Free To Trade

CHAPTER 12

First thing the next morning, I cancelled my meetings for the day. Something had come up I said. I wanted to spend my day in New York following up on what I had heard the day before.

Two questions intrigued me. First, what had happened to Shoffman, and second, could I find out anything more about how Waigel had put the Tremont Capital deal together?

I tried to deal with the first one first. I rang information to find out the number of the nearest police station to Bloomfield Weiss. I suspected that would be where his disappearance would have been reported by the firm. I dialled the number from my hotel room.

I was transferred a couple of times until I ended up with a friendly woman who told me that the disappearance had been reported to that station, but that the inquiry had been taken up by another precinct, on West 110th Street, which was near where Shoffman had lived. I thanked her, left my hotel room, and took a taxi up to the Upper West Side.

Fortunately, the police station was fairly quiet. Even more fortunately, the desk sergeant turned out to be one of that rare breed of ardent anglophiles that are scattered throughout America.

'Hey, are you English?' he asked in response to my greeting.

'Yes, I am,' I said.

'Welcome to New York. How do you like it here?'

'Oh, I think it's a fine city. I always enjoy coming here.'

'So you're from England, huh? My mother was from England. A GI bride, she was. Where are you from in England?'

'London.'

'Oh yeah? So was my mother. Maybe you know her family. Name of Robinson.'

'I'm afraid there are quite a few Robinsons in London,' I said.

'Yes, I'm sure there are. I went over there to visit them a couple of years ago. I had a great time. Anyway, how can I help you?'

The policeman standing next to him was big and beefy, and his name tag had Murphy written on it. His scowl deepened as he listened to this conversation.

'Yes, I am trying to find something out about an old university friend of mine, Greg Shoffman. He was reported missing at this station four months ago, and I would like to try and find out what happened to him.'

'Sure. Wait a moment and I will see if I can find his file.'

I waited for about five minutes, and then the policeman returned, a very thin file in his hands.

'We don't have much on him. He was reported missing on April twentieth. No trace of him found at all. No body, no empty wallet, no driver's licence. His credit cards remained unused. The investigation is closed.'

'But how can a man disappear without trace?' I asked.

'This is New York. We have six murders a day here. Sure, we find the bodies of most of them. But not all of them.'

'Where was he last seen?'

The policeman referred to his file. 'The last reported sighting was when he left his office at seven o'clock on the nineteenth. Neither his doorman nor any of his neighbours reported seeing him arrive at his apartment. He lived alone. No wife, no girlfriend we know of.'

'What was his address?'

The policeman glanced at me, his eyes narrowing a little. 'I thought you said you were an old friend of his,' he said.

'Yes, I'm sorry. I left his address in England. I have his work number, so when I came over here I rang him at work to fix up dinner. Then they told me about his disappearance. It was a real shock. I would very much like to find out what really happened.'

The policeman's face softened. He gave me an address just two blocks away from the police station. Then he said, 'Look, mister. You are not going to find out anything, however hard you look. I have seen dozens of cases like this in the past. Unless the victim's body or his possessions are found and reported to the police, you never get anywhere. It's true that if we had more manpower and less murders we could have spent more time on this case, but I doubt whether we would have got any further.'

I thought about it. He was probably right. I sighed and thanked him for his trouble.

'Not at all. A pleasure to help. And have a pint of bitter for me when you get back.'

I assured him I would and left, thinking how lucky I had been to come across such a helpful New York cop. His Irish colleague's scowl followed me all the way out of the police station.

I walked the two blocks to Shoffman's apartment building. It was in one of those frontier neighbourhoods, where the more adventurous young urban professionals made forays into the run-down districts of Harlem. Neat brownstone buildings, built towards the end of the nineteenth century and renovated towards the end of the twentieth, rubbed shoulders with disused warehouses and builder's merchants. A Korean fruit-and-vegetable store stood on the street corner, spick and span, ready to sell its wares to returning office workers. At this time of the morning the streets were nearly empty. An old black man shuffled along the sidewalk, muttering to himself.

It is impossible for an Englishman to understand the real workings of a neighbourhood such as this. Brought up on a diet of TV cop shows and lurid news stories, it is all too easy to see New York as a battleground between white professionals and a black underclass. Shoffman lived right in the middle of the battle lines. The reality of the situation is probably infinitely more complicated than this, but, as an Englishman dressed in a suit, walking those streets on the outskirts of the notorious Harlem, I found it easy to believe that Shoffman could have become a casualty of this war.

The lobby of his apartment building was well furnished, and there was a doorman sitting behind a desk, guarding the passage to the lifts. I asked him about Shoffman, giving him the old-friend-from-England routine.

Yes, he remembered Mr Shoffman. Yes, he had been on duty on the evening of April nineteenth. No, he had not seen Mr Shoffman come home, neither had the doorman who relieved him at midnight. Yes, he would have remembered, he had been looking out for him to give him a parcel. No, the parcel was nothing special, just some books from a book club. No, he could not show me the apartment, it had a new owner.

I left defeated, hailed a cab, and went back to the hotel.

Back in my room I flopped on to my bed, stared at the ceiling and thought.

It looked as though I had drawn a blank on the answer to my first question. I only had a day left in New York. I was sure the policeman was right. My chances of finding out what really happened to Shoffman were very small. But I was still convinced that his disappearance so soon after his phone call to Honshu Bank was not a coincidence. Someone had found out that he had discovered Tremont Capital was a fraud, and he was now dead.

That still left the second question. How had Waigel put together the Tremont Capital deal? Who had he been dealing with? Where had the money raised by the private placement been paid?

There must have been some paperwork associated with the transaction. Hamilton would soon be looking for traces of it in Curacao. But there must also have been some at Bloomfield Weiss. The librarian in London had been adamant that none of it was in any central filing system. Of course it might have all been thrown away. But on the other hand the shell company still existed, it was still paying interest. No, it was quite possible that Waigel might have some of the records concerning the deal in his own private files. How could I get to his filing system?

I called Lloyd Harbin.

'Hallo. This is Paul Murray. I was just calling to thank you for showing me around yesterday.' I tried to keep the insincerity out of my voice.

'Oh sure, think nothing of it,' Lloyd said in a get-off-the-phone-quick-I've-got-something-better-to-do voice.

'I wonder if you could give me Tommy Masterson's home number?' I asked.

'I'm afraid Tommy has been terminated. He no longer works here.'

'None the less, I would be very grateful if you could help me. You see, I lent him my pen, and he didn't get a chance to return it. I have owned it for several years and it means a lot to me.'

'I am sorry, Paul. I just can't give out information about former employees.'

I should have known the sentimental approach wouldn't work with Lloyd Harbin. I would have to speak to him in his own language. 'Lloyd, listen carefully. De Jong & Co. is soon going to start a buying programme of junk bonds. It will total two hundred million dollars' (a lie but who cared?). 'Now, we can either buy them from Bloomfield Weiss or we can buy them from Harrison Brothers. The choice is yours.'

It worked. 'Now, hold on, don't do anything rash. I'll just get it for you.' He was back in less than half a minute. '342-6607.'

'Thank you. It will be a pleasure to do business with you,' I lied, and rang off.

I caught Tommy at home and asked him if he would mind meeting me for lunch. We agreed on an Italian restaurant, Cafe Alfredo, near where he lived in Greenwich Village.

Tommy without a job seemed much the same as Tommy with a job. The same laid-back air, the same amiability.

'I was sorry to see you let go yesterday,' I said, using the standard euphemism for 'getting fired'.

'Thank you,' said Tommy. 'It was a bit of a surprise.'

'I was amazed at the way they did it. Is that how it normally works? You get hauled off to some office somewhere and don't even get a chance to go back to your desk.'

'That's the way it works,' said Tommy, 'although usually you get a little more warning of what is going to happen.'

'Why did he do it?' I asked.

'He doesn't like me,' Tommy said. '"My attitude did not fit in with the Bloomfield Weiss culture." And, "I was undermining his authority." I don't think they like too much independent thought at Bloomfield Weiss. They don't like people who call a rip-off a rip-off instead of a "unique investment opportunity". Still, without me they will sell less bonds and make less money, so that is something to be grateful for.'

'You must be angry,' I said.

'Oh, I'll be all right. This has probably been a good thing. It will force me to go and find somewhere better to work, somewhere that employs human beings. I may even go back to California and let the Bad Apple rot.'

For all the brave face he was putting on it, Tommy could not suppress the bitterness in his voice. Good, I thought.

'I wonder if I could ask you for some advice,' I said.

'Sure.'

'My firm is the proud owner of one of those "unique investment opportunities" you were talking about. In fact it's so unique, I am pretty sure it's illegal. I can't do anything about it until I have some hard evidence.'

'What was the transaction?' Tommy asked.

'It was a private placement done eighteen months ago called Tremont Capital. Dick Waigel structured the deal.'

'Never heard of it. I'm afraid I can't give you any advice on that.'

'I don't need any advice on the deal itself,' I said. 'But I do need advice on how to gain access to Waigel's files.'

I looked at Tommy closely, hoping I had not gone too far.

He looked back. 'I can't do that,' he said. 'What if they found out I helped you?'

'They can hardly fire you,' I pointed out.

'True,' Tommy smiled. 'But if they did catch me, their lawyers would have me for breakfast.'

'I'm sorry, Tommy,' I said. 'I had no right to ask you. Please just forget we ever had this conversation.'

There was silence for a moment. Then Tommy relaxed again and smiled. 'Hell, why not? I don't owe them anything and it sounds like they owe you a lot. I'll help.'

'Great!'

'Waigel runs a department of five or six people. They all work in one room, but he has had his own office built. It takes up half the space, and has curtains for greater privacy.'

Typical Waigel, I thought. His ego required as much space as all six people who worked for him.

'I know Waigel's secretary, Jean, quite well. She's a nice woman, but she can't stand his guts. She's on the point of quitting. I think she will probably help us, especially when she hears what has happened to me. She can let us know when he is out. We go up there, and she shows us into his office, as though we had an appointment with him. Simple.'

'Good,' I said. 'But how do we get in the building? Haven't they taken your pass away?'

'Yes they have, but I am sure Jean can take care of that.'

'There's no need for you to come,' I said. 'I can go by myself.'

'Oh yes there is. If Jean's going to let you into Waigel's office, I am going to have to be there too.'

'Is there anything between you and this Jean?' I asked smiling.

Tommy laughed, 'Oh no, nothing, I promise you.'

We finished our lunch, I paid, and then we set off for Tommy's apartment so that he could ring Jean. I needed to get into Waigel's office that afternoon.

Tommy's apartment was on the second floor of an old brown-stone on Barrow Street. We walked up the stairs, and as Tommy fished for his keys, he hesitated. 'Oh, I have a friend of mine staying with me. Gary. He works in the evenings, so he may well be in.'

He opened the door, and I followed him through a small hallway into a tastefully decorated living room. There was an expensive oriental rug on the floor, and another on one wall. A number of attractive abstract paintings adorned the other walls. Gary was sitting in a comfortable leather armchair. He shouted a welcome as we came in.

Gary had a full moustache, a crew cut, and was wearing tight light blue jeans, the uniform of the gay New York male. So this was why Tommy had laughed when I had mentioned the possibility of a relationship between him and Waigel's secretary. I looked again at Tommy. There was no outward sign of his sexual orientation.

Tommy caught my look. 'OK, so I'm gay. Does it surprise you?' he said.

'I suppose it does a little,' I said. 'But I'll get over it.' I couldn't suppress an involuntary chuckle.

'What are you laughing at?' asked Tommy, looking at me suspiciously.

'Oh, I was just thinking of Lloyd Harbin's face if he ever found out.'

Tommy smiled. 'Yes, I see what you mean. Mind you, I saw him in a bar on Christopher Street a few months ago with some very unsavoury company. Do you want some coffee?'

Tommy made some coffee and then called Waigel's secretary. While he was on the phone I sipped my coffee and chatted to Gary.

After three or four minutes Tommy put down the phone. 'Waigel's out now, and won't be back for an hour. If we are quick, we should be able to find what we want before he comes back. Just wait a moment while I get changed.'

A minute later Tommy emerged from his bedroom in a suit. I put down my coffee, said goodbye to Gary, and followed Tommy out of the door. We quickly found a cab, and headed downtown to Wall Street.

We pulled up outside the great, black, looming building of Bloomfield Weiss. We took a lift up to the reception area on the forty-sixth floor, which was where Corporate Finance was located.

Tommy walked up to the receptionist and said, 'Tommy Masterson and James Smith to see Mr Waigel.'

The receptionist looked at Tommy and said, 'Don't you work here, Mr Masterson? I thought you were on the trading floor.'

Tommy gave her a friendly smile. 'I used to work here until very recently,' he said.

The receptionist looked at her book. 'Well if you have an appointment, I guess it's OK.' She tapped some buttons on her phone. 'Jean? Mr Waigel's guests are in reception.' She put the phone down. 'Please wait here, gentlemen.'

Jean was out in a flash. She was a tall woman with round Lennon glasses and long brown hair plaited down her back. She had a baggy blouse and a long skirt. She looked as much like a hippy as one can look on Wall Street, which is not very much. She showed no hint of recognition of Tommy. She led us through some corridors and into an open-plan office. There were six desks cramped into a small area. Five of them were occupied with people hard at work. One guarded a glass-encased office on one side of the room. There were curtains on the inside of this office, making it impossible to see in.

'I am afraid Mr Waigel is not expected back for another half-hour,' Jean said. 'I am terribly sorry for the mix-up on appointment times. I can't think how it could have happened. Would you like to wait or come back later?'

'We would like to wait if we may,' Tommy said.

'Well, why don't you wait in Mr Waigel's office until he returns?' said Jean.

As she showed us into the office, Tommy gave her a broad wink. She smiled back at him and closed the door on us.

The office was large, with a big desk, two armchairs, a sofa, and a coffee table. The room was littered with 'tombstones', advertisements of previous deals encased in clear plastic blocks. Waigel had done a lot of deals, and he wanted everyone to know about them. There were two framed photographs on the wall, one of Waigel shaking hands with Lee Iacocca and another with Mayor Ed Koch. The Koch one would have done any New York Chinese restaurant proud.

Along one wall was a row of wooden filing cabinets. Two full cabinets were marked 'completed deals'. I tried them. They were locked.

Tommy went outside, and under the pretext of asking for some coffee, came back with a key from Jean. He opened the cabinets.

Inside were rows of files in alphabetical order. I quickly flipped through until I came to T. No Tremont Capital. Damn. I began to look back through some of the other files. I noticed that many of them had titles which were obviously code words.

'What do we do now?' Tommy said.

'There's nothing for it but to go through each file individually,' I said.

'But there are at least a hundred. It will take an hour! We only have twenty minutes.'

'We've got no choice. I'll start at A and you start at Z and work back.'

'Just a moment. Let me see if I recognise any of the code words,' Tommy said.

I was riffling through my second file which turned out to be about the takeover of a beauty-products company code-named 'Adonis', when Tommy whispered, 'Here, I've got it!' He held up a file labelled 'Music Hall'.

'How did you work that one out?' I asked.

'Tremont Capital reminded me of Tremont Avenue in the Bronx. There was a music hall there that used to be very popular.'

'Well done!' I said, and grabbed the file. I hadn't connected the word 'Tremont' with the Bronx. Interesting.

I laid out all the documents in the file on the desk and worked my way through them. There were drafts, and then the final version of the prospectus I had looked through back in London. There was correspondence with the lawyers Van Kreef, Heerlen discussing a number of detailed legal points. One letter dealt with how to ensure that the ownership of Tremont Capital was kept strictly anonymous. Needless to say the owners were not mentioned there.

Then I found a letter with the Harzweiger Bank letterhead. It was from Hans Dietweiler. It confirmed account numbers for the payment of funds raised by Tremont Capital from its bond offering.

Damn. If the money De Jong had paid for the private placement had gone into Switzerland, it would be next to impossible to trace it.

I moved on. Then I found it. It was just a scrap of yellow legal-pad paper. Scrawled on the top was the word 'STRUCTURE'. Below were a series of boxes. It laid out the complete structure of the fraud.

I took a piece of paper from Waigel's desk and copied out the diagram. I was interrupted by a tap on the door. It was Jean. 'You guys had better hurry up. Dick will be back any minute now.'

I hurriedly finished the diagram, carefully reassembled the 'Music Hall' file and placed it back in the filing cabinet. Tommy and I checked the office to make sure everything was as we had found it. My eyes fell on Waigel's desk diary. I quickly checked the week Debbie had been killed. It was filled with appointments, all of which seemed to be in New York. There was no mention of cancelled meetings or flights to London.

'Come on,' said Tommy, and I followed him out of the door. Looking irritated, Tommy stopped at Jean's desk and said, 'Tell Dick we waited for him. Mr Smith has another appointment, and we are already late. Have him call me, please.'

'I can't think what can have happened to him,' said Jean. 'I am very sorry you and Mr Smith had to wait so long. I am sure he will be back in a minute.'

'We can't afford to wait any longer. Goodbye.' With that, Tommy and I marched out of Waigel's department into the corridor. Our act had drawn one or two bored glances from the people working in the outer office. It was enough to be plausible, not enough to be memorable.

We waited for what seemed an age for a lift to come. Finally one arrived. It was crowded with Japanese businessmen, clients of Bloomfield Weiss. They went through a complicated dance to decide which one of them should get out of the lift first. Behind them all, ushering them out, was the short, bald figure of Dick Waigel. I saw him before he saw me.

'Quick, Tommy. Fire exit!' I said.

Without dithering, Tommy darted to the stairway. I couldn't follow him since I was caught up in the melee of Japanese. Waigel saw me.

'Paul, what brings you here?' he asked, his eyes suspicious.

'Oh, I was in the building and I thought I would drop by to follow up on one or two of the comments you made at lunch yesterday,' I said. 'I found them very interesting.'

'Oh good,' said Waigel, staring at me thoughtfully, trying to decide whether I was telling the truth.

The group of Japanese were looking at Waigel expectantly. I coughed nervously and said, 'Well, this doesn't look like a good time for you. If you are going to be at the conference in Phoenix, perhaps we can chat then.'

I knew I wasn't convincing. Waigel's stare hardened. I stared back. Something was wrong. He didn't know what, but it unsettled him. He hesitated for a moment, but his guests were waiting. 'See you then,' he muttered.

I got into the lift, and breathed out loudly as the doors closed behind me. My heart was beating rapidly, and I could hear the blood rushing round my ears. I hoped Jean would be able to bluff her way round the awkward questions Waigel would be bound to ask her. But at least I had the diagram.

I met Tommy in the lobby. He was clearly enjoying his afternoon. 'Wow, that was close!' he said, eyes shining. 'I just caught the gleam of his bald head, so I beat it. Did you speak to him? Did he suspect anything?'

'I don't know,' I said. I shuddered. 'What a nasty little man!'

Tommy laughed. 'One of Bloomfield Weiss's finest.'

'I hope Jean is all right,' I said.

'Don't worry. The worst Waigel can do is fire her, and she wants to quit anyway. So what did we find? Was the mission successful?'

'It was indeed,' I said, patting my pocket. 'I think this diagram will explain a lot.'

'Well, let's get it out and look at it, then.'

'Look, I'm sorry. I don't think I can show it to you.'

'Why the hell not?' Tommy was upset. 'I just risked getting fired for the second time in one week. I have a right to know. Come on, let's get a cup of coffee and you can tell me all about it.'

'I would, but…'

'Yes?'

'I know this may sound corny, but I don't want to put you in danger.'

Tommy took me by the arm and looked me in the eye. 'You're right, it does sound corny. Look, if you really are in danger, maybe I can help you out. It's no good. You've got me hooked on this thing. I can live with the risk. Let's get that cup of coffee.'

'OK, I give in.'

We found a Greek coffee shop, ordered two cups, and I began.

'About a year ago, Bloomfield Weiss sold us twenty million dollars of a private placement for a company called Tremont Capital NV. Tremont was supposed to be guaranteed by Honshu Bank. It turns out that this guarantee never existed. Neither Honshu Bank, nor Bloomfield Weiss have any record of it. The only security we have for our investment is an offshore shell company.'

'That's bad,' said Tommy.

'What's worse is that two of the three people who have discovered this are now dead.'

'Wow,' Tommy whistled. 'Was one of them Greg Shoffman?'

'Yes,' I replied. 'The other was a woman called Debbie Chater who worked for us in London.'

'Do you know who did it?' Tommy asked.

'No. Debbie fell into the River Thames. I think she was helped. Who by, I just don't know. But I'm going to find out.'

'So who is behind Tremont Capital?' Tommy asked.

'I can guess,' I said.

'Who sold the deal to you?' Tommy asked.

'Cash Callaghan.'

'And Dick Waigel structured it?'

'Dead right,' I said.

'Jeezus,' Tommy said as he leaned back in his chair. 'Well, I am not surprised by that snake Waigel. But Cash? I can imagine Cash bending the rules, but I wouldn't have thought he would go that far. What scum!'

Tommy gulped his coffee, trying to take it all in. 'So Shoffman and your Debbie Chater are dead? Who's the third person?' Tommy paused, and whistled again. 'That's you. Man, you had better watch yourself.'

'I know,' I said. 'And you can see why I was reluctant to make you the fourth.'

Tommy laughed, 'Don't worry about that. They don't know I know. I'll be all right. So what happened to the money?' he asked.

'I don't know,' I said. 'That's why I wanted to take a look at Waigel's files. Let's have a look at that diagram.'

I pulled it out of my pocket and spread it out on the table of the coffee shop.

It consisted of a series of boxes, one underneath the other. Connecting them were arrows, all pointing downwards. They showed the direction of the flow of funds in the transaction.

The first box was labelled '2 investors'. That was presumably De Jong & Co., and Harzweiger Bank.

An arrow with $40 million written by it, pointed down to the next box, labelled 'SPV. That must stand for 'Special Purpose Vehicle', which was Tremont Capital. This represented the $40 million raised by Tremont from the private placement.

The next box down was labelled 'Swiss bank a/c'. That would be the account referred to in Dietweiler's letter.

Next came a more puzzling box-'Uncle Sam's Money Machine'. I had no idea what that could be. Below this were a series of boxes marked 'high return investments'. By the arrows were the numbers '$150 to $200 mm'. I could see the power of 'Uncle Sam's Money Machine'. Forty million dollars went into it and $150 to $200 million came out of it. A money machine indeed.

Underneath the diagram were some notes explaining things a bit further.

'Yrs 8-10 sell investments. Sell or break money machine. Take the profits out of SPV in dividends. Estimated dividends $50 million. Bond repaid if possible.'

'What do you make of that?' Tommy asked.

I thought for a minute or so. 'Well, I don't know what "Uncle Sam's Money Machine" is, but I think I understand most of the rest.

'The forty million dollars raised by Tremont Capital from the private placement is placed in a Swiss bank account. From there it is used to purchase, or perhaps build, the mysterious money machine. There the money is somehow turned into two hundred million dollars. This money is put into high return investments. After eight years or so, these are sold. The proceeds, which by that time are presumably quite large, flow back to Tremont Capital. The forty million dollars is then repaid. Any profits from the investments, over and above the interest costs on the private placement, are paid out by Tremont Capital in dividends. Waigel estimates these to be fifty million dollars. So, Waigel and his accomplices borrow forty million dollars, use this money to generate a further fifty million dollars in profits for themselves and then give the original forty million dollars back, with nobody any the wiser.'

'Why do they do that?' asked Tommy. 'Why don't they just keep the forty million dollars?'

'That's the clever bit. By giving the money back, no one will know that a crime was committed. They can carry on living normal lives, and perhaps try the same trick again, forty million dollars richer. If they were to get greedy and not repay the forty million dollars they had borrowed, then an investigation would be started, and they would run the risk of getting caught.'

'They raised twenty million dollars from De Jong. Where did they get the other twenty million dollars from?' Tommy asked.

'From Harzweiger Bank in Zurich,' I said. 'I spoke to a Herr Dietweiler there, who pretended they had never bought the deal. He must have got some kickback for getting involved. That must be why they use accounts at Harzweiger Bank, where Herr Dietweiler can keep his eye on the funds.'

'OK. So how do they manage to make all this money out of borrowing forty million dollars. What is this "Uncle Sam's Money Machine"?'

I shook my head. 'I don't know. It seems to be the key to the whole thing. I don't know what the hell it is.'

'Perhaps it's a government agency?' suggested Tommy.

'Maybe,' I said. 'But I don't see how anyone ever got rich by giving money to a government agency.'

'Uncle Sam could refer to the army,' said Tommy. 'A lot of people make money out of that. Defence contractors and such like.'

'Could be,' I said. We discussed the possibilities for several minutes without coming to a satisfactory conclusion.

'So – how can I help?' Tommy asked.

'Are you sure you want to?' I said. 'You know what happened to Debbie Chater and Greg Shoffman.'

'Hey, I don't have a job, and I need something to do. This beats selling bonds. And the more I stir up that sticks to Bloomfield Weiss, the better.'

'Well you could try to find out a bit more about Greg Shoffman,' I said. I told him about my attempts to discover more about his disappearance. 'I would like to know who killed him. Just as important, I would love to know what he found out before he died. He may have turned up some useful evidence against Cash and Waigel. I would do all this myself, but I won't be in New York for very long. If you come across anything, call me at the conference in Phoenix.'

Tommy said he would do his best, we paid for the coffee, and we left.

I liked Tommy. For a moment I was concerned that I had needlessly put him in danger by telling him what I knew. No, that was silly. I knew more than Tommy. And I wasn't in any visible danger.

I got back to my hotel room, hot and sweaty. The red light on the phone was on. I left it there and jumped straight into the shower, letting the cool water lower my blood temperature. Feeling much better, I went to the phone and rang the message desk. Hamilton was coming into New York the next day. He wanted to meet me for lunch at a fashionable Italian restaurant on the Upper East Side. It would be good to see him. Everything was jumbled in my mind. Talking it through with him, I knew it would all fall into place.

The next day was my last in New York before flying to Phoenix. I was scheduled to see a couple of investment banks in the morning. At one of them a persistent little man called Kettering insisted on lecturing me on the opportunities in South American debt, even though I had no interest. He regaled me with a mixture of scolding and abuse. He succeeded in making me feel stupid for not agreeing with him about the financial wonders of that continent, but also irritated the hell out of me.

Tired and battered by the morning's hard sell, I decided to walk from the investment bank's offices up to the restaurant. I needed the air, even though it was only New York's hot atmosphere, which managed to be both dusty and clammy at the same time. I sauntered diagonally through side streets and up the main avenues, slowing myself down, just looking.

I walked along a deserted side street, high buildings on either side. Thin eerie music echoed off the walls of the canyon. A group of short square men, wearing what looked like shawls and bowler-hats, clustered round some rugs, acoustic equipment and a set of primitive drums. They had dark, wind-beaten skin and high, hardened cheekbones. There was just me and them alone on the street. I stopped to listen. The music had a magical quality to it, evoking sheer mountainsides, swooping birds of prey, the age-old loneliness of the Andean altiplano. I don't know how long I stood there, bewitched by the music. Eventually they paused, and only then acknowledged my presence, smiling shyly. I bought one of the tapes they had laid out on the sidewalk. The cover was a picture of the group looking very serious, with the caption 'Las Incas'. I walked on, the music still swirling and swooping inside my head. Within a minute I was back in the blaring bustle of Third Avenue.

The restaurant was light and airy. Skylight and metal tables suggested an informal garden trattoria in Italy. The other diners' sober suits or chic dresses confirmed what it really was: an expensive New York restaurant currently enjoying its brief turn as the place to be.

I saw Hamilton lost in a sheaf of papers. He looked quite out of place amongst the other tables of smart diners. As I drew up a chair, he glanced at his watch and frowned slightly. I looked at my own and saw it was 12.33 p.m. Three minutes late. Who but Hamilton would care?

Stuffing his papers into his briefcase, he asked 'How are you finding New York?'

'Oh, I like it,' I said. 'It's so,' I paused, 'unexpected.' I told him about the Peruvian band I had encountered on my way.

Hamilton looked at me, slightly puzzled. 'Yes, I see,' he said. And then, with an edge to his voice. 'You have seen some investment banks, haven't you?'

As usual with Hamilton I felt slightly foolish. Of course Hamilton was not interested in my thoughts on New York as a city, he wanted to know what was going on on Wall Street.

I told him the highlights of what I had heard. He questioned me closely about one or two conversations I had had which I had thought were completely unimportant. He probed me with questions which I realised I should have asked and hadn't, digging to discover who was buying what. My self-confidence began to wane as I realised that by Hamilton's standards I had done a superficial job of finding out what was really going on.

The waiter had been hovering throughout this interrogation, nervous of interrupting Hamilton. Finally he saw his chance and, after forcing a hurried glance at the menu, coaxed an order from each of us. Hamilton stuck with a Caesar salad, which seemed a bit Spartan to me, given the exotic attractions of the menu. Reluctantly, I gave up the starter, and after a swift glance, asked for a complicated-looking meat dish. Hamilton ordered a large bottle of mineral water. I looked enviously at the next table, where a couple were enjoying a long, relaxed meal and were already on to their second bottle of Montrachet. Why come to a restaurant like this and gallop through a lettuce and a glass or two of water? Oh well.

'How have your other investigations gone?' Hamilton asked.

I told him everything I had found out: how Waigel had been evasive about his involvement in the original deal, about Shoffman and his disappearance, and about the diagram I had found in Waigel's office.

Hamilton listened carefully to every word. When I had finished I looked to him for a response. He was silent for what seemed an age, gently stroking his beard. Then he smiled. 'Good work, Paul. Very interesting. Very interesting indeed.'

After my poor showing earlier in the conversation, I was pleased. 'So what do you think Uncle Sam's Money Machine might be?' I asked.

'What do you think?'

I had thought about this hard over the last twenty-four hours, but had not come up with anything. 'A government defence agency? Some sort of computer? Some kind of government bond fraud?' I guessed wildly, looking to Hamilton for a reaction. He didn't seem too impressed with these ideas.

I shrugged. 'I don't know. What do you think?'

Hamilton paused. 'We have no way of knowing. We don't have enough to go on yet, but it's a start. Well done.' He took a peck at his salad. 'I think you are right, though. Finding out what this thing is, is the key to getting our money back.'

'How did you get on in the Netherlands Antilles?' I asked.

'It was a bit difficult, since I didn't want to tip off Van Kreef, Heerlen that we are suspicious. Rudy Geer was very helpful. My cover was that the recent tax reforms had caused us to look at the possibility of asking for a change in domicile for Tremont Capital. As part of the process, Geer had to check all the documentation.'

'Did he find anything?'

'It's interesting. Van Kreef, Heerlen claim that they did see the Honshu Bank guarantee. When Geer asked them to produce it, they said they couldn't find it in their files. This is of course a terrible thing for any firm of lawyers to admit, so Geer suspects it must be true.'

'What do you make of that?' I asked.

'I don't know. I suppose the most likely thing was that the guarantee was a fraud that was somehow removed from Van Kreef, Heerlen's files. Perhaps by one of their own lawyers who is on the take. It is going to be difficult to kick up too much of a fuss without causing our concerns to get back to whoever owns Tremont Capital.'

'Very interesting,' I said. 'Anything else?'

'Well, it looks as though we will get a court order forcing Tremont Capital's auditors to show us a copy of their accounts. Hopefully that will give us some clue as to where the money has gone. The court order won't be granted until early next week, and they will have a couple of weeks to comply. There's not much I can do until I hear back from Geer, and actually get my hands on those accounts.'

'So, what now?' I asked. 'Do you think we have enough to go to the police?'

Hamilton leaned forward, his blue eyes boring straight into mine. 'We have to get that money back,' he said. His voice was calm, his tone level but there was an edge of absolute determination to it. 'You remember I told you about that lead I had in Tokyo? Well, I think we really might get it. And they are talking five hundred million dollars. That could transform De Jong.' He sipped his mineral water, never taking his eyes from mine. 'If they hear we have lost twenty million dollars in a fraud, our credibility will be blown, and no one will give us their money to manage. Even if it wasn't our fault.'

It was our fault, I thought. Or at least Hamilton's. He had been sloppy in checking the documentation. A rare mistake on his part, but I was not about to try to get him to admit to it.

'But if we go to the authorities, won't they help us find the money?'

Hamilton shook his head. 'The police's top priority is to catch the criminal, not find the loot. That's why most cases of fraud in the City never get to the police or the public. If you can sort it out yourself, you have a much better chance of coming out whole.' There was a slight smile on his lips, mocking my naivety.

'All right,' I said, not really feeling all right about it at all, 'So what do we do next?'

'Well, you've done a good job so far. Keep plugging away, asking questions. There will be a lot of people from Bloomfield Weiss at the conference in Arizona. See what you can find out there. In particular, see if you can find out anything about this "Money Machine". I'll do what I can in London, and wait to hear from Curacao.'

Hamilton saw the concerned look on my face. 'Don't worry, we'll find the money.'

Hamilton brushed away the dessert trolley, dripping with temptation, and paid the bill. We went our different ways, with me taking a taxi downtown to Harrison Brothers.

The afternoon dragged. I was tired and edgy, and found it difficult to concentrate. I was nervous about going along with Hamilton. I felt out of my depth, and although I would normally trust Hamilton to do anything, I had nagging doubts that he was out of his depth too.

Finally five o'clock came, and I could respectably leave. I was due to meet one of Harrison's government bond salesmen at eight o'clock for dinner. That was three hours away, so I decided to head back to the Westbury. I walked to the Fulton subway station and boarded the Lexington Line Express heading north. I changed at Grand Central to get the Local.

It was rush hour and the train was crowded. New York in early September is still very hot and very humid. The train was one of the few on the subway system which had no air-conditioning. I felt the sweat run down my body, soaking my shirt and even my trousers. My tie looked as though it would curl up in the heat.

The train stopped for an age. Passengers were crammed together. Tempers were short. People were muttering under their breath, cursing the goddamn subway system. Even in these conditions, everyone was following the golden rule of the New York subway-never, ever catch another person's eye. He might be a cokehead, a rapist, a serial murderer, a Jehovah's Witness.

I stared at the advertisements. There was poor Walter Henson, an architect famous throughout New York City for his haemorrhoid complaint. There, too, were big, black, ugly cockroaches crawling into a Roach Motel with the caption 'Las Cucarachas entran pera no pueden salir'.

The train lurched forward. My gaze wandered along the carriage. It stopped with a jolt.

There, at the end of the carriage, was Joe. He was staring at me, expressionless. Although I was looking straight at him, he gave no sign of recognition. I tried to regain my composure, but I was sure he must have seen the alarm that I felt when I spotted him.

I tore my eyes away from him and looked the other way. Since catching sight of Joe in Bloomfield Weiss's dining room, we had avoided each other, much to my relief. But now he was right here, in the same subway carriage as me. It must be a coincidence, mustn't it? It had to be.

I tried to ease myself down to the other end of the carriage. I was flustered, and I trod on the toe of a mild-looking man in a business suit reading the Wall Street Journal. I put all my weight on it.

'What the fuck are you doing, you dumb fucker?' he screamed at me. 'Get the fuck off my fucking toe or I will smash your fucking face in!'

I glanced at the swearing man without really focusing on him. I pushed passed him.

'Jerk,' he muttered to me and to everyone standing round us.

I was glad of the attention. It would be impossible for Joe to do anything to me on a crowded subway train, and when we got to Sixty-Eighth Street, there ought to be plenty of people around.

I was right. A stream of office workers spilled out of the subway entrance on their way home. I latched on to a group of noisy young bankers who were heading in the same direction as my hotel. Looking over my shoulder, I could see Joe following a block behind.

I peeled off from the bankers on Park Avenue and walked the block to the Westbury as fast as I could. I paused by the awning in front of the hotel, and could make out the figure of Joe standing on a street corner, still a block away.

I told the man at reception to make sure I was not disturbed by anyone. He looked at me a little strangely but promised me he would do as he was asked. I went up to my room, turned all the locks and bolts on my door, and flopped on to my bed.

If Joe was following me, it could only be because he wanted to get even with me. Perhaps the police had been round to his house again. Or perhaps, despite my caution, I had stirred something up with my questions about Greg Shoffman and Tremont Capital. But why should that bother him? Maybe he was just brooding over the fact that my little finger was still intact.

I paced up and down the small bedroom, worrying about Joe. After ten minutes or so, I became less agitated. It must have been a coincidence that Joe had got on the same subway train as me. He had probably followed me just because he was curious; perhaps he thought it would be fun to scare me. Well, he had succeeded.

I debated whether to call off my dinner. I decided I should be safe if I took a taxi to and from the restaurant. There was nothing Joe could do in broad daylight right outside the hotel. So at half past seven, having showered and put on a new shirt, I made my way down to the lobby.

There was a group of people clustered round the entrance, waiting for taxis. The doorman was in the middle of the street blowing his whistle full-blast. But there were no empty taxis to be seen. It was still light, although the sun was glowing red, low over Central Park. I looked up and down the street. No sign of Joe. He definitely wasn't in the lobby either.

After ten minutes the doorman had only nabbed one taxi and there were still two people in front of me. Joe wasn't anywhere to be seen. I decided to walk over to Fifth Avenue and try my luck for a taxi there.

I had almost reached the avenue when I heard soft footsteps right behind me. I felt a sharp prick through the fabric of my suit. I shot up straight, arching my back, and turned my head slowly.

It was Joe, dressed like a jogger in a dark track suit. And he was fondling his favourite instrument. A knife.