Terminal Value Part 24

"LC is a compet.i.tor to Hyperfn. Out of the blue they launched their own competing mobile business. We lost Hyperfn as a result."

"I'm sorry to hear that. But no, I've never heard of LC."

"What about Hyperfn? Was there anything about the account?"

"Rob and Matt handled it. We had team meetings, of course, but-" He shook his head. "What the h.e.l.l is going on?"

"I can't go into details, Rich, but it looks like someone at Mantric may have stolen the Hyperfn information and sold it to LC."

"Christ! Really? Is Christine involved?"

"I can't rule that out," Heather said cautiously.

Rich leaned forward. "Heather, nothing would surprise me about that woman. I've done a lot of thinking about it since I left. Did you ever hear about a company called Cendant?"

Heather shook her head.

"Check it out. It happened pretty long ago, but it was a huge scandal. It sounds similar." He met her eyes. "Seriously. Check it out. C-E-N-D-A-N-T."

"Thanks, Rich. I will. And I'm sorry I've been out of touch."

"That's perfectly understandable. Don't apologize at all."

"All right. Let's make a point to get together again. Soon."

He stood. "Sounds great. Take care of yourself, Heather."

"You too, Rich."

May 16, 9:30 a.m. Boston Sarah opened the door and walked in. "You're in late today, aren't you?" She looked at her watch.

"Yeah," Dylan answered curtly. "What's up?"

Sarah sat on the corner of his desk. "I just wanted to quickly review your calendar today, but I can come back later if you like."

"No, that's okay. Sorry to be short, but I just have lots on my mind. What's on the calendar?"

She shrugged off his indifference. "Well, it's actually pretty light. You have a couple of calls to field, at ten and eleven, and then a video conference this afternoon at three."

"Okay." It hadn't escaped Dylan's notice that Sarah was trying hard to keep his schedule fairly open. He appreciated it.

"Oh-and you might want to spend some time going through your e-mails," she added as she turned to leave. "I've had a few people call wondering if you ever got them."

He frowned. Ever since joining Mantric it seemed like he received at least fifty e-mails a day. He used to be pretty good about staying on top of it, but he had recently fallen behind. "Okay, I'll do that this morning. Thanks."

"You're welcome. Door open or closed?"

"Closed, please."

She nodded and closed the door behind her.

Dylan turned back to his computer and called up his e-mails. He shuddered at the long list: over two hundred unread messages. As he started plowing through them, he noticed how many were a back-and-forth discussion of some particular problem. Most had been resolved without his involvement. It was as if he were already out.

He remembered his conversation with Matt and felt the anger rising in his mind. His thoughts wandered back to the weekend as he and Heather watched the videos over and over until they were almost memorized. He knew he would never receive Tony's e-mail. It was time to stop beating his head against that wall. He had secondary proof that Art and Christine were heavily involved in some scam, but no proof as to what it was. All he knew was that he would give anything to find it. He also feared they were involved either directly or indirectly in Tony's murder. Time to do some research. He opened up his web browser and Googled the Securities and Exchange Commission website: a vast archive of stock market history and data. In response to the great stock market crash of 1929 and the ensuing Depression, Congress had established the SEC in 1934 to protect investors.

As he looked through its site, Dylan noted that the primary mission of the SEC was to protect investors and maintain the integrity of the securities markets. If he could find hard evidence that Mantric was cooking its books to fraudulently boost its stock price, the SEC would certainly be interested. He wrote down the address of their Boston office.

Dylan searched through the site looking for the Office of Internet Enforcement, commonly known as the "Internet fraud squad." It had been created to combat the opportunity the Internet had created for stock swindling schemes. Dylan added the Was.h.i.+ngton, D.C., number of the director, Steve Markes, to the contacts list of his new Tracfone.

Then he went to www.fbi.gov.

Thirty minutes later he pushed back from the desk and walked out of his office. "I'm going down for a c.o.ke," Dylan said as he pa.s.sed Sarah's desk.

"I can get you one," offered Sarah.

"No, thanks, I'll get it myself."

Dylan left the office and took the elevator down to the second floor. When he arrived, instead of going to the cafeteria, he turned left and slipped into an empty conference room, where he pulled out his Tracfone.

"Hi," Heather said. "You okay?" The sound of an espresso machine roaring in the background and customers being called to pick up orders a.s.saulted Dylan's ears.

"Yep." He heard clinking sounds. "Where are you, anyway?"

"I'm at a restaurant. Had my meeting. It went okay, but nothing much to report. He didn't work on that account. Just Rob and the team. And he knew nothing about LC."

"Okay."

"But he has suspicions. He says to check out a scandal involving a company called Cendant."

"I vaguely recall something about that company, I think. I'll check. Anything else?"

"Nope. Just doing research in my new and very public office while I wait for my eleven o'clock."

"Be careful."

"You too."

May 16, 10:30 a.m. Boston Back at his computer, Dylan popped open his c.o.ke and Googled Cendant. Over 100,000 hits. He read the detailed report about the company and its "irregular accounting practices" over the course of three years. Once it was discovered, Cendant's stock dropped in market value by fourteen billion dollars in one day. It also triggered one of the largest shareholder lawsuits in history.

Dylan scanned the report until he reached the section that indicated that the CFO had kept a schedule the management team used to track the progress of the fraud itself. Dylan pushed back quickly from his desk, and his mind rushed over the details. "Holy s.h.i.+t," he said out loud. "Schedule B!"

May 16, 11:30 a.m. Boston "Hey, Heather."

Heather, lost in her laptop, jumped when she heard her name.

"Whoa! Didn't mean to scare you!"

"Hey, Matt. Sorry. I guess I was pretty absorbed in my work."

Matt sat down in the chair that Rich had occupied earlier. "I like your new office. The decor. The staff. An upgrade."

"Agreed." She smiled. She had always liked Matt, and hated what had happened to him.

"Did you get booted too, or are you just playing hooky?" he asked with a lopsided grin.

"I needed the air. After Friday-Jesus, Matt, I'm sorry. Dylan did not want to send that letter to you."

"Hey, I understand. Dylan wants to get to the bottom of this LC mess, and he can't do it if he resigns, so I had to be the one. I believe him." He shrugged. "Besides, I've been expecting this for days. Things just aren't right there, Heather. But hey-I already wiped my office computer," he joked.

"It's all so incredible. I just wanted to see you face-to-face and for you to know that, somehow, all of this is going to work out."

"Look, Heather. I'm done with Mantric. I don't care about being fired. Except for one thing. All I honestly care about is finding the SOB who sold us out to LC and proving it wasn't me or anyone on my team. If they hadn't fired me-"

"You'd have worked it out eventually?" Heather cut in.

"Well, I think so. I felt really close to discovering something, something I mentioned to Dylan about coding-" he faltered.

"Matt, I think you have it exactly right. I think you were fired because you were on the verge of working it out. I need you to tell me everything you did after your conversation with Dylan on Friday."

Matt's eyes widened. He nodded slowly, collecting his thoughts.

May 16, 2:00 p.m. Boston "How did it go?" Dylan asked, holding the Tracfone close to his ear.

"Okay." Heather whispered. "He's a little upset, but not as angry as I expected."

"That sums Matt up. Did you get his itinerary from Friday?"

"Yeah. He didn't tell Rob he had been fired. Rob told him to go home, eat something, pull down the blinds, and go to bed, and he'd send him the files when he woke up and checked in."

"Hmm," Dylan said, gathering his thoughts.

"He said he went out like a light and woke up at about six. He found an e-mail from Rob saying, and I quote, 'Bad news, Matt. Got an e-mail from Art saying I was to have no further communication with you about company business. What's going on?'"

"What did he say to Rob?" Dylan asked, his mind racing over the turn of events.

"He said he didn't want to get Rob in any trouble."

"Okay. Now with Matt out of the picture, we'll leave LC to Rob, and we can focus on the real issue-proving who killed Tony and why."

"Agreed. Have you discovered anything more that might finger Art or Christine?"

"I followed up on Rich's suggestion and checked out Cendant. According to what I read, the company was formed in 1997 by the merger of CUC and HFS. One was a direct marketing company and the other was a franchiser."

"And?"

"Well it turns out they had inflated their earnings by 500 million dollars over the previous three years. That triggered one of the largest shareholder lawsuits in history. Cendant agreed to pay two-point-eight billion dollars to settle, effectively admitting their management team had issued false and misleading statements and sold a large portion of their stock at inflated prices. And get this. The CFO was not only deliberately falsifying the company's quarterly and annual financial results, he actually kept a schedule that the management team used to track their progress."

He heard a slight gasp. "A schedule? Schedule B?" Heather asked.

"That's right."

"Jesus. Do you think Art and Christine would be stupid enough to actually keep a schedule like that?"

"Nixon was stupid enough to tape-record his conversations, wasn't he?"

"Okay. In fact, if we use Cendant as a template for what's happening here, I think I can add to the picture."

"I'm all ears."

"I did a little work myself while I was waiting for my appointments. I've built a spreadsheet model. You know, loading all our consultants by rank, the billing rates they charge, and an estimate of the average hours they should be billing. I started with our San Francisco office. Based on the number of consultants there, I calculated that they should account for about ten percent of our revenues."

"And?"

"It wasn't even close. And, since I've been out there a lot, I happen to know there are a number of consultants who aren't working on any projects at all."

"Christ."

"There's more. Then I did the same exercise for all of our offices. I even used a very conservative estimate of the hours they are billing by rank, a good fifteen percent below what we've been told. I plugged those numbers in and totaled it up."

"Let me guess. That wasn't even close either."

"Not by a country mile."

Dylan was stunned. He wanted to ask her if she was sure she'd run the numbers right. But of course she was.

"Dylan, do you remember when we were at Docks and I told you how enthusiastic those investment bankers were about our stock?"

"Yes."

"Well, I checked out all the major investment sites and message boards. You wouldn't believe it. There are tons and tons of postings playing up Mantric and how hot we are and how high our stock is going to go. There are even rumors being posted that some of the big firms like IBM are taking a look at acquiring us."

"Acquiring us?" he said skeptically. "I haven't heard anything about that."

"That's my point. It's as though someone is spreading rumors on purpose."

"Maybe they are. Maybe that's another part of the whole campaign." Dylan sat back and rested his head on the sofa, then jerked back upright. "Heather, does this mean what I think it does?"

"It means we're on to them."

"Yeah. Only we just don't have the d.a.m.n evidence. And, if we are correct, the bigger question is: Did Tony know? If he did, then we have strong evidence of a motive for his death."