Chapter 13: Unwarranted Accusations

September 17, 1996, Chicago, Illinois

“So now what?” Deborah asked when the ‘Kitchen Cabinet’ gathered in my office on Tuesday morning.

I shrugged, “I really don’t know. The FBI isn’t going to tell us anything, and the media hasn’t been able to get anyone from Big Muddy to talk. Lisa WAS on vacation in California, and Alec talked to her, so I’m confident she isn’t involved.”

“Are you sure?” Eve asked. “She was out of town when everything went down and has what appears to be a perfect alibi.”

“Appears?” Elyse asked. “What makes you suspicious?”

“Gee, I don’t know,” Eve said. “Everything?”

“She has a point,” I replied. “But my gut tells me Lisa isn’t part of this. Could I be wrong? Sure. But I don’t think so. It doesn’t appear the FBI thinks so, because according to Alec, they didn’t even question her beyond ensuring she’d been at a friend’s house in Malibu.”

“Did anything happen at Spurgeon?” Kimmy asked.

“When I talked to Samantha late last night, nothing had changed. The two jokers are nowhere to be found, and there were no unauthorized transfers or any suspicious trading. Bo’s suggestion was that if those guys were messing around, it had to be with some other firm, and probably under assumed names or relatives’ names, and very likely offshore. Apparently, the SEC requires people who work for investment firms like Spurgeon to use only registered, monitored accounts.”

“I’m surprised information about how he escaped hasn’t leaked,” Charlie said. “I have to believe somebody who’s pretty low on the org chart at Big Muddy has to know.”

I wondered if Stan Jakes could find out, but I’d have to give him something in exchange. That seemed like a bad idea given the fact that the FBI and Illinois State Police appeared to be running around as if their hair was on fire. The last thing I needed to do was anything which might give some judge somewhere cause to revoke my immunity deal.

“Is there anything we need to worry about?” Elyse asked.

“I’d say the biggest risk would be time wasted cooperating with the government if they decide to look through all of NIKA’s and Steve’s financials,” Deborah said. “But those are squeaky clean, right?”

“The IRS learned their lesson with the audit several years ago,” Elyse said with a sly grin. “They found nothing except a single error which I made. It resulted in a $400 tax liability, which they probably spent $40,000 to find.”

“Oops,” Deborah laughed.

“Is there ANYTHING they could come at you with, Steve?” Charlie asked. “Anything at all?”

“They’d have to somehow get around the immunity deal we signed, and I haven’t done a thing which violates it. I believe they expected to be able to come at me because of the money that was supposed to go to charity, but nothing changed hands, and Matheson disappeared before the due date.”

“I’m no criminal procedures expert,” Deborah said, “but they would have to have some pretty hard evidence to be able to charge Steve with anything covered by the immunity agreement. He had Melanie Spencer review it and suggest changes, so I highly doubt there are any loopholes the government could legitimately use.”

“The key word there is ‘legitimately’,” I said. “They could certainly try to make my life difficult, but given that I’ve cooperated with them, and it was THEIR agents who screwed up, I can’t see what they could do without creating a bigger mess for themselves. I mean, can you imagine the field day the press would have when it came out I was the one who clued them in on the scheme and they tried to say I was in on it?”

“I take it you have notes from every meeting?” Deborah asked.

“What do you think I am around here, a fucking night watchman?” I grinned.

“I think I’d stay away from quotes from The Firm right about now,” she laughed.

“Did I forget to tell you the Moroltos have an appointment to see us this afternoon?”

“Hardy-har-har,” she replied, rolling her eyes.

My personal desk phone and my cell phone rang at nearly the same time. I nodded to Kimmy to get the desk phone and I answered my cell.

“Steve! It’s Stephanie. The FBI and US Marshals are here and have search AND arrest warrants!”

“What the ... for what and whom?”

Elyse waved to me.

“Hang on,” I said to my sister, then asked Elyse, “What?”

“The FBI and Marshals are here with search warrants and an arrest warrant!”

“For whom?”

“Eve.”

There was bedlam in the room.

“Squirt, I have to call you back. Are YOU being arrested?”

“No, Samantha is! I need you!”

“The Feds are here, too,” I replied. “I’ll have to call you back. Make sure Samantha says NOTHING. I need to get Melanie on the line. I need to go!”

I hung up and looked to Elyse.

“What do I tell Lucas?” she asked.

“That Deborah will be down in the lobby to review their warrants. Eve, I suggest you go to your office and wait. Call an attorney if you have one. I’ll call Melanie Spencer.”

“What the fuck?” she asked, sounding both annoyed and angry.

“I don’t know right now. Deborah, their warrants should be quashed because of the immunity agreement, which also covers NIKA. Let them know the search, even with the warrants, is illegal. Elyse, go with Deborah, please. Kimmy, stay with me. Charlie, please go with Eve. Go!”

Everyone quickly left the office except Kimmy. I dialed Melanie’s cell phone which went to voicemail. That didn’t surprise me, as she was usually in court during the morning. I hung up then dialed her office and was put through to Grace Smith. I quickly explained what I wanted and she said she’d come right over, but that Eve would have to go with the Marshals if they insisted. I thanked her and hung up.

“What do you need, Steve?” Kimmy asked.

“Call KS Shooting Sports and let Eve’s dad know. Then call Jamie and ask him, no, tell him, to come over right now. I’m going to call my dad.”

She went to her office and I dialed my dad’s number, a cell phone which he’d finally broken down and purchased.

“Dad, remember I told you last night that I was in the clear on the whole Noel Spurgeon thing?”

“I take it you aren’t?”

“The Feds are arresting Samantha and Eve Falvey. I don’t know what their game is just yet, but I’ve called Melanie’s office. One of the lawyers is coming here now, and Kimmy is calling Jamie. And Deborah is talking to the FBI Agents who are here serving a search warrant.”

“What are they looking for?”

“Hell if I know,” I replied. “I offered full access to our financial information and bank accounts for the asking. You know both NIKA and I have immunity.”

He was quiet for a moment.

“It’s you they’re after, Son. Your immunity deal means they can’t come after you directly. They’re going after Eve and Samantha to put pressure on you. I can’t imagine the probable cause they could have used for the search warrants given the immunity agreement Melanie reviewed. Yes, now that I’ve said that out loud, I’m sure they’re after you.”

“But I haven’t DONE anything!” I protested.

“I’d say they don’t believe it. And if those two agents you worked with screwed up as badly as it seems they did, anything they did or said will be suspect. Who signed the immunity deal?”

“The US Attorney and the State’s Attorney. It was both Federal and State. What’s your advice?”

“Check with Melanie or her partners, but if it were me? I’d call the Agent in Charge and ask him what he wants, then give it to him, if it’s within your power. If it isn’t, the lawyers will have to do their thing.”

“And the PR angle? This is going to hurt us.”

“Call your reporter friend. At this point, you have nothing to lose. Show him the agreement AND the warrants. Have him call the FBI, US Attorney, State’s Attorney, and the judge for comment.”

“The judge won’t comment.”

“No, but he or she might decide they had been played and quash the warrants. Then you get THAT into the press. You were assisting the FBI in preventing a prison break and when it happened, they tried to pin it on you, etc. And you’re going to sue for, I don’t know, call it a billion dollars. Call me back as soon as you know anything.”

“Will do. Thanks, Dad.”

I hung up, opened the file drawer and took out the immunity agreement, then walked out of the office. Kimmy was just hanging up the phone and I asked her to walk with me.

“Eve’s dad is on his way. Jamie will be here in ten minutes. He suggested we stall the agents with the immunity agreement. He has someone heading to the courthouse for an emergency hearing to quash the warrants.”

“Thanks.”

We went downstairs where Deborah was reviewing the warrants with three FBI Agents while two US Marshals stood a short distance away. I walked over to the Agents.

“Agent Johnson? I have a copy of an immunity agreement which covers both me and NIKA. The warrants are invalid and will be quashed within the hour by a Federal judge.”

“They’re valid, and presumptively so,” he replied.

I shook my head, “Whoever swore out the search warrant against NIKA perjured himself or herself, because you all knew about the immunity deal. So there is no presumption. Even I know that much.”

Deborah nodded, “Which is exactly what I’ve been saying. I really have nothing to say about the arrest warrant, unfortunately, but any search of these premises, or Steve’s house, car, or other property, is a violation of the immunity agreement and the result of perjury by whomever swore out the affidavit for the warrant application. If the application makes no mention of the immunity plea, then the FBI has opened itself up to effectively unlimited liability.”

“So you say, Counselor,” Agent Johnson replied.

“Agent Johnson,” I said. “You personally are aware of the immunity agreement. You saw it when I showed it to you yesterday. That means you, personally, know the search warrant is invalid. That means you, personally, will be liable if you knowingly violate my civil rights by trying to execute it. And that, sir, is a felony. I don’t have to be a lawyer to know that. Nor do I have to be a lawyer to know your career will be over and you’ll be lucky to stay out of prison. But I’ll make you a deal.”

“A deal?”

“Elyse will allow you to LOOK at our financial records, which I’ll remind you I offered yesterday. We wait until an attorney from Allen & Baker arrives here, along with a criminal defense attorney. And we wait to see if the warrants are quashed in an emergency hearing being held in the next few minutes.”

“I can’t make that decision.”

“Fine. Let’s get the Agent in Charge on the phone. We’ll talk to him. Until then, I have no problem if you post Marshals at the doors if you think that’s necessary.”

“And Eve Falvey?” he asked.

“Is in her office,” I replied then turned to Deborah, “Deborah, are there any grounds for her to object to the arrest warrant?”

“None that would keep her from being taken into custody,” she replied. “She’s not covered by the immunity agreement.”

Which was a grave error on my part, one for which I’d have to make serious amends.

Agent Johnson turned to the other agents, “Agent Moore, please take a Marshal up to Miss Falvey’s office and take her into custody. The other Marshal will stay here. Mr. Adams, there is one at the side door and one in the alley.”

I shrugged, “Do what you have to do, but let’s call your AIC and see what he has to say. Elyse, please go with the Agent and the Marshal. Remind Eve to say nothing!”

“On it!” she said.

I doubted anything would change, but the more time I could buy, the more likely Jamie’s firm could have the warrant quashed.

“Agent Johnson, is anyone going to my home?” I asked.

“Yes.”

“That’s covered under the same agreement. Nobody is home at the moment, and if you break down the doors with an invalid warrant obtained by perjury, that’s going to cost you, too. And not just the FBI, you personally.”

He looked over to the third agent who took out a cell phone and made a call.

“Let’s go in the conference room and call your AIC,” I said, motioning Deborah to follow us.

We went to the ‘Tretiak’ room and Agent Johnson dialed the office and asked for the AIC. He came on the line about a minute later.

“Agent Newsome,” I said, “I’ll cut to the chase. The search warrants appear to have been obtained by perjury and I believe I can prove that. I have an attorney at the Federal Building right now in an emergency hearing with a federal judge to quash them. I offered, yesterday, to cooperate, but someone decided to escalate. Well, I’m holding a document signed by the US Attorney and the State’s Attorney which gives both me and NIKA complete immunity in exchange for cooperation. I suggest you tell your agent not to execute the search warrants. If he does, you’re opening yourself to civil and criminal penalties.”

“Those warrants were issued by a Federal magistrate judge,” he replied.

“Oh, I see the signature. Did this judge know about the agreement that gave both me and NIKA complete immunity?”

“I didn’t sign the warrant application,” he replied.

“Convenient. Look, let’s not beat around the bush. What is it you want?”

“Noel Spurgeon.”

“Well, he’s not here. Or at my house. Or in my trunk. And neither I nor NIKA had anything to do with his disappearance. In fact, I brought the scheme to YOU before I even knew for sure what it was. You’re having Eve Falvey and Samantha Spurgeon arrested, and trying to execute illegal search warrants against me, as well as warrants against Spurgeon Capital. What is it you want?”

“We believe you have material information about the whereabouts of Noel Spurgeon.”

“I don’t. And the fact that you didn’t try to have a warrant sworn out for MY arrest, tells me you have no evidence. I’ve been cooperating with you guys for YEARS and you’re throwing it away because you screwed up. Let me ask you this, Agent Newsome - how will this look on the front page of the Tribune when the warrant application and the immunity agreement are published side-by-side? Along with a complete transcript of yesterday’s meeting where I offered full cooperation?”

“You can’t reveal details of the immunity agreement!”

“I’m happy to go before a jury and show you violated the agreement and the only way I could defend myself is by making it public. I doubt you’d keep your job. You might even end up in prison. But we can settle this simply. Have Agent Johnson wait until the emergency hearing is concluded. If I lose, you search to your heart’s content with the full knowledge that I will never, ever cooperate with the federal government under any circumstances. And that includes assisting you with our computer software, searches of any client firms, and so on. If the warrant is quashed or dismissed, I’ll provide exactly what I promised yesterday. All you have to do is wait less than an hour. What do you want to do?”

“Johnson?” Agent Newsome said.

“Yes?”

“Sit tight until I call the US Attorney. Do not allow anything to be removed from the building. Mr. Adams, what number should I call?”

“The main number for NIKA; Lucas will put you right through.”

There was a knock at the door and when it opened, Jamie stuck his head in.

“I want to talk to you privately, please,” he said to me.

“I’ll step out,” Agent Johnson said.

“Deborah, please stay,” I said.

Agent Johnson left and shut the door behind him.

“I’m stalling,” I replied. “But I can’t stall them on arresting Eve.”

“That’s going to have to play out. So will arresting Samantha and searching at Spurgeon. Here, they are on extremely shaky ground and they know it. It’s intimidation, pure and simple.”

“You’ll get the warrant quashed?”

“Easily. They can reapply, but they’ll have to actually survive an evidentiary hearing. Melanie will handle that for you, obviously.”

“Grace should be here any second now. Melanie is in court as she usually is on Tuesday mornings.”

“Deborah,” Jamie asked, “what did the search warrant say?”

“They want to review all business records for evidence of conspiracy to aid and abet the escape of Noel Spurgeon from prison, as well as conspiracy to aid and abet interstate and international flight of a wanted fugitive from the law. May I give my non-expert opinion?”

“Sure,” I replied.

“That actually might have some legs, at least as I understand how this works. They have a colorable argument that Eve participated in some kind of conspiracy, and because she works here, what she did removes the immunity for NIKA. BUT, and here’s the key, if they didn’t tell the judge about the immunity, he’s going to be pissed because you’re entitled to a hearing unless there are exigent circumstances. Normally, the government will win those, but in THIS case, because you offered cooperation, including access to your files, they’ll lose. How did I do, Jamie?”

He nodded, “I’d say your analysis is worthy of an A on an exam paper. How this plays out in real life will come down to whether or not the US Attorney can convince the judge that Eve’s actions are sufficient to waive NIKA’s immunity. On the exigent circumstances, the government nearly always wins. In this case, they might not. In the end, we’ll get the warrant quashed. If the US Attorney wants to reapply, there will be an adversarial hearing about the application.

“That adversarial hearing, a ‘Franks Hearing’, based on a case in Delaware about twenty years ago, gives you the right to challenge a facially sufficient warrant application and gain an evidentiary hearing. Usually, it’s done after the search, because warrants are nearly always issued simply on application by law enforcement. But this case has special circumstances because of the agreement. And you’ve managed to stall long enough we might stop it before it’s actually executed.