Clair tilted her head. “He had to see that coming, right? Rundown shitholes or not, Planning and Development has been preserving pockets like that all around the city. I imagine a savvy real estate developer pads his budget and timeline to deal with those groups.”
Hosman tapped at one of his spreadsheets. “You’re right; he put twenty million aside in an escrow account specifically to fight these guys. Not only did he see it coming, his attorneys were waiting at the courthouse the day the injunction was filed with a claim of their own.”
“He planned to sue Planning and Development?” Nash asked.
Hosman grinned. “Better than that. He filed a suit against the city. His attorneys claimed the speakeasies were built without permits, and not only was it illegal to preserve them, the city was obligated to either bring them up to code or tear them down.”
Clair whistled. “Wow. How did that fly down at city hall?”
“Well, they weren’t pleased, and the county filed a counterstrike. The next day they halted construction on two skyscrapers he had going up downtown. One office building, the other residential. Apparently a whistleblower came forward and claimed his company was using substandard concrete. When they tested the mix, it turned out to be true. Too much sand or something. I’m still trying to get the details. The office building is forty-three stories and is estimated to cost six hundred eighty-eight million dollars, and the residential tower is sixty-four floors with a price tag hovering around one billion.”
“So what does that mean? He’s got to demo and start over?” Nash asked.
Clair was studying a picture Hosman had printed of the office building. “Do you think the city knew about the bad concrete all along and only brought the infraction up to retaliate?”
Hosman raised both his hands. “Dunno on both counts.”
“We saw houses at the Moorings, so they must have worked out some kind of resolution, right?” Nash pointed out. “I mean, the buildings are gone, replaced with plush single-family homes, so somebody blinked.”
Hosman was pointing at another spreadsheet. “Well, that’s the mystery of the hour. I found nearly four million dollars leaving his accounts last May, and I’ve had zero luck tracking the recipient. Shortly after, though, construction started back up at the Moorings, and the city allowed him to move forward with the two skyscrapers by approving a very costly reinforcement retrofit.”
“So he bribed a city official?”
“That would be my guess. The lawsuits were dropped all around too.”
Nash frowned. “I’m not a financial analyst, but none of this sounds like a Ponzi scheme to me. Sounds more like a rich guy using his riches to get richer.”
“Not exactly getting richer,” Hosman replied, shuffling through various stacks of paper. When he found the sheet he wanted, he handed it to Nash.
Nash took a quick glance and handed it back to him. “Not a financial analyst, remember?”
Hosman rolled his eyes. “Talbot has sixteen large-scale projects going on right now, everything from residential construction to retail, to condos and luxury office space. All of them are months away from completion, and they’re bleeding money—the towers with the structural problems in particular. As soon as his backers got wind of the problem, they started pulling out. He’s paid back more than three hundred million in the past month. He owes another hundred eighty million in the next two weeks, and from what I can tell, he doesn’t have it. It appears he’s been using the money coming in from new investors to pay out the old while attempting to float loans to cover the construction.”
“Okay, so Ponzi scheme,” Nash said.
“No, that’s not a Ponzi scheme,” Hosman replied.
“Then what is a—?”
Clair placed her hand over Nash’s mouth. “In order for this to be a Ponzi scheme, he’d have to solicit funds for a bogus project and use the proceeds to pay off the investors of the other projects.”
“That brings us back to the Moorings.” Hosman produced a copy of the brochure found on the body of Gunther Herbert, Talbot’s CFO. “This place is a sham.”
“But he’s building out there,” Nash pointed out.
“You saw houses in phase one, six in total, none of which have sold yet. The real problem is in phase two. He’s been selling lots, future homes, even stakes in an upscale golf and country club with an estimated completion date of fall of next year. I called Terry Henshaw at FBI White-Collar, and he said they’ve been monitoring Talbot for a few months now. He’s been routing the money from phase two through a series of sub accounts overseas, then bringing it back in under the Talbot Enterprises umbrella in order to pay back investors from the other projects.”
Clair was shaking her finger. “That’s still not a Ponzi scheme. It may be unethical, but if his corporation owns all these projects and they’re legit, he probably covered his ass with some fine print in the paperwork.”
Hosman spun his chair in a slow circle, a grin playing at his lips. “You’d be right, but I found one other thing.”
“What?”
“The land where they plan to build phase two, he doesn’t own it. He’s selling a development on somebody else’s land.”
“If he doesn’t own it, then who does?”
A grin spread across Hosman’s face, and his eyes darted back and forth between the two detectives. “Wait for it . . .”
Nash’s face grew red. “Spit it out, math boy.”
“Emory Connors.” Hosman slapped his hand on the desk. “Her mother left it to her in her will. That little girl is worth some serious coin. Since she owns the land, not Talbot, we’ve got something worse than a Ponzi scheme. There’s more, look at this.” He pointed to a highlighted paragraph in a legal document.
Nash read it and whistled. “Think the captain will let us bring him in now?”
47
Diary
The steps creaked as I descended with Mother’s large salad bowl in one hand and a glass of water in the other. Mother had watched me intently as I went about the business of collecting these items; at one point she even mouthed the words “Don’t let him do it.” Of course, I paid her no mind because I didn’t “let” Father do anything and I wasn’t about to ruin his good mood by passing on such a message from Mother. He had asked me to bring the bowl, and I knew Mrs. Carter hadn’t drunk anything in hours. I imagined she must be parched, so I brought water too. If Mother took pause at anything that was about to happen, she was perfectly capable of communicating her position. Father was already downstairs, kneeling next to the cot. As I drew closer, I realized he was tying Mrs. Carter’s feet to the frame with a length of three-strand nylon rope. He had already secured her free hand. She yanked at the bindings to no avail. Father knew how to tie a strong knot.
A rag was stuffed in her mouth, held in place by a gag made from a piece of Mr. Carter’s shirt. Little crimson specks were caught up in the cloth.
Father tugged at the last knot and patted Mrs. Carter’s leg. “Snug as a bug.” He turned to me, his eyes shining like a child’s at Christmas. “Do you have your knife on you?”