Shell Game (Stand Alone 2) (36 page)

Cunningham glared next at Bruce Couples, the OCC man. “Your agency forced the previous owners of Broad Street National Bank to write down its commercial real estate loans to levels deeply discounted from real market values. I was shocked at the write downs. Candidly, that’s the main reason I recommended to Mr. Folsom that he invest in the bank. The deep discounts created a very profitable opportunity for us.”

Cunningham then turned to look at Rentz. “What do you think would have happened if we started making real estate loans after the OCC and the FDIC criticized the former owners for doing the same thing?”

“But, Mr. Cunningham, the OCC never told the previous bank owners or Folsom Financial Corporation to not extend credit to Winter Enterprises, did they?”

“No, not that I’m aware of.”

“I can understand why the previous owners would have decided to eliminate as much of their commercial real estate debt as possible. They were trying to survive. They needed to raise capital to prevent the FDIC from taking over the bank. But what’s your excuse? You don’t have that sort of pressure on you. Why would you destroy a sound, profitable business?”

Cunningham’s face flushed red again. He looked at Folsom, as though searching for a life line, but none was forthcoming. He muttered something under his breath and then looked back at Rentz.

“Because, Mr. Rentz, Gerald Folsom told me to take down Edward Winter and his company.”

Jeffrey Rose jerked forward in his chair and shouted, “That’s preposterous. Mr. Cunningham is trying to place blame on my client, who has had nothing to do with the daily workings of the bank. He trusted Mr. Cunningham to manage the bank’s affairs in a legal and ethical, but profitable manner. Obviously, he has failed to do so.”

“Calm down, Mr. Rose,” Rentz said.

“Just a minute, Mr. Rentz,” Rose said. “I have a question to ask Mr. Cunningham.” Without waiting for approval from Rentz, Rose pointed at Cunningham and said, “Do you have anything in writing—a memorandum, a letter, an email—from Mr. Folsom directing you to do anything untoward, including
taking down Edward Winter
?”

Cunningham’s tough demeanor had dissolved. “Mr. Folsom always gave me direction by telephone or in face-to-face meetings.”

“How convenient!” Rose said, leaning back in his chair.

Rentz looked at Folsom. “So you have had nothing to do with the day-to-day bank operations and you never told anyone to
take down
Winter Enterprises.”

“I resent you asking that question,” Rose interjected.

Rentz ignored Rose and said to Folsom, “Answer the question.”

“Of course not.”

“What was your relationship with Donald Matson?”

“Mr. Matson and I had a professional relationship. We worked effectively in saving failing banks, and he managed several loan pool transactions I purchased from the FDIC.”

“Uh huh,” Rentz said. “Did you ever give Mr. Matson gifts?”

Folsom half-rose from his chair. “That’s insulting; that would have been illegal.”

“You’re right about that, Mr. Folsom. So, please explain these.”

Rentz opened a file in front of him and extracted several sheets of paper. He passed copies to Folsom and Rose.

“Those are copies of note cards found in two valises holding $2.055 million in cash. Those valises were removed from your home, Mr. Folsom, by the Philadelphia Police Department. We’ve verified the signatures on two of the cards as being Donald Matson’s. Would you explain why Mr. Matson would have entrusted that amount of cash to you? And maybe you can tell us where he got that much money.”

“Oh come on, Rentz,” Rose said, after cursing in his mind his cop friend in the PPD’s Evidence Room for not getting back to him before this meeting. “This is ridiculous. I could give you a half-dozen explanations.”

Rentz looked at Rose as though he were staring at a cow paddy. “I’m sure you could, Mr. Rose, but I’m interested in the truth.” He looked back at Folsom and said, “Do you know what the annotations on the third card represent?”

“Not a clue,” Folsom said, showing an innocent, toothy smile.

“Dates,” Rentz continued, “identical to the dates of every transaction you closed with the FDIC and which Donald Matson managed. In case you haven’t had the time to add up the numbers next to those dates that cover a twenty-two year period, the total comes to $2.5 million. That’s a lot of money. I wonder how Matson accumulated that kind of nest egg.”

“I’m sure I don’t have any idea,” Folsom said, looking bored.

Rentz looked back at Rose. The lawyer looked as though he was about to grab his client and bolt out of the room. Rentz realized he needed to bring the meeting to a climax before Rose did just that.

“Mr. Folsom, are you surprised that Mr. Couples with the OCC is here?”

“What’s one more government bureaucrat?” Folsom said.

“Well, let me tell you. Ms. Moskowitz called Mr. Couples and asked him to give her the names of the heads of the examination teams that examined each bank you and your company have purchased from the FDIC. We were very surprised to learn that the same crew chief was in charge of every bank examination. In other words, Abigail Makris headed up the crew that performed the examinations on banks that were shortly thereafter declared undercapitalized and were taken over by the FDIC. In each of those bank takeovers, the former owners filed formal complaints with the OCC, claiming the examinations had been improper and had come to inaccurate conclusions. Needless to say, the complaints were essentially ignored and the examinations formed the basis for the government’s takeover of those banks.”

“I hope you have a point here, Mr. Rentz,” Rose said.

Rentz couldn’t help himself. He allowed a small smile to cross his face. “What do you think Ms. Makris told Mr. Couples when he confronted her with the amazing coincidences he had discovered?”

Folsom’s face suddenly went pale.

“No idea, Mr. Folsom? Ms. Makris was relieved to finally disclose what she had done and how she had violated her principles and her oath to the agency. All for money, Mr. Folsom. $300,000. Cheap at ten times the price, wouldn’t you say?”

“We’re out of here,” Rose growled, shoving his chair back against the wall and standing up.

Rentz watched the lawyer move toward the door. Folsom followed Rose. Rentz waited until Rose’s hand was on the door knob and then said, “Don’t you want to hear what comes next?”

“We’ve already heard enough,” Rose said.

“It’s your client’s money.”

Folsom whipped around and glared at Rentz.

“Here’s what’s going to happen, Mr. Folsom. The FDIC is going to rescind your purchase of Broad Street National Bank. It’s going to manage the bank until Mr. Couples can complete an investigation into what role his examination crew chief played. If we find that the examination crew chief forced the demise of Broad Street National Bank, then we will make restitution to the former owners.”

Rentz shook his head. “I can’t even imagine what we’ll do with the other banks you bought from the FDIC, but in any case, we’re going to hold in escrow the investment you made in Broad Street National Bank and use it to pay claims that will surely arise once all of this gets out.”

“You can’t do that,” Folsom shouted. “I put $500 million in this bank.”

“Oh, but I can. You know what else I can do? What I’ve already done? I’ve put a hold on $150 million in cash and securities you have deposited in various other banks, to be used to reimburse the Broad Street National Bank clients you have damaged.”

“I’ll sue your ass for breach of contract and—”

“Please do, Mr. Folsom,” Rentz said cheerfully. “I can’t wait to meet you in court.”

Folsom pushed Rose out of the way and barged out of the room.

Rentz waited until Rose had left as well and then turned to Cunningham, who had his elbows on the table, his head in his hands.

“I don’t know whether you did anything illegal, Mr. Cunningham, but I am convinced you acted unethically. Here’s the deal I’m going to offer you. I think you can shine a lot of light on Folsom’s operations. You cooperate with us and I’ll protect you as much as possible. I want you to continue to work here at the bank to remediate the problems you created for bank borrowers. I’m going to ask Sol Levin to come back to the bank and resume his role as president. You will report to him if he accepts. What’s your answer?”

“Thank you, sir, yes. I’ll do everything I can.”

“Good.”

“Ms. Moskowitz, I want you to work out of our Philadelphia office and collaborate with Mr. Couples until his investigation is completed. I’m going back to D.C. to make the director aware of what’s been going on.” That ought to be fun, he thought.

“What about Folsom?” Moskowitz asked. “You’re not going to just let him walk away?”

“As soon as you and Bruce here are finished with your investigation, I’m going to turn over everything to the U.S. Attorney in Philadelphia. I don’t think Folsom will be walking much of anywhere, except maybe in a prison exercise yard.”

Rentz got up to leave.

Cunningham stood with him. “Can I make a suggestion, Mr. Rentz?”

“That’s part of your job, Mr. Cunningham.”

“I’d like to call each of the customers whose loans Folsom ordered not to be renewed and let them know we’ve rescinded that decision.”

“Excellent idea,” Rentz said.

The telephone rang on Edward’s desk. The screen on the console displayed that the call was from Broad Street National Bank’s main telephone number. Edward looked across his desk at Nick and Paul, his stomach tensing.. They were preparing an agenda for the Saturday morning meeting with their restaurant managers.

“It’s the bank. They’re probably calling about executing the documents turning the business over to Folsom.”

Edward paused, then punched the speaker button with more force than necessary. “Winter,” he barked.

“Mr. Winter, it’s Sanford Cunningham. I—”

“Where do you want me to sign the papers, Mr. Cunningham? I’d like to get it over with.”

“Actually, that’s not why I’m calling. We’ve had a big turn of events here at the bank. Mr. Folsom is no longer associated with Broad Street National Bank and I have been authorized by the FDIC to inform you that the bank will be renewing your loan according to the terms of your original note. And the hold on your deposit accounts will be removed.”

“This isn’t a joke?” Edward asked, suspicious about the sudden change.

“No, sir. Uh, I want to apologize to you for the way you have been treated. I don’t expect you to forgive me, but I promise I will do all I can to make amends.”

Edward’s eyes were saucers when he looked at Nick and Paul. “I think you’ve gone a long way toward making amends, Mr. Cunningham. What happened to Folsom?”

“He’s in big trouble. The Feds are going after him for bribing government officials, among other things.”

A sudden picture of his father flashed in Edward’s brain. It’s payback time, he thought.

“I’ll have a letter in the mail Monday morning confirming the loan renewal,” Cunningham said. “Please call me if you have any questions or need anything.”

“Thank you,” Edward said.

After the call, Edward spread his arms in disbelief. “What the hell just happened?”

“I’m not sure,” Paul answered, “but I sure am going to find out. And if that bank thinks they’re going to get off by just renewing your loan, they’re nuts. They’re going to pay a big price for what they put you through.”

“Let’s put off thoughts of legal action for a while,” Edward suggested. “Until we figure out what’s going on at the bank.”

Nick laughed. “Does this mean I don’t get to work for Folsom?”

Edward and Paul laughed with Nick. “Are you complaining?” Paul asked between chuckles.

“Well, I
was
going to be president of Winter Enterprises,” Nick said, still laughing.

“You’re still going to be president,” Edward said. “You’ve earned it. I’ll continue to be chairman of the board, but you’re going to run the company’s day-to-day operations. I think the plan to expand to New York is still a good one. I’ll assist you in getting things started there.”

“Jeez, Eddie, this is sure a day of surprises,” Nick said, smiling.

“I assume you’re accepting the promotion?” Edward said.

“Yes, yes, yes. Thank you. I’m thrilled.”

“Let’s finish up here. Nick, you’re going to run the meeting tomorrow. I’m going to sleep in, pick up Betsy from the hospital, and spend the day with her and our son. Paul, have you drawn up Nick’s employment agreement?”

“I’ll have it done next week,” Paul said. “But we should celebrate tonight.”

Edward noticed Nick’s smile fall from his face. “What’s wrong?”

“I promised Annie and the kids we’d go out to dinner tonight.”

“Then that’s what you’re going to do. Paul and I will join Katherine, Carrie, and Wendy at the hotel. Paul, does that sound okay to you?”

“You bet!”

The three of them worked for another hour. Edward told Paul he’d meet him at the Marriott at 9; he wanted to visit Betsy and the baby at the hospital before going to the hotel. Then he walked out of the building with Nick; their cars were parked next to one another’s in the lot.