Scott Turow - The Burden of Proof

The contents of the subpoena were in most regards predictable. Listed first were approximately two dozen dates; the government wanted every ticket written on the central order desk those days. By asking for records of all of MD's business on each date, the government was continuing its effort to obscure its interests by not focusing on individual transactions. But amid this volume of papers would be the tickets John had written at Dixon's instruction for the orders that had ended up booked to the error account. Once again, the informant was right on the mark.

In the sUbpoena's second paragraph, the grand jury requested all MD's canceled checks for amounts over $250 written in the first four months of the year. This, Stern took it, was a continuing step in the govemment's efforts to trace into Dixon's hands the illegal profits made trading ahead. It was also an encouraging sign; apparently, as Dixon predicted, the subpoena to his bank had been unavailing. Stern had spent an evening or two examining copies of the records the bank had produced and could see nothing nore noteworthy than the occasional six-figure personal checks for investments and purchases that were part of Dixon's millionaire life-style. Certainly, there were no large deposits from unexplained sources.

"What is this last item?" Stern asked Margy, as he got back on the line.

His pulse had retreated to normal. He read: "'All account opening documents, purchase and sale records, confirmations and monthly statements for account 06894412, the Wunderkind Account." Do we know what that might be?"

"I been lookin at that," said Margy.

"And?"

"And he's a clever old dog. You got the error-account statements I gave you?"

Stern put her on hold a moment while Claudia pulled the file..

"Look at Jan 24," she instructed. "You see where the error account's got a buy and a sell of fifty thousand bushels of oats?"

He saw it. Dixon someone, to indulge the formal presumptions-had bracketed these orders around a surge in oat prices caused when Chicago Ovens bought more than two million bushels that day in Chicago.

"Trades make a profit of about forty-s'rx thousand, right?"

He was in no position to follow, let alone challenge her arithmetic. He simply agreed.

"Now look at the next day. You see where there's a buy of two April 90 silver contacts in thet Dixon's instruction for the orders that had ended up booked to the error account. Once again, the informant was right on the mark.

In the sUbpoena's second paragraph, the grand jury requested all MD's canceled checks for amounts over $250 written in the first four months of the year. This, Stern took it, was a continuing step in the govemment's efforts to trace into Dixon's hands the illegal profits made trading ahead. It was also an encouraging sign; apparently, as Dixon predicted, the subpoena to his bank had been unavailing. Stern had spent an evening or two examining copies of the records the bank had produced and could see nothing nore noteworthy than the occasional six-figure personal checks for investments and purchases that were part of Dixon's millionaire life-style. Certainly, there were no large deposits from unexplained sources.

"What is this last item?" Stern asked Margy, as he got back on the line.

His pulse had retreated to normal. He read: "'All account opening documents, purchase and sale records, confirmations and monthly statements for account 06894412, the Wunderkind Account." Do we know what that might be?"

"I been lookin at that," said Margy.

"And?"

"And he's a clever old dog. You got the error-account statements I gave you?"

Stern put her on hold a moment while Claudia pulled the file..

"Look at Jan 24," she instructed. "You see where the error account's got a buy and a sell of fifty thousand bushels of oats?"

He saw it. Dixon someone, to indulge the formal presumptions-had bracketed these orders around a surge in oat prices caused when Chicago Ovens bought more than two million bushels that day in Chicago.

"Trades make a profit of about forty-s'rx thousand, right?"

He was in no position to follow, let alone challenge her arithmetic. He simply agreed.

"Now look at the next day. You see where there's a buy of two April 90 silver contacts in the error account?"

"Yes." According to the posting notes in the error account statement, this trade, like the oat transactions the day before, had been made under an account number of which MD had no record. Therefore, all the trades had been set over in the error account.

"Now guess what the cash value of the silver is? Surprise you that it's a little under forty-seven thousand?"

Everything was a surprise at this point, but Stern, recognizing his role, merely said "No."

"Now look down the error account statement," she said. "See the two silver contracts again?"

"'Journal transfer to A/C 06894412." "Stern read the note from the statement, then looked again at the subpoena. This was the number of the Wunderkind account. As usual, he did not understand.

"See, he used the profit he made in oats on the twentyfourth to buy silver on the twenty-fifth. The cost of the silver gets debited to the error account, and after it's paid for, he makes accounting entries and journals the silver into this other account, Wunderkind. See? He's turned the profit into silver and he's got it in his hot little hand."

"And does anything similar happen on other occasions?"

"Far as I can see, it's every doggone time. Makes some money tradin ahead, then he throws on an error position to absorb the profit and shifts it over to the same account."

"Wunderkind?"

"You betchum."

Stern explained it to himself to be sure he understood: it was a complicated device to move the profits made by trading ahead out of the error account. Once the profit was in hand, he would buy new contracts, making some mistake that would also put the new trade in the error account; after the error account paid for the new position, it was transferred to the account of Wunderkindmwhatever or whoever he was.

This was why Dixon had given him that sly look on the golf course.

"And what happens to all the positions which this Wunder account holds?"

"Dunno, cause I ain't got the records yet. He probably closed them right out and put the money in his pocket."

"And Wunderkind denotes what?"

"Beats me. Maybe it's the name on the account. Only thing is, I can see from the number it's a corporate account."

Stern nodded. So this race was heading into its home stretch. If the government could show that Dixon controlled this Wunderkind account, they would have the link they needed to blame all this on him. But from his expression on the golf course, it was probably a fair bet that Dixon had some final feint in store, another clever dodge to keep the feds from tracing these dirty dollars to him. A corporate account, Margy said. Perhaps the corporation's stock was held in trust, and the trust was controlled and funded from offshore. In the course of the IRS investigation a few years ago, Stern had seen Dixon utilize ploys like this, cagey maneuvers that would have done the CIA proud. It was John who remained the principal concern-what would he say to the government?

If he stonewalled them or went haivesies with the truth, Klonsky and Sennett would threaten to prosecute John-and mean it. Stern shook his head again over the delicacy of his son-in-law's situation.

Stern asked Margy to be sure she had the records pulled together by the Monday before her appearance.

"Shore. I'll just work all weekend. What else is new? Think maybe I'll get in there Sunday night," said Margy in a leisurely way. "Stay over by the Gresham."

"Ah, yes," said Stern. "I See Claudia waving. It must be most urgent.

Many thanks," he told Margy,."many thanks," and put down the phone, feeling queasy and grateful and free.