Death, Taxes, and a Sequined Clutch

A Tara Holloway Novella

A Tara Holloway Novel

Diane Kelly

St. Martin's Paperbacks

DEATH, TAXES, AND A SEQUINED CLUTCH (Chapter 1)

Pump and Dump

My coworker, IRS Senior Special Agent Nick Pratt, sat at his desk across the hall, his chair angled back and his cowboy boots propped on his desk, his whiskey brown eyes locked on the spreadsheet in his hands. My gray blue eyes, in turn, were locked on him, though I tried to hide that fact by positioning my laptop so that I appeared to be reading the screen.

Try as I might, I couldn't get the guy out of my mind. Normally, thinking about a tall, dark-haired, and broad-shouldered cowboy might bring a girl some pleasure. But for me, having Nick traipsing constantly about in my mind was pure torture, for two reasons: First, because he was often traipsing about my mind without a stitch of clothing on--other than his boots, of course. It was enough to keep a girl hot and bothered 24/7. The second reason thinking of Nick was pure torture was because as much as I wanted him--hell, as much as I yearned for him--I couldn't have him.

That sucked. Big-time.

Together, Nick and I had recently gone after a popular reverend with a nationwide television ministry. The guy purported to be a man of the cloth, but in reality he was nothing more than a con artist. Though his sermons encouraged his flock to do good deeds, he'd failed to practice what he preached. Rather, he bilked his church, his parishioners, and honest taxpayers out of hundreds of thousands of dollars that he used to pay for the lavish home he and his wife lived in, as well as expensive clothing, fancy dinners, and trips to exciting foreign locales.

The case ended, well, let's just say in a heated exchange, and I was emotionally shaken. Brett had been out of town, so I phoned Nick for support. He'd rushed over and held me all night.

God help me, but nearly losing my life had been worth every second of Nick's touch.

Problem was, he hadn't touched me since. Another problem was, I shouldn't be craving Nick's touch when I was committed to another man.

Thus the big-time suck-fest.

My boss, Lu "the Lobo" Lobzinski, stepped into my line of vision, obscuring my view of the gorgeous yet cruel god that was Nick Pratt. "Got some good news for you, Tara."

Lu's sense of style was forged during the Johnson administration and hadn't been updated since. Today she wore a gauzy orange dress and a beaded necklace that cascaded over her ample bosom. Add in her strawberry blond beehive wig, false eyelashes, and platform heels, and she was, as always, a sight to behold. But don't let her outdated sense of style fool you. When it came to more important matters, like collecting past-due taxes owed to Uncle Sam, the woman was totally on her game.

"Good news? What is it?" I asked, glad for the distraction, though I probably shouldn't call my work a "distraction," should I?

The Lobo walked into my office. "Looks like the terrorist case is going to work itself out. One of the men that Homeland Security arrested has agreed to talk in return for leniency. The lawyers are still working out the details, but you're off the hook, at least for the time being."

As the top financial sleuths on the federal government's payroll, IRS special agents were often pulled into the investigations of other agencies to assist in deciphering complex financial data, seeking out hidden assets, or, in the case of the terrorists, tracking a money trail. Sometimes working with other agencies could be fun. I'd recently teamed up with a female DEA agent to bust a drug-dealing, tax-cheating ice cream truck driver. The two of us had a blast bringing the sleazebag to his knees. But, roadside bombs aside, the pending terrorist case would not be a blast. In fact, the photos and information in the file were so disturbing they'd given me horrific nightmares. Not that I'd tell my boss or coworkers. Didn't want anyone thinking I couldn't handle the stress of my job. Still, I was thrilled the case was working itself out without my involvement.

"One less case on my plate?" I gestured to the towering stack of files on my desk. "You won't hear me crying about that."

"Good." Lu crossed her arms over her chest and narrowed her eyes. "And I'm not going to hear any bellyaching about me signing you up to help the SEC, either. Right?"

Another assignment on top of my already heavy caseload? Aw, hell. But Tara Holloway never backs down from a challenge. "No, ma'am." If there was going to be any bellyaching, I'd do it privately over margaritas with a friend.

Lu handed me a business card.

SHEILA SIMMS

ENFORCEMENT DIVISION

SECURITIES AND EXCHANGE COMMISSION

"Give Simms a call ASAP," she ordered. "She needs someone pronto."

I picked up my telephone receiver. "I'm on it."

I began punching numbers as Lu stepped away. As I listened to the ring and waited for an answer, I glanced up.

Two whiskey-colored eyes were locked on me now, watching me from across the hall. Nick didn't look away when our gazes met, but he didn't smile either. Instead, his eyes narrowed slightly, as if he was assessing me.

A few weeks ago, he'd let me know in no uncertain terms that he was interested in me, told me to "just say the word" if I wanted to give the two of us a try. In all my life, I'd never been so damn tempted. Deciding to stay with my current boyfriend, Brett, had been a gut-wrenching, heart-wrenching decision.

Turning Nick down was the most difficult thing I'd ever done. Not a day had since passed that I didn't doubt my decision.

Had I made the right choice? Or had I simply made the safe choice?

And could Nick sense my emotional turmoil?

"Hello?" came an irritated woman's voice through my earpiece. "Hello?"

Sheesh. I was so caught up in my thoughts, I hadn't realized Sheila Simms had picked up the line. I swiveled my chair so I could focus.

My insides were a twisted mess, but I had a job to do. Come hell, high water, or a hot, hunky cowboy, I'd get the job done.

An hour later, Sheila Simms and I walked side by side through downtown Dallas. At ten thirty, the sidewalks were relatively clear, only an occasional professional in a business suit passing by. The late September air was warm but not hot. The sun that had mercilessly broiled North Texas all summer long was finally showing some pity.

Sheila was an experienced criminal investigations agent in her early fifties with an average build and a hint of crow's-feet around her eyes. Her short, fluffy hair was the monotone pale blond of a do-it-yourself dye job, her pantsuit a basic navy blue like mine, with the same telltale bulge of the hip holster that housed a standard-issue Glock.

The two of us were on our way to a downtown accounting firm. The warrant in Sheila's briefcase gave us the authority to search the records of the CPA firm that had audited the current target, H2 Incorporated, a high-tech firm that produced a variety of custom-designed software.

She gave me the scoop as we walked. "H2 is owned by two brothers, Hunter and Tanner Hildebrand, a couple of cocky dot-com types. The company was formed two years ago and was privately held until last month, when it made a three-million-dollar initial public offering. Shortly after the IPO, the owners began to liquidate their holdings."

She went on to tell me that the brothers had failed to file the Form 4 disclosure reports required when insiders purchased or sold company stock. In order to keep the securities markets fair, the SEC made information about insider transactions available to the public in its Electronic Data Gathering, Analysis, and Retrieval system, known for short as EDGAR. Without the required disclosure form, the SEC did not immediately know the Hildebrand brothers had sold off a large portion of their investment. The agency might never have known if not for a vigilant employee who'd noticed the unusual activity in H2 stock and brought the matter to the attention of his supervisor.

The failure to file the report carried an array of potential civil and criminal penalties, ranging from a small fine to extensive jail time, depending on the egregiousness of the violation. Our job was to sift through the evidence and determine whether the company's owners deserved only slap on the wrist or, alternatively, handcuffs slapped on their wrists.

"I've questioned the Hildebrand brothers," Sheila said. "They claim ignorance, but I'm not buying it. They're a couple of smart cookies and they hired one of the best law firms in Dallas to handle their IPO. I have a hard time believing their attorneys didn't instruct them to file disclosure reports for their stock sales."

Unfortunately, we couldn't ask their attorneys whether they'd advised the brothers to report their stock sales. The attorney-client privilege protected communications between a lawyer and client from disclosure. Accountants were not afforded the same privilege, however. Not only were we free to interrogate the CPAs who'd worked on the H2 audit, but we could also run amok through their paperwork. But don't worry, I never let my power go to my head.

Well, almost never.

We turned onto Akard Street and approached the bank building in which the offices of my former employer, the CPA firm of Martin and McGee, were located. When Sheila slowed to enter the building, I hesitated.

"What accounting firm audited H2?" I hoped it wouldn't be Martin and McGee. I'd left on good terms, and even though we'd been on opposing sides in a recent tax dispute, the managing partner and I shared a mutual respect. Showing up with a search warrant and rummaging around in the firm's files looking for evidence of wrongdoing would be more than a little awkward. Still, it would be far worse to let the Lobo down. My boss had undergone chemotherapy treatments for lung cancer only weeks before and the last thing she needed right now was one of her agents wimping out on her. But there were three other accounting firms in the building. Maybe one of them had audited H2. I crossed my fingers.

Sheila pulled the glass door open. "The auditing firm was Martin and McGee."

I uncrossed my fingers and glared at them. Stupid, useless fingers. I gave my left hand the finger with my right, then returned the gesture with my left. When I caught Sheila eyeing me with an odd look on her face, I forced a smile. "Stiff joints," I said, holding out my hands and flexing them. I shoved one hand in my pants pocket and grabbed my purse strap with the other. "In the interest of full disclosure," I said, "I used to work for Martin and McGee. In the tax department."

"Is that going to be a problem?"

"Not at all," I said. I meant it, too. I wouldn't let personal relationships cloud my judgment or prevent me from doing the job the American taxpayers paid me to do.

We continued on into the marble-floored foyer. Though it had been less than a year since I left the firm, it seemed like much longer. Not that I wasn't enjoying myself at the IRS, because I totally loved my job as a special agent. But things had changed so much since I worked here. I had changed so much. Or, perhaps more precisely, I'd found myself. I'd never felt completely comfortable at the accounting firm, but joining the IRS had felt like coming home.

Sheila continued to fill me in as we walked to the elevator bank, climbed into an open car, and rode up. "Just before the IPO, the Hildebrand brothers engaged in an aggressive PR campaign. They posted messages in online forums about the public offering, sent e-mails to wealthy venture capitalists, even started a blog to build interest in H2 stock. They also bought space in a number of national magazines. Money. Fortune. Businessweek. They ran a bunch of those promotional pieces that are made to look like objective articles but are really paid advertisements."

"Were any of the things they printed untrue?"

"No outright lies," she said, "but the ads contained more puffery than a bag of cheese. They forecast enormous earnings and rapid growth as if they were a given." She harrumphed. I couldn't blame her. Nothing was a given in today's financial world. "The ads claimed the company had all sorts of big-dollar deals in the works and touted H2 as the next Microsoft. Laughable, given that H2 is a two-man operation with only a part-time administrative assistant, but I suppose you've got to admire their self-confidence. Their strategy worked, too."

"The investors sucked up the stock like it was cocaine and they were Lindsay Lohan?"

Sheila dipped her head in agreement. "The price went through the roof. Shortly after the public offering, when the market value was at its peak, the Hildebrands liquidated the majority of their holdings."

"And earned a pretty penny doing it."

"Lots and lots of pretty pennies." Sheila's mouth pursed in disapproval. "Pennies that they transferred immediately to a Swiss bank account."

So they'd moved their money out of the country, out of the reach of the U.S. government. Hmm...

"They've also applied for passports," Sheila added. "If their paperwork's in order, the passports will be issued in the next week or so."

In other words, we needed to move fast in case the brothers planned to flee the country.

The elevator bell dinged and the doors opened onto the twenty-ninth floor. Though I had changed a lot since leaving Martin and McGee, things here appeared the same. The reception area was painted a light gray with the firm's name posted in black block letters on the wall behind the receptionist's desk. Boxy, modern chairs in black leather and chrome were arranged around a large glass coffee table boasting a futuristic floral centerpiece of silver roses on black stems. Unexpectedly progressive decor for what was actually a very traditional firm, a clear sign they'd hired out the interior design work.

While Sheila spoke to the receptionist, I took the opportunity to check out the new artwork placed about the room. Martin and McGee provided pro bono tax services to a nonprofit arts organization that operated a gallery down the street. In return, the organization lent the firm an ever-changing assortment of pieces to decorate the lobby. The current assortment included an installation of seven black-and-white photographs that captured the construction of the Margaret Hunt Hill Bridge, a new architectural icon that spanned the Trinity River and connected East and West Dallas. The white bridge included a center arc with numerous cables stretching from the edges of the arc to the bridge below, like an enormous metal dream catcher.

"Can I get you two something?" the receptionist offered. "Coffee? Tea? Water?"

Both Sheila and I declined. Uncle Sam's employees were not permitted to accept anything of worth, even if the value was nominal. Didn't want to create even the slightest appearance of influence or bribery. I couldn't imagine an agent being convinced to throw a case in return for a cup of coffee, though, even if it was Martin and McGee's imported French roast.

Sheila and I took seats, and I asked her a few more questions about the case. I was curious why the Hildebrand brothers would sell off the majority interest in a company they'd worked hard to build.

"Good question," Sheila said. "I suspect they know something nobody else does."

"A dirty little secret?"

She nodded. "We've got a name for when an insider artificially inflates the stock value, then sells off his shares while the price is high. We call it a 'pump and dump' scheme."

An attractive man walked into the reception area of Martin and McGee just then, another schemer who had performed an entirely different kind of "pump and dump."

The thing he'd pumped and dumped was me.

DEATH, TAXES, AND A SEQUINED CLUTCH Copyright 2012 by Diane Kelly.