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

Gershman aside again. “Listen, we’re doing something with the Darr matter,” he said. “Stay away from it.” Gershman took it as a friendly tip. He never spoke to Darr again.
    Even Jacobi, the lawyer from First Eastern, could tell the man was coming apart. Using an assumed name, Darr called Jacobi once at the office and asked for his home number. Then, almost every night, Darr called Jacobi, sometimes in tears, asking the lawyer to figure a way out of the problem. “Please help me, Herb,” Darr begged repeatedly.
    Jacobi would never know why he did it. He didn’t like Darr. He fully believed the only reason Darr called him was to get legal advice without having to pay for it. But the desperate nightly pleadings finally got to him. He told Darr how to resolve his problem: On his next day at work, Darr should go to the cashier’s office and write Josephthal a check for some of the client money, saying that he was turning over a fee he earned from First Eastern. He should make sure to mark the check as being for that fee. Turning over some of the money, Jacobi said, would give Josephthal an explanation for the payment in any future litigation and would guarantee that the firm could never turn against Darr. How could they call the money a payoff if they accepted some of it?
    On July 17, Darr followed the advice. He wrote a check for $30,000 to Josephthal, saying he was turning over a fee. Then, since he had generated the money, Darr demanded $15,000 back as a finder’s fee, and got it. The threat of huge lawsuits for both Josephthal and Darr was effectively eliminated.
    Jacobi’s advice only solved Darr’s potential legal problems; his career was still tenuous. On his days away from Josephthal, Darr hunted for a new job. But he was not looking much for a position on Wall Street—instead, he tried to sell his own tax shelters. He spoke with people he knew in the business, bouncing around possible ideas for an oil deal. He called Jerry Leach, an old colleague from Merrill who now ran the tax shelter division at Smith Barney, Harris Upham & Company.
    The two men met for lunch at a restaurant near Wall Street. After a few pleasantries, Darr told Leach that he had gotten together with some associates in the energy business and was putting together a tax shelter with them. Darr would be one of the general partners on the deal. Did Leach think that Smith Barney might be interested in selling the deal?
    Leach smiled politely. No, Smith Barney would not be interested in participating in any such deal.
With you
, he thought.
    Leach already knew about Darr being caught taking money. The rumors he heard from a buddy at Merrill were that Josephthal essentially had dismissed Darr but was keeping him on staff while he tried to find a new job. That was enough to make Darr radioactive in his eyes. Leach wanted the general partners in his firm’s deals to be squeaky clean; there was no way he would do business with Darr. The lunch ended amicably, but with Darr empty-handed.
    Darr’s meeting with Anton Rice III, another Merrill alumnus, did not go much better. Rice, known to everyone as Tony, had been somewhat of a success off Wall Street—since leaving Merrill, he had plunged headlong into the energy business and was now a senior officer with Graham Resources, a Louisiana oil company. Like Darr, Rice knew the pains of being accused of improprieties. After Rice had left Merrill, executives from the firm investigated allegations that he had held a financial interest in some of the land he helped arrange for sale to various Merrill partnerships. In other words, the deals for public investors might have been benefiting him personally. But after questioning executives, Merrill dropped the investigation.
    At the lunch, Darr told Rice that he and a friend wanted to take over as the master salesmen for all of the Graham energy partnerships. Graham would pay them to travel the country and