercowitz.

As I was exiting the double-paned glass doors, Mario was walking back in, and said “Buenos noches, amigo. Be safe,” as if he somehow knew about the events that had taken place over the day.

No comments:

Post a Comment