Lake Tahoe, Nevada - Saturday, July 1, 1995 3 Days Prior . . .

Lake Tahoe, Nevada

Saturday, July 1, 1995 3 Days Prior . . .

SANDY SAT ON HIS FRIEND’S DECK AND SIPPED BEER WHILE HE STARED down at Lake Tahoe. Tom Quinn had moved into the den as he pored over the documents Sandy brought him. Sandy was admiring two sailboats cutting through the center of the lake when Tom reappeared through the sliding doors that led from the kitchen. He had two fresh beers gripped between the fingers of his left hand, the files in his right, and his laptop tucked under his arm.

“Here,” he said, handing Sandy the beers.

“Figure any of it out?”

Tom nodded. “Most of it. And it’s on a huge scale, Sandy. Lots of money and lots of laws being broken. It’s no wonder these files got that guy killed.”

Tom placed the files on the patio table. A yellow legal pad that contained his notes rested on top. He set his laptop computer next to the files and went back inside, emerging a moment later with a long cable and extension cord for power. He sat down and fired up the laptop.

“So here’s what’s going on,” Tom said, tapping on the keyboard. “They’re stealing client money, in a nutshell, but they’re very clever about it. They’re taking settlement checks from cases the firm has either won or successfully negotiated, depositing the full amount into a dummy account—essentially a shell company attached to the Margolis law group—and then issuing a formal settlement check to Margolis and Margolis, which gets deposited into an escrow account. The key is that this formal payment into the escrow is less than the actual settlement.

“Let’s say a five-million-dollar settlement comes in. This guy deposits the five million into the dummy account, then transfers four point nine million into the firm’s escrow account. It’s easy to miss a hundred grand when you’re dealing with these huge sums, and from what I can tell Margolis and Margolis frequently does. The client then gets paid from the escrow account. The math gets complicated because the firm keeps thirty-three percent, plus expenses. The client gets the balance. And it’s in the expenses where the firm is burying the skimming. In this example of a five-million-dollar settlement, the hundred grand skimmed off the top was explained away through a long list of bogus expenses and no client ever picked up on it. Until this guy, Baker Jauncey, sniffed out the fraud. Only once, according to what’s in these files, had a client argued about the amount they received. And in that case, the inconsistency was blamed on an accounting error and was corrected. No other clients said a word. The scam’s been going on for years according to the dates listed on the files.”

Tom pulled one of the documents over so that Sandy could see.

“Here’s an obvious one. The Margolis law group filed a suit on behalf of Janet Romo in 1993 against a grocery store chain where she slipped and fell, injuring her hip and back. The case was settled out of court for a hundred fifty grand.”

Tom pointed at the page.

“See? It clearly states the settlement amount of one fifty right here, and that matches the amount deposited into the dummy account here.”

Sandy followed Tom’s index finger as it slid between the two matching numbers.

“But here”—Tom turned the page and pointed at a new number—“it shows that a settlement check was issued to Margolis and Margolis in the amount of one hundred twenty-five thousand.”

“Twenty-five K off the top?”

“Exactly. The one twenty-five goes into the escrow account, the twenty-five grand is written off in expenses, and a check is issued to the client. And that’s just the beginning. There are dozens of other examples in the files, and the amounts range from ten grand to a hundred.”

“All stolen funds?”

Tom nodded. “Yeah. I haven’t made it through all the files, but the total is just over five million dollars so far. Enough to kill for, had someone discovered this and threatened to expose those involved.”

Sandy slowly nodded his head. “Who were the attorneys involved?”

“That’s the problem. In order to pull off this level of fraud, shell companies and numbered accounts were created. One main company where the original settlement checks were deposited, and several others that the stolen funds were laundered through. I put a list together of every LLC, S corporation, and sole proprietorship listed. Other than those companies, there are only two other entities referenced in these files. The first is the Margolis firm. The second is the guy signing the checks that were eventually issued to the firm after a percentage was skimmed off the top.”

“Who was it?” Sandy asked.

“He’s listed in all the documents as Guy Menendez.”

“Guy Menendez?”

“Doesn’t ring a bell?”

“No.”

“I’m not surprised.” Tom opened his laptop. “Are you familiar with the Internet?”

“A little. The sheriff’s office has a website but it was all set up by IT guys from the county.”

“Margolis and Margolis has a site,” Tom said, tapping his keyboard. “And on their website is a list of every attorney at the firm. One hundred sixteen in all.” Tom turned the laptop to Sandy. “Not one of them is named Guy Menendez.”

“So who the hell is he?” Sandy asked.

“An alias, I’m guessing. But if you figure out who this guy is, I’m pretty sure you’ll know who killed Baker Jauncey.”