Chapter 31
CHAPTER
IN HIS HOME STUDY, NASH stared at his personal laptop screen.
He had connected to the internet using a burner phone hot spot and a VPN address.
He had full access to all records and databases having to do with his division.
And as a member of the board of directors he also had access to the records and financial performance of the rest of the company.
He was diligent about reviewing this information, so his delving into these materials would raise no suspicions.
But he had chosen to be overly cautious by conducting this search via his personal devices and the use of a VPN wall because all computer keystrokes on company computers were monitored and the search history captured for certain eyes to see.
And there would be a record of who had accessed the site.
Fortunately, the password was the same for all board members, so the company wouldn’t be able tell the identity of the user solely through that.
Nash didn’t know much about money laundering, but he had done some quick research.
He had found that the money had to be placed, layered, and then integrated or extracted.
And there were myriad ways to do that, but it basically came down to mingling ill-gotten gains into the legitimate financial world in a way that would evade scrutiny.
Deputy AG Duvall had said that the government believed Sybaritic used parasitic elements presumably as the placement stage of the laundering.
He wasn’t sure what “parasitic elements” meant, exactly, but it could be the use of shell companies, staged transactions, and doctored or duplicate sets of business and transaction records.
Cho, Singer, and Lombard had worked at three different companies, all acquired by Sybaritic.
All really acquired by me, thought Nash uncomfortably.
He had pulled up the financial records for the trio of companies and had already spent the better part of a day going over them. He was about to give up when something odd caught his attention.
On the surface it was innocuous enough: an asset purchase by Danielle Cho’s company, PLA Corp.
, with the seller being a firm based in Hong Kong.
The purchase price had been $100 million.
The amount had been paid partly in cash and partly by promissory note.
There was nothing strange in that, but what was unusual was the promissory note had been issued not to the selling party, but to another company with a very similar name.
In fact, the names were identical except one was “LLC” and one was “LLP.”
So thirty million dollars in the form of a note went to LLP instead of LLC. And who was behind LLC?
When Nash looked up LLP online, he found that it had been sold six months ago for exactly $34.
5 million. It appeared that the only asset the company had was the promissory note issued by Cho’s company, PLA.
When he did a calculation Nash found the additional $4.
5 million represented the total interest payments due.
But when he checked the financial records for PLA, he could find no interest payments being made at all.
When he looked at LLP he found that it had been incorporated apparently for the sole purpose of acquiring the note.
When he researched LLC—the actual selling company that had been paid the rest of the purchase price by Cho’s company in cash—Nash found that it had quickly wound up operations and dissolved, taking the $70 million along with it.
And what exactly had PLA purchased with the $70 million? Because it was clear that the $30 million note and interest thereon would never be paid.
The answer—which aligned with PLA’s business of acquiring Pacific Rim assets—was a food-processing plant in Vietnam that had been closed down by the government six months later for numerous building code and health violations.
So the entire investment had been written off as a loss by PLA.
The $30 million note should have continued to be listed as a liability of PLA, but it had mysteriously disappeared from the company’s balance sheet.
Nash sat back and closed his eyes. This fulfilled the trio of elements of money laundering: placement, layering, and integration/extraction.
Seventy million dollars had been funneled from PLA to a company based in Vietnam.
That company no longer existed. The asset purchased, namely the processing plant, no longer operated.
PLA had dropped a $30 million liability from its balance sheet, but otherwise had, on paper, lost seventy million on the deal.
But there was one remaining detail. Where had the $70 million in cash that PLA used to buy the processing plant originated from?
Nash got incredibly lucky by happening on a password that had apparently been recycled. What was revealed was, in essence, a second set of electronic books.
As he hunkered down and went through the screens, the financial happenings started trickling out.
PLA had borrowed $104.5 million—which represented the cash and note portion of the purchase price plus interest payments—from two firms, one based in Chad and the other in Haiti.
Those countries did not have the best reputations when it came to anti-money-laundering regulations, Nash knew.
For that reason he avoided doing business with anyone who used either country for anything.
So presumably Victoria Steers had laundered nine figures’ worth of illegal proceeds and walked away with $70 million of clean money. Not a bad price to be paid, particularly when one’s profit margins on the fentanyl side were thousands of percentage points.
But now came the obvious difficulty. PLA had suffered a $70 million loss on paper, plus it still owed the repayment of the loan.
That would place it squarely on the acquisition division’s P&L statement, meaning that the purchase of PLA would have been a terrible deal for Sybaritic and seriously impacted the returns of Nash’s division.
But that had not happened, Nash knew, because he monitored all acquired companies’ performances closely.
In fact, looking at PLA’s financials, the loss due to the processing plant’s closure had been more than made up by a $150 million profit from the sale of…
Nash couldn’t quite believe it. Another processing plant in Vietnam.
Acquired the previous year for $50 million, PLA had then sold it for $200 million.
They just cleaned another chunk of change in that deal. And PLA can offset nearly half of the gain on that sale by the loss they’ll take on the processing plant’s being shut down.
Nash exited out of the accounts and thought about all of this.
So Cho must have discovered these bogus transactions, just like Lombard and Singer no doubt ferreted out financial misdeeds at their own respective companies.
And Steers’s involvement in the companies that I acquired has actually helped their performance, which means I’m not as smart as I thought I was.
But then why was Rhett’s division racking up all those losses?
The answer hit him immediately.
They’re losses on paper only, and by using two sets of books, they’re able to shield actual, legitimate income from taxation, which means illicit funds are flowing right through my company and taxes that should be paid aren’t being paid.
Both Steers and Rhett Temple are walking away with record profits free from taxation and hidden behind false sets of electronic books. To his father, Rhett’s a loser, but in reality, he’s probably a bigger winner than I am.
Which means my boss really is up to his neck in crime.
Then something struck him.
Were our accountants and auditors also in on it? Some of them must be. Hell, am I the only one at the company not in on it? Bernie Madoff, the king of the Ponzi players, had always claimed that he acted alone. But that was impossible.
But then an obvious point occurred to Nash.
Cho, Singer, and Lombard clearly weren’t in on it, which is why they’re all dead.
And now there’s me right in the crosshairs.