The Pretender Page 6
An Isla Verde–area real-estate agent friend agreed to serve as my former “landlord” in an apartment he owned, and a small business owner agreed to have been my boss in that career. Sounds simple, but it took a couple of weeks on the island to get that and more set up. It was worth it. Now I could rent the apartment in the trendy Greenwich Village area. Mary Jane Bocra and Craig Dotlo, my supervisors, had been pushing for all the UCs to rent apartments in Battery Park City, then a newly created (literally—on landfill) upscale yuppie neighborhood near the financial district. Not wanting to be under a management microscope, I opted instead for the ultramodern expensive loft in the hipper Greenwich Village. I successfully argued that such digs would better suit H. Marc’s image. And for some vaguely felt reason, I thought it was unwise for me to have too much in common with my fellow UC “clerks”—an unfortunately correct premonition, as things turned out. Lease and San Juan–based legitimacy in hand, I could get the electricity turned on. And the phone line. And, finally, the credit cards.
What about college? While not indispensable for a commodities trader, a college degree would help, because my persona was more along the lines of “international and refined,” rather than crude and vulgar in a Joe Pesci, Danny DeVito, Wolf of Wall Street kind of way. (The full spectrum can be found on the exchange floors.) A backstopped BA was in order, but the University of Puerto Rico, which seemed logical, would be a problem. I had no familiarity with the school and would have been unable to survive a conversation with someone who did.
Plan B was a long shot, but I contacted the father of my closest college friend, president of a prestigious northeastern university. The president knew only that in my capacity as an FBI agent, I was working an important undercover case and that a fictitious degree would be an important element in my cover story. Without more specifics than the subject matter—white-collar crime—and the general area of interest—Wall Street—he agreed to the scheme after a short meeting at his bucolic on-campus home. I was amazed but very happy, because I didn’t have much of a Plan C. Only the president and the registrar would know. The registrar had a need to know: she created an actual fabricated file—physical documentation—for H. Marc Renard and placed it in the appropriate cabinet.
One day, the backstopping process nearing completion, Mary Jane called me at my new place in the Village with the news that she had set up a meeting for us COMMCORR undercover agents with one of the UCs from the Chicago case. For security reasons—the Chicago case had been prominent news, and many of those UCs’ true identities were in wide circulation as a result of the public trials arising out of the indictments—we would meet this sleuth in a hotel room in Newark, rented with a covert credit card. This would be my—our—first opportunity to learn about the nuts and bolts of the task that lay ahead, as well as a chance to get a feel for my fellow UCs and size them up—at least three of them, the number present. The remaining two were yet to be selected. Mary Jane and Craig were on hand, of course. One of the other UCs was a relief to see: Ben Berry, my classmate from Quantico, five long years ago, the fellow Jewish attorney in NAC 85-7, and my challenger for first place in the two-mile run, whose father had commiserated with mine at the graduation ceremony. This was great. I didn’t know that Ben was one of us. I didn’t know what he had been up to for the past five years. Answer, in two words: Kansas City. The native New Yorker had discovered that there was civilization west of the New Jersey border. And they have challenging crimes out there, too. Ben had just flown back from that First Office, and he was annoyed that the Bu was not reimbursing him for the extra seat he had required to accommodate his beloved cello. Then there was hawk-nosed, long-haired Jim Clemente, he of the calm demeanor, which would soon be dissipated on the manic floor of the exchange. Representing our sister agency in the op—the U.S. Postal Inspection Service—was Jeff Davis, a blond, chisel-featured inspector, who had previously earned his living as a model. Jeff would later prove to be made of the same granite used in the chiseling, always maintaining his calm when all about him were losing theirs.
The Chicago UC guy did little to encourage us. In addition to the heightened suspicions—extreme caution really—to be expected after the wave of arrests in Chicago, he painted a grim picture of the obstacles that awaited us. And of the workload. We would be working two jobs: daytime at the exchange, evenings FBI agents. Seated in our covert apartments with the typewriters, all alone, documenting our covert activities and progress. Meeting with our contact agents. Planning strategy. Those nights that were a little different—jovial eating and drinking and bonding with target brokers—would only result in extra paperwork the following evening. The paperwork chore required an average of two hours every night. But I didn’t begrudge the tedium. It was important.
That was the bad news. The good news was that the Chicago case had proved and highlighted the importance of the undercover technique and its value as the gold standard for investigation and then prosecution in this kind of case, as well as so many others. This point is very important for both my story and twenty-first-century law enforcement at most levels. Specifically, how does any prosecutor make cases involving terrorism, organized crime, white-collar crime, without UC work and testimony? With great difficulty. Many journalists and other interested parties are upset that the prosecutions that flowed from the ’08 financial crisis, and every other financial crisis, featured huge fines but almost no perp walks. A key reason is that the prosecutions were hamstrung by the lack of UC testimony. Without this professional eyewitness element, making a tight case—in white-collar investigations especially—is exponentially more difficult. With the UC on the witness stand, the jurors hear the criminal activity described by the most reliable of all witnesses, and with audiotape or video on which they can see and hear the scheming, the winks and nods, the money actually changing hands. Without the UC, the jurors usually have only ream after ream of paper, from which they’re expected to draw the right inferences. Wiretaps may provide incriminating conversation and exchanges, but just as often, probably more often, they’re ambiguous. What did that mean? The jurors’ doubt makes it much harder to send guilty people to prison. Meanwhile, the skilled undercover agent is guiding the meetings and conversations to yield clear, incriminating results. So would it play out in my UC roles, again and again, in the years and decades to come.
In the hotel room in Newark, Mary Jane and Craig laid out the scenario they and the two case agents had developed for our new COMMCORR sting on Wall Street. The entire undertaking relied on the assistance of the CEO of Planet Oil, LTD, a leading international energy company with a presence on the COMEX exchange, specifically in the crude oil pit. (I have changed the name of the company, of course.) As I would come to learn, Craig, always an indefatigably resourceful agent, had developed Planet Oil’s CEO as a “Friend of the Bureau” through an introduction from Planet Oil’s Chief Security Officer, a retired FBI agent. The company’s presence at this time consisted of a booth, two traders, and two clerks. The basic idea was to expand this presence with the hiring of six new clerks, with the expectation that these new clerks would, with time, develop into traders and make everyone a lot more money. The CEO, going against the advice of his floor traders, wanted to bring in “new blood” (i.e., us, the FBI UC team). The basic assumption: the criminal behaviors that had been discovered in Chicago—primarily front-running in its many permutations—were also rampant in New York. How could they not be? The money was too easy.
After nearly a half year of preparation, it was show-time. In the early winter months of 1990, I, Henri Marc Renard, arrived at 4 World Trade Center for work on my first day, went through security, entered the enormous cavern that housed both of New York’s huge commodities exchanges, and found my way to the Planet Oil booth. My only previous observation of the floor having been on the film screen, watching Dan Ackroyd and Eddie Murphy in the very funny Trading Places. Trading had not yet commenced. The two genuine clerks, tall and fat Greg and short and fat and bearded Eddie
(a Hobbit, I suspected) were not openly hostile to the new clerk, who they had to suspect might bypass them on the road to the Holy Grail, Traderdom. Eddie introduced me to the other new clerks, that is, my fellow UC operatives. Jeff was courteous; Jim and Ben were more standoffish than the role required, in my view. All now had new surnames, of course, though pursuant to conventional wisdom, the true first names had been retained, the idea being that we humans are less likely to trip up if using our real given names. (A related trick among border-patrol personnel is to casually ask folks where they were born. If you hesitate answering that question, you weren’t born there.) I was skeptical about automatically retaining the first name. I had no problem with H. Marc Renard, but with future ops I’d always select a name that was operationally appropriate (Hispanic, Italian American, etc.), rather than one that would be easy to respond to.
Filling out the immediately pertinent dramatis personae of the COMMCORR sting—and present that morning, of course—were Planet Oil’s two licensed traders: Pete, short, gray-haired, surprisingly soft-spoken (which is rare for his occupation) when not trading, about forty-two going on sixty-two; and his partner Tommy, midthirties, with a broad porcine face, black hair brushed back, toting an extra fifty or sixty pounds, lending him a more fixed position on the floor. Tommy did not suffer the impediment of being soft-spoken. Loud and vulgar, he was reflective of a great many in his profession: a born blowhard.
The trading bell rang. The place instantly erupted. I found myself in a human anthill: deafening shouting, thousands of bodies pressed together, standing, swaying, and pushing. Bedlam. This was the era of Desert Storm, the first Iraqi war, and no other commodity compared in volatility to crude. Fortunes were made and lost in minutes. The volume and pace was dizzying. Eventually, I came to comprehend the activity, in much the same way that hearing a crowd shouting in an unknown language begins as unintelligible noise, which gradually acquires meaning as one’s language skills develop. But in the beginning, the pits consisted of masses of men shouting at the top of their lungs and frantically waving their arms back and forth. Ringing the pits were masses of clerks, moving from booth to booth, hurriedly talking to traders to relay orders, or talking on the banks of phones attached to the flimsy booth walls. Eddie, the clerk, would get off the phone, run (literally run, seconds meant money) to the pit, where Tommy, the trader, was stationed like a statue, and whisper (read: with hands cupped, shout into Tommy’s ear) the order: “Buy 500 Oct at 10.” Translation: Buy 500 futures contracts for delivery of crude oil in October at 10 cents of the dollar value they were trading at. If they were trading at $90.05 per barrel, he was to offer $90.10, and buy as close to that price as possible. As each contract consists of 1,000 barrels, minor fluctuations rapidly translate into big money.
As soon as the rest of the pit realizes Tommy is buying a large number of contracts, the reaction is akin to what might be expected when raw meat is thrown into a pit of hungry lions. Impossibly, the volume rises, the frantic waving becomes more frantic, and Tommy is scribbling even more frantically onto a notepad of buy/sell order forms. As soon as a page’s lines are all filled, he tears off the sheet, throws it to a hovering Eddie, who in turn runs over to me, as I stand at the booth, yelling into one phone and holding another to my free ear (jumping ahead now, I wasn’t doing this on the first day). I am already working on the prior page from Tommy’s order pad when Eddie thrusts the new scribble at me and runs off. My job was to confirm each of the trades with a clerk for the trader on the other side of each transaction, identified by the oversized rectangular badge pinned to his shirt. If there were fifteen trades on the page, each of the fifteen clerks had to be called, or tracked down at their booth, as rapidly as possible. Any discrepancy as to price, number of contracts, or identity of the trader on the other end of the transaction could have an impact of several thousand dollars.
While it was not my money, and I could not have cared less about the trades, I had to do as good a job as possible—both to advance my career at Planet Oil and my career as an FBI undercover.
The opportunities for skullduggery in this system are probably pretty apparent. (Today those opportunities are more limited; the use of handheld computers has eliminated much of the paper-based fraud.) It all came down to front-running—traders using prior knowledge of customers’ orders to aid their own trades. This was accomplished by large-volume traders, such as Tommy, who passed their insider information to small-volume independent brokers (referred to as “Locals”), who would then make a huge profit using the illegal tip, and later split the gain with Tommy. One objective of COMMCORR was for me to climb the ladder and become a local and participate in these crooked trades.
Ironically, it was an error made in executing my clerk duties that led to the first real break in the case. One midmorning about three months after I had started work for Planet Oil, I could not find the clerk to confirm the details of a large trade between Tommy and a broker standing next to trader QQQQ, as identified by the badge pinned on his chest (that was his actual ID, one that constituted knee-slapping humor on the floor—a pun: Four-Q … fuck you). I moved on to the next trade, then the next, then the next, and then, ten minutes later, found the broker’s young, overloaded clerk at her booth, juggling several phones. She denied the trade. It wasn’t on her trader’s card. Uh oh … This was the first time this had happened to me. When I relayed the news to Tommy, he went postal. As the others looked on, grateful they were not standing in my shoes, his shouts drowned out even the background din of the pit.
“You fucking moron! Asshole! Dumb shit…!”
I stared at him, mute. Every ounce of control, all my reserves of strength, self-discipline, were dedicated to not punching his Porky Pig face and breaking his nose. But did I want to be fired from Planet Oil, pulled off of my first UC op, sent back to SO-13, or more likely, a permanent slot on the Applicant Squad? I just stood there until he lost interest and returned to his place in the pit. The missing trade issue would be handled after-hours. This would be just one of many episodes on Wall Street that convinced me that the brokers on the trading floor—Tommy, Four Q’s neighbor, and the rest—were, quite frankly, some of the most despicable people I’d ever met, or would ever meet. Generally speaking, the drug dealers and car thieves and other street professionals I’d later deal with (and, in some cases, get to know well) had more sympathy for their fellow men and women than those ravenously greedy Jordan Belfort (The Wolf of Wall Street) and Gordon Gekko wannabes on the floor of the commodities exchanges.
After trading closed, I took my time at our booth, completing the forms that, as junior clerk, it was my daily responsibility to complete. Tommy and Pete had waved three or four of their friends over, traders for large brokerage houses or multinational oil companies. The loss from the missed and denied trade was over $25,000. As the traders studied their notecards and made changes, Tommy completed a new sheet from the order pad, handed it to me for processing, and tossed the old sheet into the garbage. The new sheet (which I later photocopied) was minus the trade with Four Q’s neighbor in the pit. The old sheet—well, I scooped that one out of the garbage after they were all gone. Here, finally, was real, tangible evidence of fraud. Two documents covering the same set of transactions, one true, one altered. And a UC as eyewitness. Mary Jane and Craig had something besides hopes and aspirations to report back to FBIHQ and Justice. COMCORR was beginning to provide returns.
* * *
In those first months, none of us UCs were wearing recording devices, primarily because there was nothing to record. We were not yet in a position to engage in any kind of criminal activity. We were not yet brokers, and certainly had not developed the relationships necessary to become partners in fraudulent transactions. On a more practical level, there remained the problem of passing through the metal detector at the COMEX entrance, and of concealing a device in a chicken-farm environment where privacy is a quaint memory, a luxury for the evening hours. The constant high decibels of the pit and
environs would require mics to be as close to mouth/ear level as possible, if anything discernible as communication was to be recorded. A real problem. In Chicago, they had managed without adequate recordings, relying on the detailed notes of the UCs, meticulously corroborated by the documents reflecting the fraudulent activity. While the evidence had proved sufficient for successful prosecutions, Craig sought to make the cases bulletproof, unassailable by defense attorneys, and, not surprisingly, he came up with a kind of Rube Goldberg solution.
The standard law enforcement recording devices of the day, solid and reliable, were the Swiss-made Nagra and mini-Nagra—the former, the size of a trade paperback; the latter, a bit larger than a deck of cards. The plan was to hollow out the sole of a high-top sneaker, creating a space to fit the mini-Nagra. Then a series of wires would run up the inner-pants leg and then the shirt, with the mic at collar level.
My fellow (Jewish) tribesman, Ben Berry, and Jim Clemente were selected to carry the first devices. Unlicensed traders-in-training were permitted limited time in the pits, under supervision of an experienced broker. Ben and Jim, the first UC clerks hired by Planet Oil, had recently been granted this privilege. Wearing the devices was somewhat of a gamble, as the likelihood of actually capturing clearly audible, incriminating conversations in the din of the trading pit was remote, while the risk of discovery was not negligible. Jim enjoyed believing that wearing a wire around the trading pit would be dangerous, but I felt that was histrionics. It wouldn’t be dangerous, in the sense of exposing us to physical injury. We might get caught, but we weren’t going to get killed. Only a few years after COMMCORR did I realize the tremendous advantage I had by starting my UC career with a white-collar investigation. I could learn to live the lie, to walk the walk, and talk the talk of an alternate persona without having to worry about being murdered should I slip up. At a time when all UC training was OJT, COMMCORR was my Undercover Academy.