The Chameleon Conspiracy Page 2

  The rest of the story was sadly predictable, as I realized when she met me for lunch the day after my frustrating hospital interview with Ward. At his suggestion, she had taken a second mortgage on her apartment and given him the money to “invest in their future.” She’d given him the jewelry she’d inherited from her grandmother, which he sold immediately. But Sheila still had faith in him. Why?

  “I wanted so much to marry and have a family,” she said, sobbing, sitting opposite me in the dining room of my Sydney hotel. “He proposed marriage, and I believed him. My dream collapsed just a few hours before the wedding ceremony. How could I have known that he was already married?”

  I nodded sympathetically.

  “I know it makes me sound stupid, but I really loved him and believed what he told me. That’s where I went wrong. Now I don’t have him, and I don’t have my apartment. I couldn’t make the payments, and the bank foreclosed.”

  “Where do you live now?”

  “I share a rented room with a waitress I work with.”

  “A waitress?”

  “Yes,” she said faintly and apologetically, lowering her eyes. “I lost my job as well. My employers were sick of me being distracted, and the creditor phone calls got out of hand. I’m waitressing now in two different restaurants.” She dried her eyes. “Today is my day off.”

  I felt mounting rage. Cheating banks out of their money was bad enough, but cheating a trusting woman who’d had almost nothing to begin with and was then left with even less was appalling. But more than just that, something didn’t make sense. If Ward had scammed millions from U.S. banks and investors over the years, why was it worth his while to scam a secretary out of something as modest as her grandmother’s jewelry? Where had all that money gone?

  I flew back from Sydney to New York. After those three long days of travel, including a layover, I went to my office and read an e-mail from David that had just come in.

  Your report that you found Albert C. Ward III in Australia is apparently inaccurate. The FBI compared the finger-prints of Albert C. Ward III maintained in its database with prints lifted from the cup you gave the Australian Federal Police, and against subsequent prints obtained by the Australian police after you left. They told me an hour ago that the prints don’t match. The person you saw in the hospital bed is not Albert C. Ward III. The U.S. will not request his extradition. David.

  The triumph I’d felt on the flight from Sydney had turned out to be fleeting, and was immediately replaced with bitter disappointment. How could this have happened? I’d followed my hunch as well as procedure, and still failed. I’d lost the round, but I didn’t lose the lesson. I thought of a phrase from Samuel Taylor Coleridge’s poem “The Rime of the Ancient Mariner.” I wasn’t ready to wear my failure like an albatross around my neck. How come when I managed to pull off a task, there was nobody around, but hey, when I failed, there were plenty of witnesses? When I fucked up an exercise during my Mossad training, my instructor had told me sarcastically, “You have to learn from the past experiences of others, although I’m sure you’ll find new ways to err.” It had hurt.

  I shut the office door and collapsed into my chair, trying to figure out what to do next. I was facing a brick wall. I’d tried to scale it and failed.

  Should I throw in the towel? How long do you keep digging before you concede that the well is dry? Not here, buddy.

  My father had taught me that while a defeat is sometimes just a temporary setback, surrender makes it permanent. I wasn’t there yet, far from it. I was determined to win, but how? I would have to start again from the beginning.

  CHAPTER TWO

  Manhattan, New York, November 2003

  The sun wouldn’t shine that morning, and the skies would only lighten to pencil gray. Glancing at the glowing red digits of the clock, I could already feel it. It was six forty-five A.M., and only the slowly fading darkness told me it was already morning. When I finally got out of bed, I instantly regretted it. There had to be a better way to start the day than waking up in the morning.

  It was one of those days I dreaded. No pressing duties to perform at the office, just routine, snail-paced progress in the money-laundering cases I investigate for the U.S. Department of Justice. I forced myself not to return to bed, looking through the window at the cars passing through the Chelsea streets. New York City was unusually quiet. I felt strangely out of place. After twenty of years in the U.S., many of them right there in that apartment, I felt a pulling away. From the moment I’d landed in New York, I had considered it my home, and the U.S. my country and my future. But the dreary color outside made me long for the Israeli sun. Not the scorching rays of August that melt the asphalt, but the caressing sun of May and June that wraps you like the warmth of loving arms.

  Shaking myself out of memory lane, I went to the kitchen. I took a carton of orange juice from the half-empty refrigerator— extra pulp, the way I like it—and drank it directly from the spout, flooding my chin and neck with juice.

  Damn whoever designed that stupid spout, I thought.

  I wiped my chin, took a deep breath, and resigned myself to going to work. Con men absconding from the U.S. beware, I thought. I was cranky, and ready to take it out on whoever’s file happened to be on my desk that day.

  There has never been a shortage of new cases coming to my office from various U.S. government agencies. Major insurance fraud, telemarketing scams, banking fraud, and money laundering related to other white-collar crimes are the usual stuff. They expect us to find the perpetrator and recover the loot if either is located outside the United States. Once U.S. borders are crossed, foreign rules apply, leaving the U.S. government with little or no in de pen dent investigative and enforcement power. When a U.S. state or federal criminal case has foreign aspects, U.S. law-enforcement authorities can get police-to-police assistance from the more than 170 countries belonging to Interpol. Additionally, around forty-eight countries have bilateral MLAT, or Mutual Legal Assistance Treaties, with the U.S. for helping each other obtain evidence in criminal trials. That’s the easy part.

  Civil cases are even trickier than criminal cases. They are hamstrung by legal, bureaucratic, and political constraints that make it tougher for federal agents to pursue debtors for money outside the U.S. than it is for private creditors. The MLAT, limited to criminal cases, tends to be practically useless. Foreign courts take pride in their country’s sovereignty and loathe attempts by foreign governments to twist their arms. And they aren’t always eager to help the U.S. recover dirty money that might be bolstering their own country’s economy.

  That’s how I got my office. The sign on the office door read TAT INTERNATIONAL TRADE, INC., intended to mask our identity as the New York extension of the Office of Asset Recovery and Money Laundering of the U.S. Department of Justice. We have the expertise and the bud get to go after white-collar crooks wherever in the world they are playing, and mostly winning, mind games designed by the culprits’ lawyers, accountants, and investment consultants to keep us from getting their clients or the money. Most of the time we outsmart them and beat them at their own game. FinCEN, the Financial Crimes Enforcement Network, is the much-larger U.S. Treasury intelligence agency that searches for assets within the United States. But they do their job from behind a computer monitor, while we go out to the streets of Geneva, Liechtenstein, the Cayman Islands, and all the other locations favored by the money launderers of the world.

  I like my job. It offers complete independence outside the U.S., yet affords the entire might of the U.S. behind me. That is, provided I conduct myself as a straight arrow. This only gets tricky when dealing with what I’ll call cultural differences. David expects me to operate as legally and ethically as if I’m operating within the U.S. But I’m not. I’m dealing with dubious and shady characters in off-shore tax shelters, far from the reach of U.S. law enforcement. For them the phrases comply with the law or rules of ethics are good for a laugh. They’re over there to avoid the law, so it’s a bit
far-fetched to expect us all to abide by it.

  Fairly early in the game, I saw the futility of convincing my superiors that we couldn’t win the war of minds against lawless targets by behaving like nineteenth-century gentlemen. Fighting international crime and terrorism effectively, recovering stolen money, and disrupting terror attacks against the U.S. can mean resorting to Machiavelli. He put it best when he wrote in The Art of War, “No enterprise is more likely to succeed than one concealed from the enemy until it is ripe for execution.”

  “Do you expect us to apply Machiavellian methods or act like the criminals you chase?” David had once asked, hearing me air these frustrations. I’d known that he sympathized with what I was saying, but unlike me, he had clearly defined lines he would not cross.

  “Of course not,” I’d said.

  But we both knew damn well that insisting that I comply with each and every U.S. rule fit for U.S. domestic cases, as well as with the foreign country’s laws, was like sending a one-legged man to compete in an ass-kicking contest. Adhering to ethics is vital in intelligence gathering, because it constantly reminds you that your opponents can operate without any.

  “What’s the alternative?” David had said with a sigh.

  It was a rhetorical question. We both knew the State Department would be knocking on David’s door once some country started whining that I had bent the rules.

  “David, there haven’t been any complaints,” I’d protested. He’d raised his eyebrows. “OK, just one. But I was exonerated, remember? I have a clean conscience.”

  “No, Dan, you have a bad memory.”

  But he hadn’t continued, so I went on. “There must be some places where I can have some leeway. I’m not asking for permission to break foreign countries’ laws, but this strictness is crippling me.”

  “You know we can’t do that as a matter of policy,” David had said calmly. “But…”

  He’d let it hang in the air. “But you’ll look the other way if it’s not egregious, and if I don’t get caught,” I’d said.

  He’d smiled, and that was enough for me. I’ve always been a deeply religious follower of the eleventh commandment as it applies to intelligence agents: Thou Shalt Not Get Caught.

  CHAPTER THREE

  That gray November day marked my introduction to the Chameleon case. Inside my Manhattan office were four newcomers that were impossible to ignore—battered brown cartons on the floor. A Post-it on the top carton read, “Dan, read these files and talk to me. David.”

  The FBI had decided to take a fresh look at a universe of high-dollar bank and other fraud cases that were committed within the past fifteen-or-so years, had seen indictment, involved scamming $15 million and up, and were never prosecuted, for lack of defendants.

  Why now?

  I suspected the FBI was dumping these cases on us because they thought terrorist financing might be turned up. The perpetrators of these stale high-dollar cases had similar MOs, had been out of the country for a while before the scams, and had all vanished afterwards.

  A single page would keep me busy for six days reading bank statements and about other fraud cases.

  The computer-generated sticker label with a bar code on the first file’s front read “U.S. v. Albert C. Ward III, aka Harrington T. Whitney-Davis, case #86-981.” I pulled out a fresh yellow pad and a sharp pencil. I would get the facts first. I started with the FBI report. On its front page was Albert C. Ward III’s enlarged black-and-white photo and bio. Ward was born in Milwaukee, Wisconsin, on March 27, 1959. He attended the Milwaukee Trade and Technical High School’s Evening School, and graduated in June 1977. Ward had worked at several minimum-wage jobs in the greater metropolitan area of Milwaukee until hired by a local security company. Following a two-week training session, Ward was given a patrolman’s uniform and was assigned to the North Lake Drive area.

  After two uneventful years as a patrolman, Ward was promoted and became a night-shift-duty manager. His supervisors described him as a highly motivated and effective employee who sought adventure. They also indicated in his job-evaluation report that there were a few instances when he had been too aggressive toward his fellow employees, including one incident in which he’d punched a coworker. Ward had been arrested, but was later released when the employee refused to press charges. No intracompany disciplinary recommendations were made.

  In 1980 Ward left that employment and applied for a passport. He left the country in May 1980, on board a Panamanian-registered freighter sailing from Seattle to Hong Kong. Ward had filed no tax returns after 1980. A search for family members came up empty. There were no records of his reentry into the U.S. His name and Social Security number had nonetheless started reappearing on credit reports in 1985. A national-database search showed that Ward had lived in eighteen different locations throughout the U.S. since 1985, mostly in Michigan, Massachusetts, Wisconsin, New York, and Florida. An inquiry with landlords and neighbors at these addresses had yielded very little.

  Those who remembered Ward described him as a reclusive, nonconfrontational, and quiet person who kept to himself. One neighbor mentioned that Ward listened to strange music. A landlord who lived close by described visitors to Ward’s apartment as people who didn’t fit in the neighborhood, and who’d come during odd hours of the night.

  It was the one unusual detail in an otherwise routine and bland report, but there was nothing to substantiate a suspicion or lead me anywhere. Criminals flock with people of their own feather. And the music? My son listens to music I’m convinced was recorded with a knife grinder, a train on rusty rails, and an empty tin trash can dragged on the pavement. But that didn’t prove anything other than odd taste in music.

  The rest of the information detailed Ward’s history of indictments, using and discarding aliases. His modus operandi was a good old hit-and-run. Amazing, but true. He had always slipped out of the hands of the law.

  Ward’s earliest recorded sting happened in a small town in South Dakota. Ward appeared there one day in 1985 as Harrington T. Whitney-Davis. He rented a nicely decorated office in a building housing a local savings bank and incorporated Fidelity Trustees of America, Inc. Ward came to the savings bank, introduced himself to the bank manager as manager of a new branch office of a national financial company, Fidelity Trustees of America, Inc., and suggested business cooperation. Of course, neither company had any connection whatsoever to the reputable Fidelity financial and securities companies.

  It hadn’t taken long to convince the bank manager to market “limited edition” treasury securities offered by the fancy-name, trust-inducing company of Ward, now Harrington T. Whitney-Davis. No hard sell was necessary. Ward had told the manager that the savings bank would act only as intermediary, selling the securities to its customers, assuming no risk, while collecting hefty commissions. Ward’s business had come at the right time. The bank manager was being pressed by his board of directors to improve the bank’s balance sheet and was looking for ways to expand its product line. The manager quickly agreed, and the savings bank started offering these supposed treasury securities to the bank’s customers as a solid investment vehicle. The promised interest rate of 14 percent gave a significantly higher yield than the interest paid by the usual securities issued by the U.S. government, or deposits insured by the FDIC.

  The problem was that the securities Ward offered were fictitious. There’s no such thing as a limited-edition treasury security. It was a scam in the fullest meaning of the word. All that Ward had to do was use his pompously named corporation and generate official-looking stationery confirming that the bank had purchased Ward’s bogus securities on behalf of a bank client, or even on behalf of the bank itself.

  During the first three months, the bank sold $14.4 million worth of Ward’s limited-edition treasury securities. In the beginning, when customers wanted to liquidate their holdings, Ward’s company promptly paid the bank, which in turn credited the customers’ accounts. There was no reason for anyone to suspect that a
nything was wrong. The bank had collected nice commissions. The manager and the board of directors were happy. So were the bank’s customers. Through word of mouth, sales increased even further. To emphasize the exclusive nature of the investment, the bank manager had decided that the securities would be sold only in units of $10,000, and only to the bank’s customers. If you were banking elsewhere, you had to first open an account at the savings bank to be allowed to purchase these wonderful securities.

  Other banks in town, which saw their business volume shrinking, wondered why they couldn’t offer the same securities to their own customers. Following a few phone calls by other bankers to the South Dakota Department of Commerce and Regulations’ Division of Banking, which regulates financial institutions, and to the Federal Home Loan Bank Board, which at that time regulated federal savings banks, questions arose. A federal bank examiner called the bank manager for an interview without telling him why. The manager mentioned the call to Ward, whom he knew as Harrington Whitney-Davis.

  Ward knew what the manager didn’t: it was time to take off. He disappeared immediately, together with more than $20 million. Angry customers demanded their money back from the bank. But the bank couldn’t help. In fact, the bank became one of the victims, having invested heavily in Ward’s phony securities. The end was inevitable. The bank became insolvent and was seized by regulators.

  Ward’s next scam was more complex. He moved to Nebraska, assumed the name of Harold S. McClure, and incorporated Lincoln Premiere Equity, Inc., as an investment club for senior citizens. Of course, that name had no connection to any genuine, reputable business entity. “Harold” ran ads in the local newspapers claiming, confusingly but impressively, “Lincoln Premiere Equity’s CDs are purchased from federally insured banks to secure the Certificate of Deposit Program of the FDIC.”