Unraveled

Unraveled, Chapter 11 - The Pieces

Abram Hayes and Benjamin Thomas sat opposite each other in the middle of a long conference table.  The table was covered in stacks of paper, pens, paper clips and post-it notes.  There was a speakerphone unit in the middle of the table.  Each of Abram and Benjamin had laptop computer off to the side.

“Find anything new?”

“Not yet,” Benjamin replied.

They each continued to pore through the documents.  Abram was unable to obtain the approval of his superiors or the Congressional committee to progress with his investigation of QR Capital.  He would have had warrant and subpoena power that would have given him access to a wealth of information about how QR Capital raised money and paid it out.  He was sure the funds were misappropriated.  The news was already leaking to the newspapers.  Another Madoff-type event would be a horrible black eye for the Department.

Without the authority to go after QR Capital directly, Abram and Benjamin decided to take an end-around route.  There were court files that were sealed, but a Department of Justice identification card opens a lot of doors.  It can also open doors to IRS files.  QR Capital files some documents with the Securities and Exchange Commission, but they were few and with little information.  However, when looking for little pieces of a much bigger puzzle, every little piece counts.

Abram had decided to abandon the strategy of tracing where the money went.  Without the authority to after QR Capital directly, this was a lost cause at this point in his investigation.  Instead, Abram decided that he would try to find his way in by starting from where the money came from.

Abram and Benjamin had before them a table full of offering documents that QR Capital used when soliciting investors.  While its investor list was private and not required to be disclosed anywhere, somewhere in the court and government files was the key to the identity of QR Capital’s investors and with that, the key to getting to the bottom of the money trail.

Benjamin was flipping through the offering memorandum for QR Capital’s last investment fund.  The fund’s purpose was broadly written to invest in anything Quincy Roosevelt thought would return a profit to the fund.  The purpose was not narrowly tailored.  There was a section of the offering memorandum that outlined the “Principal Securityholders” of the fund that discussed the officers, directors and five percent holders of the fund.  Although this would seem to be fruitful, at the beginning of the life of the fund, only entities related to Quincy Roosevelt and QR Capital were listed in this section.

Abram was sifting through a pile of documents and came across a discovery response that was labeled “Confidential” and under seal.  It was the list of the initial investors in the QR Capital’s last fund.  These were the first round investors who would have received the funds from later round investors if Abram’s theory of the case were true.  This was the starting point.

Abram placed a small, yellow sticky note on the right side of the page to mark it as relevant.  He slid the page across the table to Benjamin, who reviewed it and smiled.

Abram reached to the middle of the table and began dialing a phone number.  The telephone tones from the speakerphone bounced off of the walls of the conference room.

“Hey, boss, I think we found something,” Abram uttered excitedly.

“What have you got?”

“I think we have a list of investors who could provide some insight into Roosevelt’s business practices.  This seems small, but it could be the break we need, and we wouldn’t need a warrant,” Abrams argued.

“What would you need?”

“We would need approval for a travel budget.  We need to talk to these guys face to face.”