Read Online Serpent on the Rock by Kurt Eichenwald - Free Book Online

checking account number 2551. The remaining $5,000 was deposited in his savings account. In just one transaction, Darr more than doubled the $30,000 he had in the bank.
    Darr had been in his job as head of Josephthal’s tax shelter department for just over six months. His new firm was no Merrill Lynch—instead of hundreds of offices around the country, it had only about twenty along the East Coast. Until it hired Darr, Josephthal did not even have a tax shelter department. Even his pay was meager by Wall Street standards: about $65,000 a year, plus bonus. But at Josephthal, he was the person in control. He could decide which deals were sold and how much the firm would be paid. Promoters who wanted to sell their shelters through Josephthal had to make sure that Darr was happy.
    About a week before receiving his payment from Trupin, Darr took steps that would protect him in case anyone ever heard of the check. At a lunch with Michael DeMarco, the president of Josephthal, Darr tiptoed around the topic of money he expected to be receiving. He had outside business interests, Darr told DeMarco, and would soon be getting income from them. But DeMarco need not worry, he said, because none of those activities conflicted with the interests or businesses of the firm. But in fact, the opposite was true—he was receiving cash from the very types of people whose deals he was supposed to rule on objectively.
    The flow of money to Darr soon sped up. Matthew Antell from First Eastern was the next client to pass some cash to Darr. Josephthal sold a limited partnership for First Eastern called King’s Court Associates, and three days before the deal was filed with securities regulators, Darr sent Antell a bill for $30,000. The bill did not indicate it was from Josephthal and simply said that First Eastern owed the money for “specialized program structuring and consultation.”
    A few days later, on March 6, Antell sat down at his desk in Cohasset, Massachusetts, to write a series of $30,000 checks from First Eastern Corporation. After funneling one check through another company he controlled, he wrote a second check, to Rothchild Reserve, the company controlled by Barry Trupin. Antell had never met Trupin.
    The check was mailed to Trupin, who deposited it in his account at Citibank. On March 22, after Antell’s check cleared, Trupin wrote the fourth $30,000 check in the series, this time to the true recipient, Jim Darr.
    Darr was ready to use the money. After starting in New York in a modest apartment in a middle-class neighborhood, Darr had his eye on a $181,500 house in the wealthy suburb of Stamford, Connecticut. Four weeks after receiving his latest check, Darr handed over a down payment of $35,000 in cash for the house. Without the money from clients, he never could have afforded it.
    Darr’s newfound power and healthy financial shape showed in his strut. He became looser and more arrogant, at times embarrassing some of his professional staff by mistreating potential clients. Stuart Ober, who handled oil and gas deals, bitterly complained to colleagues after he brought one potential shelter promoter into the office to see Darr. Ober liked the promoter and wanted to make a good impression. But Darr treated the client with open contempt. Sitting behind his desk, Darr put his feet up on the table in front of the prospective client’s face, lit up a cigar, and leaned back in his chair.
    â€œTell me about your deal,” he said. “
I’ll
decide whether it’s good or bad.”
    The client was clearly offended. Within minutes, Darr cut him off and ushered him out. Ober had never seen a performance like that in his life. The client took his business elsewhere.
    Darr’s antics also made some of his bosses uncomfortable. He was simply too out of step with the collegial atmosphere of a small, old-line firm. He created a huge, separate office for himself, while the heads of most other departments