Stained River (3 page)

The title “class prankster” fit him perfectly, but he was also one of its smartest members and best athletes. His father owned the local hardware and feed store where he worked after school and on Saturdays. Someday it would be his
. But by his junior year, he knew he wanted more.

Two things intrigued him
- girls and money.   Both became a problem during his senior year, but his girl liked nice things. Her expensive tastes went beyond the bounds of his earning power. As class treasurer, his responsibilities included the safekeeping of funds saved for their senior trip. The plan was for a weekend in Indianapolis, complete with hotel, show and football game. The fund reached $900 when he decided to try his hand at investing. What was the harm? The “loan” would be repaid with interest on
guaranteed
profit.

He opened an account with a stockbroker in the next town, and with money borrowed from the fund, bought a hundred shares of a stock that was supposed to double in a month. Three months later, the stock tanked and the company ultimately filed for bankruptcy. He kept the whole thing secret until payments for the class trip could no longer be avoided. Connery’s father agreed to make restitution to avoid his son’s prosecution and keep his record clean. Word around town got out quickly but despite the embarrassment, it fueled his desire to learn more about finance and the intricacies of markets.

He needed a college education, preferably Ivy League, to achieve his dreams. But there were obstacles he had to overcome.

“You’re askin’ for somethin’
we can’t do, Terry. I know you got your mind set- don’t see a way around it; at least for a while.  Maybe that small college over in Dayton we looked at.”

The pained expression on his father’s face said it all. Connery didn’t pursue it out of respect. Instead, he wrote his congressional representative requesting an appointment to the Air Force Academy.
A long shot for sure, but he had grades well above average along with stellar performance in varsity football and baseball. Moreover, he had helped organize and publish the first school newspaper.

The letter was timely since t
he congressman happened to be losing votes in that particular part of his district. He thought selecting a kid from there made good political sense. Local papers ate those things up, he reasoned. Connery received his official acceptance with elation. His long shot had paid off, securing him a free education at a prestigious military academy and a chance to escape the dull confines of his hometown.

With his degree and military service behind him, he
began a meteoric rise in the world of finance and investing. His knack for calculated risk taking, along with a sense for picking the right stocks, could often double or triple an investment. It wasn’t long before word of his success got to the right people. Few could match what he achieved in such a brief time. In a seamless transition, he rose from ham and cheese to caviar and Dom Perignon, complete with mansions, yachts, and nannies, all by the time he was thirty two. He moved with ease in an elite crowd that sought his presence at their most elegant gatherings. Initially, some of the more prestigious in his circle wondered if he wasn't one of those '
big hat, no cattle
’ guys who dazzled for a while then faded in the stretch. In truth, most couldn't match his balance sheet, even then.

Five years later
, it all went wrong. That's when Pam finally served him with divorce papers. He should have seen it coming. They had met toward the end of his sophomore year at the academy and married soon after graduation. The couple left church that day under a canopy of drawn swords and all the other accoutrements and hoopla accorded a newly commissioned officer. His career in the service was unspectacular, although he finished with the rank of captain. After military, they moved to New York where he launched a career that would turn him into a very rich man.

Their first years together were great; two kids, a marriage that seemed stable, a somewhat normal family life. Pam was beautiful, a near perfect wife who supported him in anything he wanted to do. He should have been content with the way things were but eventually began
messing around with another woman, the first of many attracted to his good looks and lots of money. It wasn't long before he spent more time in their bed rooms than his own. Ego had taken command. He covered his tracks carefully, always with a ready alibi. Pam didn't catch on right away, accepting his excuses for late nights and lengthy stays away from home. When she finally discovered the truth, none of his bogus explanations and attempt to gloss things over, worked. In an explosive scene one night, she ripped his shirt and clawed at his face, leaving deep scratches he had to explain for days after.

“How could you? You bastard…!”

Their marriage never really recovered.
They stayed together but the relationship grew even more strained. It was but a matter of time before it ended.

That same year
, his business became successful beyond all belief. He was on a fast track to making a fortune, and wealthy clients, anxious for the steady returns his funds produced, almost begged him to take their money. To mention that you were with Hawthorne Capital became a sort of status symbol. Accounts weren’t opened with less than a million dollars. Investments under his management increased to a billion and climbed rapidly toward four billion and beyond. Money flowed, far beyond his dreams, and along with it prestige, public appearances, and meetings with people of influence. His picture appeared on the cover of several business magazines, and guest slots on CNBC followed. Everyone wanted to know what Connery thought. Where would the Dow be at year end?  What sectors looked good? Would the Fed increase rates?  At the top of his game: power, money, fame, and just over forty- one.

He moved a reluctant Pam and kids to a
ten thousand square foot mansion in Boca Raton, spending as little time there as possible, since he kept an apartment in New York. Shortly after buying the mansion he bought another, a palatial vacation home on the southern coast of Spain near Malaga, followed by the purchase of a hundred foot yacht he kept moored at West Palm Beach; a spending orgy designed to flaunt his success. But fabulous wealth didn’t come without a price. Adding to the pressures of a failing marriage, well- heeled clients expected him to make money on their investments, no matter which direction the market turned. That's why they placed substantial amounts with his firm, Hawthorne Capital Management. If he didn't perform, they wouldn't hesitate to move it elsewhere.

For the next few years, success was non- stop; until a surprise arrived in the mail one morning.
A weighty package from the Securities and Exchange Commission was ominous. The request for endless information included lists of new accounts, terminated accounts, cross transactions, stock purchases, stock sales, trade dates, and much more. They had a month to assemble it before a formal audit began.

Dumbfounded, in a fit of anger, Connery called an emergency meeting of his top officers including Dan Hewett, his second in command. The door to the
conference room had hardly closed when he dropped the heavy package on the table.

“In case some of you haven’t heard, we’re about to get audited by the SEC!  This didn’t arrive out of the blue. Somebody had to know about it. Why wasn’t I called? They have phones in Spain last I checked!”

He turned and pointed toward Hewett.

“I hold you responsible
! You’ve known about this. Why didn’t you call? I’ll tell you why! You and Walters here! You’ve had your heads up your asses! What am I paying you for?  The SEC thinks they have something big here. They want to know if the money in our client’s accounts actually exists! What the hell do they think we’re doing with it? This is a surprise, and you know I hate surprises! Do you have any clue about what’s going on?”

He slammed his fist on the table. The more he talked, the louder he shouted. Hewett listened to the tirade and then had an opportunity to respond. He answered calmly.

“We do have a problem, and it’s been going on for several months. I tried to tell you, but you weren’t listening. Remember? You were in Spain for three weeks. That’s when we found out for sure. I made the decision not to inform you until you returned, mostly because I didn’t have any good answers. I still don’t. Walters and I thought we could get it straightened out. Then the package arrived just before you returned. Right now, the problem looks to be software related, but I can’t say for sure. There’s been significant data loss. I need time.”

The meeting turned more explosive when Connery learned they needed at least fifty million just to get by
the next quarter, thus it became urgent for him to be at the meeting in Brasilia. It would be up to him to convince three men to invest in Hawthorne. At least one, maybe two, had other business commitments. They would cancel if there were any delays. The deal maker was a powerful businessman operating out of Brasilia with corporate connections in Venezuela. Connery read his business card.

Estevo Castelo Branco

Companhia do Azevedo, Limitada

1800 Playa Mendoza

Brasilia, Brazil

No other information, except for a telephone number written on the back; no indication of the man's title or the business of his company.

Their initial meeting began with a call to Connery’s offices. Cindy, his secretary, answered, thought it important enough to ring his office. She possessed a sixth sense about things that could be of importance, and he trusted her completely.

“I have this call on hold. I think you should take it.”

He remembered the conversation moving quickly. An accented voice spoke with authority.

“Mr. Connery, you don’t know me. My name is Estevo Castelo Branco. I’m a chief shareholder in Azevedo Limited. I’m considering a major investment in your company. In addition, I have other business arrangements you may find of interest. I’m in your city for only a short while. Would you be available at ten tomorrow morning? I apologize for the short notice.”

Connery hesitated. This was unusual. Most clients accommodated his schedule, not the other way around. At least that’s the way it seemed before things got screwed up. Unless extraordinary potential existed, not many were able to meet with him on short notice. This, however, could be exactly what he needed.

“Could you hold while I check my calendar for tomorrow?”

“Certainly.”

A quick glance showed him completely open the following morning, but after delaying a few minutes, he picked up the phone.

“I have a previous commitment at ten, but I can push it off until afternoon. I look forward to seeing you then.”

He hung up, then opened his laptop. An Internet search
of the company showed an impressive website; an apparently large corporation involved in mining and resource development. Included were pictures of the corporate headquarters in downtown Brasilia and the names of other locations in various countries. He clicked on the list of names for the board of directors. Castelo Branco's name appeared as chairman emeritus. A further search  for the former chairman’s credentials turned up nothing to give him pause; his attendance at various social functions, large donations to the arts and various endowments. His company was mentioned by a global environmental organization as possibly being in violation of existing laws. It seemed a routine protest faced by many large companies in that industry. He disregarded it with no further follow up, a mistake that would cost him dearly.

The next morning, Cindy rang his office promptly at ten saying his client had arrived. He asked her to show
him in. His office on the eighteenth floor was striking, designed specifically to impress; mahogany paneling, sterling silver service, oriental rugs, art collection including a Monet watercolor, a fabulous view of the city.

The door opened to a man in his late fifties, well dressed, badly out of shape, no more than  5' 8”, weighing at least 250 pounds, maybe more. He was dark complected, hair slicked back and shifting eyes. An overpowering scent of expensive cologne permeated the room. Connery shook hands, offered him a seat and asked Cindy to have coffee and pastries brought in. Castelo Branco thanked him in heavily accented English, said he had already eaten, and could they get down to business?

“I am familiar with your company Mr. Connery, and the returns you have earned your clients are impressive.”

He continued in a courteous but abrupt manner.
He appeared as someone of apparent importance who was in a hurry.

“You come highly recommended. Let me put it simply. I am considering placing a significant sum with your investment company. I assure you, the amount is substantial, but I must first have you meet with certain members of our board before we formalize any agreements. These will be preliminary discussions I’m sure you will find attractive.”

“And what kind of agreements would those be?”

“We are willing to consider paying a high premium for an equity share in Hawthorne. You would retain controlling interest, of course. If you are interested, we can piece together an agreement at our headquarters and
then leave the details to our subordinates.”

He reached for a planner in his breast pocket, put on glasses and flipped pages.