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Read some exciting excerpts from Dot Com, now available from Writers Club Press and iUniverse. For more, or to order, click the link at left.
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Prologue
The office building in Houston was in an area that had never seen first class office space. The one and two story office buildings on Marquardt housed businesses that were on the edge. Many failed. Those that stayed were not overly successful. Five government cars pulled up and four large men got out of each car, each wearing a suit with a bulge, and most carrying clipboards. They ignored the chill and light drizzle. One man opened a trunk and pulled out a door ram, which two of the men carried up to the second floor. Once in the building, they gave hand signals on where to position themselves, covering four doors. The two men with the ram stood in front of the entrance to Suite 205. On another hand signal, they rammed the door in.
“FBI. This is a raid. Everybody freeze,” shouted the first man in the door, weapon drawn. The petit secretary at the reception desk fainted. The rest of the large open room instantly became quiet. Forty people in front of computer monitors looked up. No one moved.
The first thing the third FBI man noticed as he entered was that everyone was Asian. As he looked closer, he decided they were Japanese. Odd for this neighborhood of mostly Houston small business types.
“Which one is Aki Nishikawa?” asked the first FBI man. One man came forward. “This is a warrant to search this office. You and your people are not to destroy any records, computer or otherwise. Do you understand?” Nishikawa shook his head yes. He had no experience like this, and didn’t know what to do.
Everyone except the FBI was sitting or standing around doing nothing. The FBI agents fanned out throughout the office, and began taking notes. They sat at each computer and typed in enough to identify the temporary Internet address, and wrote it down. These addresses would be correlated with the information from the government’s Internet monitoring Carnivore system to determine what traffic had happened on the particular PC. From that, they would reconstruct the day’s events in this boilerroom.
As the agents were taking notes, one wandered around observing. Odd, he thought. They are all connected to bulletin boards dealing with stocks. He also observed that beside each PC was a list. It was in some oriental language he couldn’t read. The lists did all look alike, though.
The lead Special Agent walked in a few minutes later, and was surprised at what he saw. There was no money, no wire transfer forms, none of the usual money laundering evidence they had expected to find. Just what looked like a telephone sales shop or “boilerroom”, but with no phones, just computers.
****
Senator Frank Haroldson’s office in San Francisco was not opulent. In fact, it looked more like a small corporate office. Haroldson had used the office furniture company’s decorator, and the result was tasteful but understated. Fine for the local office. Here, the Senator’s position as chairman of the Finance Committee, and his clout earned over three terms, were enough to command respect without any extra trappings.
Henry Dillard, the Senator’s campaign manager, had arranged a meeting with a “hot prospect,” an attorney who wanted to discuss trade affairs and financial reporting for dot com companies. Omura, the attorney, representing Japanese clients and claiming not to be a lobbyist, had called out of nowhere and asked for the meeting. He had mentioned “friends who would like to appreciate their support in tangible ways.”
Omura arrived two minutes before the time for his meeting with the Senator. The receptionist announced him to the Senator’s personal secretary. She kept Omura waiting for exactly four minutes, then led him in.
“Greetings, Omura-san,” said the Senator, extending his hand and dipping his head slightly rather than bowing. “It is good to meet you.”
“Good day, Senator. Thank you for meeting with me on behalf of my client.”
“I’ve asked Henry to join us. He said you wished to talk about the software industry, so I’ve also asked one of my staff to join us by phone. Charles Halpern is on the phone from my office in Washington,” said the Senator, gesturing to the phone.
“Hello, Mr. Omura,” came from the speaker phone.
“Won’t you be seated.”
They talked about trade policy and accounting issues for a few minutes. Omura mentioned various matters he felt should be of concern with the SEC. Soon, Charlie was dismissed. Then the real discussion began.
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“Howard, she just doesn’t appreciate you. Doesn’t she see how hard you work for her?”
“That’s a bone of contention, too. She says I put in too many hours. But she knew that would be the case. I’m a Big 5 audit partner, so I have to put in the hours. I’ve pointed out that I don’t work nearly as much as our neighbors, both of whom are with big law firms. She still complains at least once a week. She said she might as well have married a priest for all the attention she gets.”
“Priest, not rabbi?” said Cindy.
“Priests are celibate, rabbis aren’t.”
She leaned a bit closer and lightly rested her hand on Howard’s forearm. “I’m sorry,” she said. She kept her hand in place and risked the next question. “So your love life isn’t any good either?”
“No,” he said, and took another large drink, draining the glass.
Cindy waited a moment, then said, “Let me get you some more.” Cindy took off her jacket before pouring Howard another drink, and leading him to the sofa, where she sat much closer than before.
“Howard, you’re bright and good looking. I know your partners respect you, and you have a great career. Carol should appreciate that. It’s not right.”
“Thanks. I guess I just have to tough it out for a while, and hope it will get better.”
Cindy was quiet for a while, then leaned closer. “She doesn’t realize what a good man she has.”
Howard could smell her perfume, and this time actually feel the warmth of her body. Cindy’s mouth was inches from his, as she looked him in the eyes with as much warmth. He kissed her briefly.
Realizing what he had done, he put down his glass on the coffee table and started to apologize. Cindy ran her hand through his hair to the back of his head, and pulled him toward her. They kissed for over a minute. Howard looked at her, the attractive face, her breasts revealed through the sheer fabric of blouse and bra. He kissed her again, and found his hand on her breasts. She smelled delicious, of cognac and perfume, and her hot breath turned him on more than he had been in years. Soon, she led him to the bedroom.
Howard called his wife on his cell phone to tell her he was staying over in the city as he occasionally did this time of year. He kept a spare suit in his office and would wear that. He wished her goodnight, then got back in bed with Cindy. She pulled him to her breasts, which he mouthed hungrily.
In the afterglow of the second time, she said in a small voice, “I don’t know what I’m going to do if we have to restate earnings. Jim will kill me ... or worse.” She managed to produce a tear.
“I’ll see what I can do,” said Howard, and held her close. He was intoxicated, but not from the liquor.
The next day, he got the concurring partner to increase materiality from $750,000 to $850,000, and earnings stayed the same. No one asked any questions. Cindy promised to recognize the hit during the second and third quarters.
Cindy had been to bed with Howard several times since then, but had never asked for another favor. Best not to let him realize, she thought, just in case she needed something. She might need something again, and this time it would be harder.
The second quarter had come and gone, and the pressure for earnings was greater than ever. Early in the third quarter, she and John realized that their billings on account had significantly increased, due to demand for the Zephyr product. Most of the Zephyr customers took advantage of the three year deal GlobeTrak.com offered, giving them a 20% discount on the software license if coupled with three years of services, with license payments made over the first twelve months.
John came up with the idea. They would record the full three years of revenue on the license as income the first year. Cindy thought it made sense, or at least could be justified, since they had the cash within twelve months. She authorized John to book it that way.
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Martin the C&Y audit manager was still groggy from the late night before, and reacting slowly this morning. Audit jobs required long hours during busy season. He was looking at the trial balance again, just to see what he had missed, and it jumped out at him. The trial balance listed all the accounts the company used and the year end balance, but with no detail.
Merger Reserve.
Why would they have a reserve for merger-related expenses, he wondered. He wasn’t aware of any mergers or acquisitions. This wasn’t a small number, either. He pulled out the detailed general ledger printout, which showed all the journal entry activity for the year for each account. Only four journal entries, all fairly recent.
“Sally, could you get copies of these journal entries? Print them out for me,” he asked his one remaining staff person. Janet had been pirated by a senior manager working on a large job.
When Martin looked at the entries, he was even more puzzled. They just didn’t make sense. He put the copies in the file of things to discuss with Howard, who would be in later.
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