The Matter of the Dematerializing Armored Car Read online

  Third, and most important, the greatest danger was putting yourself on a financial investigator’s radar. As long as a bankster stayed reasonably legal and did not get greedy, the bankster would be left alone. Annual audits were a laugh whether they were federal or state. Internal examinations were simply a rubberstamp for the annual report.

  These three pitfalls being exposed, there was a rather delicious upside to the downside. If you were clever and dexterous, you could use the downside to your advantage. This was neither a hybrid of the old saw of “rules are made to be broken” nor a flaw in the regulatory fabric. It was simply a matter of being in the right place at the right time and knowing you were in the right place at the right time.

  Then there was Caerus.

  Caerus was the Greek god of opportunity, luck, and good fortune. For very good reason, he is a young man with wings on his back and heels. He and opportunity are fleeting. He is often depicted carrying a balance scale cementing the solid link between the god and the real world. What made Caerus prophetic was a single lengthy lock of hair extending from his forehead. He was the god of opportunity, luck, and good fortune but—and this was a rather substantial but—you were only going to get one chance to snag good fortune as Caerus came zooming by. You were only going to get one chance—uno, un, eins, ett, unus, odin, yksi—to grab the single lock of hair. One and only one. So being in the right place at the right time was not enough. You had to seize the lock of hair before Caerus disappeared into the proverbial mist of time.

  Caerus flew by Curtis Jackson, president of the First Sandersonville Bank of Trust, in the form of a disreputable individual: a brother-in-law. Curtis Jackson was no fool; he snatched the hair-lock.

  The Jackson family, quite extended, were banksters, whose roots on the North Carolina coastline extended back to the first shipwreck survivors in the sixteen hundreds. As the Jackson family always said with prophetic humor, “If you were the first on the coast, all the land was free—and we were the first.” The Lumbee Indians were first on the coast, of course, but over the centuries, the Jacksons married into the tribe, stole from the tribe, or simply waited for them to die off depending on which version of North Carolina history one cared to read.

  The Jacksons had been coastal hillbillies, so to speak, until the 1920s when they discovered a new enterprise: banking. Rather, they stumbled into it. With cash oozing out of every pore of the body politic of the nouveau riche of the middle and northern east coast of Yankeedom, the Jackson family ensemble moved into the tourist trade. They opened small hotels where the proprietors were blind to the transgressions of their patrons. The family also had the local connections to make sure none of the transgressions of their renters resulted in paperwork, such as police reports or stories in local newspapers. Since the local newspapers and police departments were operated, owned, or opined by extended Jackson family members, what happened on the coastline of North Carolina and the Outer Banks stayed on the coastline of North Carolina and the Outer Banks.

  From there the family moved into tourist gewgaws and novelty products. It did not take the family long to realize it had a cash problem. This was because of the unique character of an East Coast vacation. On the West Coast in the same time period, and to this day, a “vacation” is a single week. Two weeks, if you were lucky. But on the East Coast, one went on “holiday.” Not “a holiday” but “holiday.” It was singular and usually lasted six weeks. East Coasters “on holiday” came to the coastline of North Carolina and Outer Banks and stayed a month and a half. Every day of the month and a half, they ate, drank, lounged on the beach with beer (even though it was illegal in the early days of the tourism boom), and bought all manner of tourist products. It would not be until the next century before such commercial transactions would be primarily electronic. But for eighty years, the coastline of North Carolina and the Outer Banks ran on cash.

  Thus did the Jackson family get into banking. The extended family took in extraordinary amounts of cash from the tourists but did not trust banks not owned by relatives. This was perfectly reasonable because, by the late 1920s, banks were going under faster than flocks of seagulls diving for baitfish. So the Jackson family opened its own banks, eventually six of them between Moorehead City and Corolla and inland as far as Vanceboro and Plymouth. Every one of the banks survived the Bank Holiday of 1933 and quickly became members of the FDIC.

  Seventy years later the banks were still in business—not that banks ever go out of business. They are like casinos. If you cannot make a profit from a bank or a casino, you should get a job as a bureaucrat. But what made these banks so unusual was the excessive amounts of cash they had to keep on hand. The “holiday” trade was almost exclusively cash. This meant every beach business was depositing cash in the banks every night, from Memorial Day to Labor Day. But this cash could not be stored in the banks. First, because it was in small bills—mostly five dollars, ten dollars, and twenty dollars—which took up a lot of space. Second, while businesses did not need much cash Monday through Thursday, a lot of cash was needed during the balance of week. Then there was the Fourth of July, craft shows, traveling troubadours, and the state-operated hard-liquor stores. Banks needed the cash on hand—but not in their hand. So the banks began storing their excess cash with the Swensen Armored Car Company in Sandersonville.

  This turned out to be a fortuitous turn of fortune. While it was a matter of convenience in the 1940s and 1950s, by the 1960s there had been a glacial change in the world of money: checks followed by credit cards—and then debit cards. In the 1940s and 1950s, everything had been cash-and-carry. By the 1960s, more and more people were paying with checks and credit cards. This reduced the amount of cash that tourist businesses had to have on hand, but it increased the risk of bad financial instruments. The coastal businesses were still demanding cash, but the larger purchases, such as housing rentals, could be done with a check or credit card because the tourist had to pay in advance. Then, as technology progressed, the financial instruments could be verified within seconds. Debit charges cleared instantly. There was no longer a need for American Express Traveler’s Checks—“Don’t leave home without them!”—and checks or, for that matter, cash. Then came the cell phone and the SquareUp. Yes, a certain amount of cash was still needed, but not as much as before.

  But the collective banks still had millions in cash sitting in storage at the Swensen Armored Car Company vault.

  This, however, was not a bad thing. This was because money—as in cash—was imaginary in the banking world. Cash does not exist. As an example, if you have $1,000 in your checking account, and you go to the bank to see your $1,000, the bank will laugh at you. Your $1,000 does not exist. Not even on paper. The only paper on which your $1,000 exists is your monthly statement. The rest of the time, your alleged $1,000 is an electronic pulse. But even though it is imaginary, you can still take a piece of plastic that is not linked with a wire to your bank and use that piece of plastic to buy things that do exist: apples, ground round, coffee, beer, and bananas. To buy those things that do exist, you do not even need pieces of paper identified as five-dollar, ten-dollar, fifty-dollar, or one-hundred-dollar bills.

  But this is just the chicken-feed end of the banking system. Taking a step deeper into the reality of banking, suppose Business A delivers its weekend receipts, $10,000 in cash, to the bank on Monday morning. Instantaneously the $10,000 is in Business A’s account. Business A now has $10,000 more than it had Friday at the close of banking hours. On Monday morning, the bank has $10,000 more money in its asset base. Because of the added $10,000 in its asset base, the bank can now legally lend out ten times the amount in loans. So the $10,000 in cash from Business A deposited at 9:00 a.m. is magically transformed to $100,000, which can be loaned out at one nanosecond after the 9:00 a.m. deposit from Business A.

  But there was an added twist. Only $10,000 in cash came in, but $110,000 was created: the $10,000 in Business A’s account and the $100,000 the bank can lend out. Suddenly the ca
sh has no value. Business A is not going to ask for its $10,000 in cash back. And when the bank loaned out the $100,000, the loan is not going to be made in cash. It will be on a piece of paper linked to the banking system. No actual cash was transferred. Further, the $10,000 in cash coming in has no value. It was just paper sitting in the bank’s vault.

  Since the bank had more important use for the space in its vault than storage of one dollar, five dollar, ten dollar, twenty dollar, fifty dollar, and one hundred dollar bills, it made business sense to store the cash that would reasonably be needed quickly in a convenient location. On the coast of North Carolina, that convenient location was in Sandersonville, the heart of the tourism trade, in the vault of the Swensen Armored Car Company.

  The only increasing value of the actual cash was the amount the Swensen Armored Car Company was charging for the monthly service to warehouse the cash. But the monthly fee saved the banks from warehousing stacks of boxes of five dollars, ten dollars, and twenty dollars in its own vault, a fireproof vault better suited for storing original loan documents. Besides, the actual value of the money had already been incorporated into the bank’s legal assets. The bank was lending out ten times the amount of the cash taken in—in whatever form the cash was and wherever the cash happened to be.

  None of this was a problem in the sense the Jackson collection of banks wanted to change the system. The growing collection of actual dollars was a paperwork nuisance, not a financial problem. But, as it turned out, it could be one shaft of a three-legged financial bonanza for the banks.

  The second leg came courtesy of Caerus.

  Two of Curtis Jackson’s ne’er-do-well collaterals were working as drivers for the Swensen Armored Car Company. They were castoffs of a Jackson faction that was invested heavily in real estate because their land was on the Pamlico Sound side of the Outer Banks. Beachfront property on the Atlantic side of the Outer Banks was at a premium because it was, after all, beachfront. But because of hurricanes, global warming, and the blast of Atlantic storms, beachfront homes on the Atlantic side were often destroyed.

  Which was why long-term residents of the Outer Banks built their homes on the Pamlico Sound side of the islands. The power of the hurricanes and Atlantic storms dissipated before reaching the other side of the string of islands. The tides were much less severe on the Sound side, and there were wetlands to break the power of the waves. Structures on the Sound side survived for generations, while those on the Atlantic shore had a significantly shorter shelf life.

  By 2010, the beachfront on the Atlantic side of the Outer Banks was shoulder-to-shoulder-to-shoulder homes, which were hostages of every weather system between the Bahamas and New Jersey. The homes were built right to the edge of the National Park, and then there was no more beachfront room. Thereafter, courtesy of the law of supply and demand, weekly rental rents went up. As the national economy got better, more East Coasters went “on holiday” and the rates went up again.

  When the rates got high enough, cruise lines began looking at the Outer Banks as a prime interim location for luxury hotels. Travelers could board a cruise liner in New York and leisurely proceed down the coast to Virginia Beach where they would be put on buses for Corolla, Duck, Sandersonville, Frisco, Hatteras, and Ocracoke for two or three days of beachcombing, deep-sea fishing, and historic tours of the shoreline where Blackbeard died, and ghosts of pirates still haunt the inlets and bights. Or, since many of the tourists were elderly, three days in the solitude of the Outer Banks.

  But none of the cruise lines were willing to build on the Atlantic seacoast. The cost was too high and the risk too great. So, very quietly, the cruise lines began looking to invest in Pamlico Sound side property.

  It may have been quiet from the point of view of the cruise lines, but the residents of the Outer Banks were not stupid. They knew low-level inquiries were going on. They could also read the tea leaves. So they went the cruise lines one better. Rather than have neighbor compete with neighbor for the lowest property sales price, they formed loose collectives and offered the cruise lines blocks of land for a reasonable price. After the infighting ceased, there were four competing collectives, all vying for the attention of the cruise lines, with none of them large enough for a luxury hotel complete with parking, dining facilities, docking area, and so on. And none of the collectives was willing to wheel and deal with the others. Further, no collective was going to take credit or a long-term lease. This was going to have to be a cash-and-carry sale with one hefty price tag.

  So there the deal of a century sat with no collective large enough to profit. The only solution was for some entity other than a cruise line to buy all properties at the same time and then negotiate for a good price from the cruise industry.

  But the clock was ticking.

  If the cruise companies—in the singular or multiple—did not find a land deal in Sandersonville, well, then it was up or down the coast for another option.

  Curtis Jackson knew an opportunity when he saw one.

  He also knew the clock was ticking.

  All he had to do was find one buyer who had $10 million in cash to buy out all the collectives at the same time. Then his bank could negotiate a substantially higher price for the land as well as keep an oar in the water for construction loans, long-term mortgages, ongoing maintenance accounts, and every other fiscal angle he could finagle.

  As he was contemplating the sad state of affairs of a massive lucrative deal just beyond his financial fingertips, two ne’er-dowell Jacksons, Charlie and Harry, introduced him to the man of his fiscal dreams. Even better, this man wanted to buy out the collectives with cash.

  Ten million dollars in a single transaction.

  That man was Joseph Richiamo.

  But there was a problem.

  Chapter 5

  In Noonan’s eyes, the Swensen Armored Car Company was exactly what it appeared to be: a high-security garage. Noonan was expected, but it didn’t stop the guard at the front gate from looking over his badge and making a photocopy of his ID card.

  “We can’t be too careful these days,” the guard said as he handed Noonan back his badge case. “Today in particular.”

  “I know what you mean,” replied Noonan as he slipped his ID case back into his pocket. He looked around the open yard of the Armored Car Company garage. The lot was empty.

  “Is it usually this empty?” Noonan asked.

  The guard looked up in surprise. “Sorry. Most people just get their IDs checked and wander inside. Is it usually this quiet? Yeah, sort of. We don’t have a lot of milling around here. The armored cars are in the garage,” the guard pointed to the large, warehouse-like structure, “and they get loaded there. Once the armored cars come out of the garage, they go right out the gate. We, the guards, do not check armored cars on their way in. That’s done in the garage. By the vault. We just log them on the way out. Most of the time they are empty. We don’t check the inside of the armoreds coming in either. We just make sure they get into the garage. When they get into the garage, that’s when the security really kicks in.”

  “What do you mean by ‘kicks in’?” Noonan asked.

  “Well, when there’s money, well, you know what I mean. We have to be a lot more careful who comes and goes.”

  “So you check IDs on the way in?”

  “If we don’t know you by face, yes, sir.”

  “How about cars driven by the guards? Do they get checked?”

  “No one parks in here,” the guard said, waving his arms around the yard. “They park on the other side of the fence over there.” He pointed to a distant point on the cyclone fence topped with razor wire. “Then they walk in.”

  “Is everyone searched coming out?”

  “Not searched as in patted down, no. But no one who works here comes in with a pack or a briefcase because he or she can’t leave carrying anything. The only vehicles going out these gates without being searched are armored cars.”

  “And motorcycles.”

>   “Yeah, and motorcycles. As long as you don’t mean anything piled on a motorcycle. If something is on a motorcycle, like a large bag, we’d search it.”

  “How often has that happened?”

  “Twice since I’ve been here.”

  “How long have you been working here?”

  “Fifteen years.”

  “What was in the bags you searched?”

  “Laundry. Both times. Uniforms going out to be washed.”

  “They, the bags, were escorted out?”

  “No. The uniforms were in bags on the back of a motorcycle. There was no armored car, just the motorcycle. But rules are rules, so I checked the bags.”

  “When the armored cars leave here, do you know where they are going?”

  “Sort of.” The guard smiled. “The cops already asked me.” He looked at Noonan suspiciously for a moment. “You’re a cop, right? I’ve already been asked that.”

  Noonan smiled. “I’m not that kind of a cop. I look into unusual cases. Like this one. I’m not looking for money, just answers.” The answer did not seem to satisfy the guard, so Noonan plowed forward in a different direction. “OK, let’s try this another way. Generally speaking—and I don’t know your business, so I’m just guessing—armored cars leave here for three purposes. First, to drive around and pick up deposits from businesses. Second, to deliver those deposits to banks. Third, to move things of value that aren’t necessarily going from a business to a bank. Maybe like a valuable painting or a special delivery of gems.”