The Concealers (31 page)

“Let's go to the club, play a little racquetball,” Teddy said.

“Let's not. Let's go for a ride in the new Porsche Cayman I helped you purchase. Pick me up at 3:00 p.m. sharp.”

“I'll be in front of your office,” Teddy said.

Austin was waiting outside. Teddy was prompt. When they were out of New York City, and on the Jersey Turnpike heading toward Atlantic City, Teddy demanded to know what the hurried meeting was all about.

“I want to get a few things straight,” Austin said. “To begin with, you did accept the appraisals I gave you, correct?”

“The appraisals . . . for . . . to back up the renewal of your lease?”

“Yeah, plus to augment our balance sheet to support the cap loan renewals.”

“Sure, we accepted those. What's the problem?”

“Did you have appraisals of your own?”

“What are you talking about, Austin? You hired the appraiser I gave you.”

“Don't screw around with me, Teddy. I'm talking about the financials you asked for to support the cap loans—appraisals as backup to those financials.”

“Why are you asking these questions now?”

“Why aren't you answering them?”

“I'd like to know where you're going with this, Austin. You're Wilson's CFO. It's your job to give BNA accurate information. It's my job to ask for it.”

“What's Arthur Goldberg's position?”

“VP, commercial finance.”

“What exactly does that title mean? Is he in risk management? Is he an underwriter?”

“Why do you want to know that?”

“Because my boss asked me to find out.”

“What it means to me is that finance covers a broad area, and he's got a lot of clout.”

“Is he involved in automobile floor plans?”

“Probably not directly—they're asset-based, but it's all part of the strength of the borrower and the quality of the loans.”

“Do you report to him?” Austin wanted to know.

“Not directly. He's pretty far up the food chain. I started out in the transactional side of lease financing as a lease portfolio manager. I'm now a vice president in our New York City real estate leasing division.”

“So what are your duties?”

“You know what they are.”

“Just answer the question.”

At that point, Teddy reached over and ran his right hand from Austin's neck to his groin.

“What are you doing?” Austin yelled.

“I thought you might be wearing a wire.”

“Don't be stupid. You'll wreck this car.”

“Asking these questions is what's stupid,” Teddy said, and turned his concentration back to driving and the questions. “I'm in the marketing side. My job is to increase our lease finance portfolios.”

Austin was at the end of the questions he could think to ask. They sat quietly for a while, Austin trying to figure out how difficult their situation was. He told himself it was the bank's responsibility to get its own appraisals, and in any event, it was the appraiser's responsibility to provide a fair and accurate evaluation. Appraisers differed on value all the time. It wasn't in the interest of the bank, any more than it was Wilson's, to dispute past appraisals anyway.

“Where are we headed?” Austin asked his friend.

“Atlantic City. We have no choice. What else can you do with the cash?”

“Yeah, practice is over. Time to have some fun.”

Maria was a talker. She had information. And she was scared. It didn't take long.

“Maria, from what you have told me, you were following Mrs. Bowers' specific directions in accumulating the financial statements, appraisals, and other information from Weaver Construction Ltd. for the mortgage loans, and processing the loan documents to complete these transactions,” said Katherine, laying things out as clearly as she could.

“That's right.”

“And you didn't have direct knowledge that the appraisals were bogus?”

“Correct.”

“You told me you know what's going on from overhearing conversations between Mrs. Bowers and her supervisor in Manhattan.”

“That's the truth, I swear it.”

“Why didn't you discuss this with Mrs. Bowers?”

“Because I thought she'd fire me,” said Maria. “You'd have to know the woman. I can't lose my job. And I don't want to get in trouble. What should I do?”

“I'm a reporter and I can't tell you what to do.” Katherine believed Maria, wanted to help her, and didn't want her to break down. “Is there someone you can go to for advice—a family member, a lawyer—someone you trust?”

“I don't want to talk to my family about this, and I don't want to talk to a lawyer either,” Maria said, reaching for a tissue.

“I attended a symposium with people from law firms, the Long Island Fraud and Forgery Committee, the FBI, the DEA, and the U.S. and local district attorney's offices. They were there to network and better understand each other's role in dealing with financial fraud and white-collar crime. I became friendly with a local assistant district attorney named Carol Martin. You may want to talk to her.”

“What would I say?”

“Again, this is all up to you. You could just tell her the truth. She may already know about this. In any event, she'll be looking for the same thing I am—to get stronger evidence of wrongdoing as high up the chain as she can go. If she believes you will cooperate and will be helpful, that may turn out to be your best protection.”

“Will you go with me?”

“Absolutely. Whether Carol wants me there will be up to her.”

“Arrange it, please. As soon as you can.”

Katherine had the opportunity the following day. She arranged for Maria to meet Carol in private, to arrive at a different time at the public library, and use a study room at the back. Katherine introduced the two women. “Carol, this is Maria DeSanto. She works in the transaction department of CCB—now BNA—in Southampton. Her supervisor is Stacy Bowers, vice president of commercial real estate.”

“Nice to meet you, Maria.”

“As I explained, I spoke with Maria in the course of my ongoing bank fraud investigation of CCB, and I suggested to her that she might want to talk with you. She asked if I'd come with her and I agreed, but it's up to you whether I stay.”

“Let's see how it goes. Do you have an attorney, Maria?” Carol asked.

“No, Miss Kelly suggested I might want to talk with one, but I don't. I haven't done anything wrong. Still, I don't want to get in any trouble.”

“Do you have information that somebody has done something wrong?” Carol asked.

“I've overheard Mrs. Bowers talking to her supervisor at BNA in the city. It involved work I, and others in my department, did in processing loans.”

“Can you be more specific?”

“Are you familiar with loan processing?” Maria asked.

“Prior to coming here, I closed hundreds of commercial real estate loan transactions.”

“Well,” Maria continued, “what bothered me was talk about appraisals being phony and financial statements being built up to look better—to meet minimum standards for the loan.”

“Was this one conversation or more, and over what period of time?”

“Many conversations over the last six months or more.”

“Was there anything in writing about the appraisals or the financial statements not being accurate?”

“No. Not that I've seen. But the appraisals and the financial statements were often signed off on by the appraisers and borrowers, and then they would be changed—big changes—and then they would have to be signed off on again. That might happen once or twice but not a lot. It started happening more frequently. Eventually, I started to think something was wrong.”

“Did you talk with anyone in the bank about it?”

“I mentioned it to one other girl who does transactional work with me. She was bothered, too, but she was afraid if she said something, she'd get fired. I felt the same way.”

“So why are you talking about it now?”

“Because I'm scared—and I don't want my mother and family to read about me in the paper having done something wrong. I've read some stories that Miss Kelly has written. I don't want to be in one.”

Carol turned to Katherine. “Is she going to be in one of your stories, Katherine?”

“I hope not. I'm interested in getting to the heart of whatever schemes are going on and exposing the bad guys, preferably the ones leading the parade.”

“I can understand that,” Carol said. “At this point, I'd like to talk with you, Maria, further and alone. Our investigations have to remain confidential. I'll want to take a statement from you, and if you are willing to cooperate with us, we may well be able to work something out for you. I want you to understand that you always have a right to counsel at any point you wish. Is that understood, and do you want to continue?”

“It is and yes, I do.”

“Would you excuse us for a moment, Maria? I'd like to talk with Katherine, privately, if you don't mind.”

“Sure. No problem,” Maria said.

Katherine followed Carol out into the hallway, where she lowered her voice.

“Thank you for bringing Maria to me. She may be of real help. I should be able to arrange immunity for her. Just between us, we have a BNA real estate connected fraud investigation going on now, and like you, we want the big fish.”

“I'm glad I could help. I realize your investigations are confidential. However, if there comes a point as you go up the line, where you can pass information on to me, either on the record or off, I would appreciate you doing so. I'd rather be the first to know, if possible.”

“I will, to the extent I can. And, I'll be clear what's for publication and what's not.”

“Thanks, Carol. I'll say good-bye to Maria.”

On the personal side, she had never been so content. She was able to spend more and more time with Preston, and with Marcia and P.J., though usually separately. She talked with her mother and grandfather often, had fun with Susan when they could get together, and loved relaxing and playing with Hailey. As if that were not enough, Sean had called several times, and each conversation seemed better than the last.

The only thing that worried her, more than she knew it should, were reports of a Tropical Storm Sandy churning in the Caribbean. She knew she was being silly, living where she did, but she'd never been through a hurricane. The accounts of the havoc wrought by Katrina had been horrific. She told herself not to worry. But as the days went by, updates on Sandy occupied more and more time on the weather channels. What seemed different about this storm were indications from early models that it could actually reach the Northeast—New York City and Boston. She blocked the storm out of her mind and continued to pursue the balance of work and play, never feeling greater fulfillment from both.

By now, there was a real symmetry and incremental growth in her bank stories. An unexpected boost came from a press release Congressman Quinn put out in mid-October. Calling for the elimination of fraud and curbing the wrongdoing in the banking system, he had cited two articles on specific bank schemes of misconduct involving real estate loans and mortgages written by Katherine Kelly of the
Twin Forks Press.
Katherine suddenly found herself not having to nose around for leads and sources—they instead came to her, even on a national level. She soon realized—and reported—that the schemes she was unearthing at Hamptons Bank had been used elsewhere as well in both community and regional banks, and Sol let her run with the story. Her stories had wings, and they soared.

And, thanks to the rapid growth of her relationships and corresponding leads, she was able to increase her weekly story contribution to double digits. Sure, there were some twelve-hour days in there, some missed meals, and some work on Saturdays and Sundays, but she didn't care, because readers (and Sol) were giving her positive feedback. Still, the hurricane occupied more and more space in her mind as the media increased the Sandy drumbeat: why Sandy was a different kind of storm and the widespread devastation it could cause.

As families across America were preparing for Halloween, those in the Northeast were busy making other preparations. New York City's Mayor Bloomberg dispensed pre-storm advice and precautions, as did officials in New Jersey and other areas falling within Sandy's projected path.

When Sandy slammed into the East Coast October 29 around 6:30 p.m., it was clear that the breadth of the storm—a thousand miles wide—was extraordinary and exacerbated by eighty-mile-per-hour-plus winds. The slow-moving nature of the hurricane and the anticipated rainfall prompted experts to predict extreme flooding. When Katherine heard that Mayor Bloomberg, for the first time in history, had preemptively closed sections of the New York City subway system, there was no doubt how serious the situation was.

That Monday and Tuesday convinced the rest of America as images of flooding and destruction too terrible to imagine were viewed day and night. During the worst of the “superstorm,” as the TV had taken to calling it, Katherine remained with Hailey at the newspaper offices, with most of the other key personnel. They watched the televised images of devastation, as the rest of America did, for as long as their electric power and generators lasted, and they worked to update their online edition. They knew that subways had flooded, boardwalks and piers had vanished, and people in many places in the five boroughs, New Jersey, and Connecticut had lost their homes. Lower Manhattan was partially under water; lives were lost on Staten Island. Southampton suffered as well. While the flooding on Long Island was, for the most part, in the low-lying coastal areas along Dune Road and in Flanders and Sag Harbor, electric power losses were far more widespread, affecting some ninety percent of utility customers across the Island. The residents' misery was made all the worse by cold, wet weather.

For some reason, Katherine's apartment had retained power, as did the
Twin Forks Press
. Susan had power, and so did Preston's condo. Too many others were not so fortunate. When Sol had renovated the
Twin Forks Press
building and upgraded its emergency generators a few years earlier, he'd added a stall shower in the men's room—mostly for employees who cycled to work. But now, a few of Katherine's fellow employees and their families were waiting in line to use the shower in the early morning hours.

Katherine and the other three full-time reporters met with Sol and Chuck urgently to discuss what they could do to help. Thankfully, countless citizens in the Northeast metropolitan area and from all over the country provided money and assistance in whatever way they could. The power companies were trying to restore power as quickly as possible, but too many went without help for too long.

Many without power or other help in parts of Staten Island, New Jersey, and Long Island felt abandoned, even though the President, FEMA, the governors, and many others appeared to be vitally concerned and promised to do all they could.

Sandy and a subsequent snowstorm on November 7 knocked out power to more than eight million customers in twenty-one states, including two million in New York. A week later thousands on Long Island and elsewhere still were without electricity. Many of Katherine's readers called, and some wrote to her—telling her they knew she had their interest at heart and needed her help now more than ever.

As the water receded, some even came to the
Twin Forks Press
office to talk with her in person. One was Norman, a pudgy, middle-aged pool-company employee who covered his balding hair with a red baseball cap. Norman told Katherine he was planning to organize a protest later that day outside National Grid's offices and dispatch center on Montauk Highway in Water Mill. A growing number of customers were outraged at what they saw as the company's inadequate response and failure to replace outdated or obsolete management systems to handle large-scale outages like this one. Norman wasn't sure how many people were going to show up, so Katherine was the only reporter he'd told so far. Another protest against National Grid in Hicksville had drawn large crowds, and he was hopeful that it could happen in Water Mill, too.

It was still early, and most of the other reporters were either not in yet or busy taking care of their homes and families. Katherine found Sol and Chuck in the break room and told them she wanted to cover the protest.

“A lot of our people are without power. You've seen the protests. They feel ignored, left out, and that no one's listening to them. Let's give them a hand, help them be heard,” Katherine said.

“Thoughts?” Chuck asked.

“Let's go out there and get video of some of the protesters. Push out the videos on our website and our YouTube channel, too. Let the protesters tell their own stories,” Katherine said.

Chuck hesitated, arguing that they'd already covered the story from numerous angles and they were operating with a reduced staff. Sol listened to Chuck's objections but in the end gave her the green-light. “Go ahead. Take Esther along to help. You do the interviews, and she can do the editing and uploading on site.”

Katherine checked her watch, called Norman on his cell, and told him she wanted to try to interview some of the residents at the protest. She asked if he'd be willing to help.

“You bet. These people have had enough, and they feel like no one's listening to them.” She arranged to meet him and his group at 1:30 p.m. and go over everything. She asked Sol if he would mind looking after Hailey.

“Okay, kiddo. Happy to be both your publisher and your dog sitter.”

Katherine went in the break room, downed a couple of cups of black coffee, and thought through what she wanted to cover and how. She wanted subscribers who did have power and Internet connection—even on mobile devices—to like and share the videos on Facebook, drawing attention to what was happening in their own backyards. Much of the attention from the New York media, even WABC-TV and the other local TV outlets, had been focused on Staten Island and other places near the city. Frankly, it was far easier for the outlets to send reporters and TV crews there. Even Newsday, the big Long Island daily newspaper, barely covered the North and South forks of Long Island. The Hamptons had largely been forgotten by everyone but the local weeklies, and Katherine was determined to change that.