Tahoe Payback Page 22

  “What would you expect?” I asked.

  “Well a doctor’s daughter ought to look refined, with city clothes, and have an educated manner. But this woman dress more like me, a real tough broad. The only doctor’s-daughter aspect was her education.”

  “How could you tell that?”

  “Well, I’m not shy, as you probably guess. So I walk up and ask for her bona fides. Like, just how do we know she his daughter. Of course, that get her hackles up some. But after a bit, she quiet down, and we get to talkin’. And it turn out she’s some kind of Greek scholar, teaching about ancient philosophers at the university. She even quote them to me, like I could care.”

  “What was her name?”

  “Glenn. I didn’t think to ask the last name. I suppose it might have been Smith as she seemed a bit like me, not exactly the marrying type.”

  “Did you get her address?”

  “No. Once I get that she’s legit, I let her do her business with the realtor. There were some people looking a few days later. Pro’bly the place is sold by now.”

  “What did Glenn look like?”

  “Aside from the woodsman dress, a regular girl. Maybe a bit skinny. About my height, five-six or so. Shoulder-length brown hair all stringy and messy.”

  “Eye color?”

  “I don’t know. Dark, I think. So I guess brown.”

  “Is there anything else you remember about her? Anything that stands out?”

  “Not really. I liked her clothes. I liked her rough talk.”

  “How did that come out, her talking rough?”

  “It was just something she was angry about. She had picked up her old man’s mail, and in it was some mailer come-on for one of those do-gooder outfits. Send us your money. So Glenn waves this mailer in the air and say that her father got scammed by this outfit. She say he’d sent them thousands of dollars and then figured out it was all a cheat. Sorry, there’s a name for these companies, but I can’t remember it.”

  “Charities?”

  “Yeah, that’s it. Glenn was pretty hot under the collar when she saw that mailer. She said she blamed them for his death and that he probably only slipped off the ladder because he was preoccupied by how he’d gotten screwed.”

  “Do you remember what charity the mailer came from?”

  Judy shook her head. “No, I wasn’t that close. I could only see that it had a picture of a starving little boy and above it, a bunch of roses.”

  “Do you have any idea of how I’d find Glenn?”

  “I’d start with the taco city. Encinitas. Maybe the daughter will be in there someplace. And that’s no sixth sense. That’s just common sense.”

  “Thanks Judy. You’ve been a big help.”

  The woman flashed me a big grin of crooked, stained teeth.

  Spot and I went back to the Jeep.

  THIRTY-SIX

  A fter I let Spot into the back of the Jeep, I pulled out my phone and saw that I had no cell reception. So I drove back toward the town of Ukiah. When I found reception, I stopped in the parking lot of a supermarket.

  I called Sergeant Bains of El Dorado County. I got his voicemail.

  “Owen McKenna calling regarding the Fannette Island murder victim Dory Spatt. I’ve got a potential suspect name to check out. A woman named Glenn, spelling uncertain, last name uncertain but possibly Smith. She is the daughter of a Dr. Jack Smith who died in Ukiah in an accidental death that left him hanging by his ankles. His neighbor Judy met the daughter Glenn and learned that she was very angry about her father’s donations to the Red Roses of Hope Charity for Children, Dory Spatt’s scam charity. Agent Ramos has a little information on the doctor if you want to check in with him.”

  I next dialed Ramos, was put on hold, then put through.

  “I’m in Ukiah where I’ve been talking to Dr. Jack Smith’s neighbor. She told me he had a daughter named Glenn – last name uncertain – and that the daughter was angry about charities in general and the Red Roses of Hope charity specifically. I wondered if you can search your databases by the first name Glenn and see if anything turns up.”

  “Maybe. But you’ll probably have more luck with the Bureau of Investigation.”

  “The California BI?” I said just to be sure I was clear on his meaning.

  “Yes. The California Department of Justice has them tasked with financial fraud. They might even have someone who focuses on charity fraud.”

  “They’re out of Los Angeles, right?” I said.

  “Many of their resources, yes. Hold on and let me look in my computer.”

  So I waited for a long time in the Ukiah grocery store parking lot. Ramos came back on the line and said, “A woman named Jamie Johnsrud specializes in financial fraud. She’s at the BI’s Sacramento office. I’ll give you the address and phone.”

  “Ready,” I said.

  Ramos gave me the numbers.

  “Thanks much. I’ll be in touch.”

  I hung up and dialed the phone number.

  “Jamie Johnsrud,” she answered in a British accent. No secretary. No voicemail. And this personal service from a bureaucrat. Impressive.

  “Hi Jamie, my name is Owen McKenna. I’m a private investigator calling on a referral from FBI Agent Ramos up in Tahoe. We’ve had two murders that appear to be connected to scam charities. Agent Ramos said you and your department investigate these charities. I’m wondering if you would be available to talk.”

  “Will Agent Ramos vouch for you when I call him?”

  “Like I said, it was his idea that I contact you.”

  “Then we can make an appointment,” she said.

  “The thing is, I’m driving from Ukiah to South Lake Tahoe. That will take me through Sacramento in a little over two hours. Any chance that could work for you today?”

  “So you’re talking about tea time, three o’clock. Sure, come on in. Let me give you a security code to give the desk guard. They are time sensitive, so you would only have a thirty-minute window. You’ll also need your ID.”

  “Got it.”

  She read off some numbers and letters that looked like something a random number generator would produce. “Of course, the security code is dependent on my verification of your ID after we hang up. So if the guard doesn’t let you in, it’s because I called Ramos and he said or intimated that you were of questionable character.”

  “Got that, too. See you around three.”

  We hung up.

  THIRTY-SEVEN

  T he office building that contained the BI Office was four blocks from the capitol dome in Sacramento. I parked in a ramp and left Spot in the Jeep. With the parking ramp shade and multiple floors of heat-absorbing concrete above him, he’d stay cool enough to snooze without panting.

  The reception desk guard carefully entered my code in his computer, nodded as he saw the result, then let me pass.

  I found Jamie’s office number on the third floor down a narrow hallway with linoleum flooring that, despite regular sweeping with a janitor’s dust mop and sweeping compound, probably hadn’t been washed, waxed, or polished in 30 years. At least the bureaucrats weren’t wasting tax dollars on excessive maintenance.

  The door to the office I wanted was half-open, held in place by two big law books placed on each side of the door. I turned sideways and slipped through the narrow opening without bumping the door. On the other side of the door was a fan set on high and making a tremendous racket as it attempted to mitigate the high Central Valley heat that bakes Sacramento four months of the year.

  “Hello,” I said loudly enough to be heard above the fan. “I have an appointment with Jamie. Would that be you?”

  “No harm in opening the door farther,” a woman at a desk nearly shouted. She didn’t look up from her laptop and the two-inch-thick pile of papers next to it. She telegraphed a weary intelligence, a look I’d seen many times on bureaucrats’ faces after they’d put in ten or fifteen years at an often thankless job that they originally thought would come with p
sychological happiness from doing civic good.

  The woman typed another sentence, then looked up at me and shouted. “If you turn the fan down to the low setting, we can possibly hear each other talking.”

  I reached over and flipped the switch down two notches.

  “I’ve stopped asking maintenance to find a solution to the Attention Deficit Disorder that has afflicted our air conditioning,” the woman said. “So I brought in my own fan, and I sip ice water all day. But I also keep my ski sweater and coffee mug close for those rare moments when the machinery kicks up for a brief spell and the air ducts kick out a fog of frost.”

  “Maybe the temperature fluctuations are designed to keep you alert.” I said.

  “Or to torture me.” She stood up and reached out her hand. “I’m Jamie Johnsrud. You would be the man who called.”

  I shook her hand. “Owen McKenna. I’m a private investigator. I’m looking into the murder of a woman who appears to have been running a phony charity.”

  Her countenance changed from one of comfort to distaste.

  “Which is the greater challenge?” I said. “Preventing burns and frostbite or watching over the state’s charities?”

  “No contest. I would likely mutate to grow my own fur coat or develop some kind of internal metabolic cooling system before I could remedy the legal theft that is our charity system.”

  “At least you haven’t lost your sense of hyperbole,” I said, grinning.

  A severe look settled over the woman’s face, pulling the inner points of her eyebrows down and compressing her lips into a tight, thin line. “There is no hyperbole in that statement,” she said.

  I pointed to a folding metal chair that leaned up against the wall. “May I?”

  “Oh, of course. Sorry. You bring up the subject of charities and I lose all good grace. Sit down. And let me introduce you to a world that would turn Jesus, Santa Claus, and the Boy Scouts of America into the world’s biggest cynics.”

  I opened the folding chair, set it in front of her desk, and sat. “The charity business model is not one that pleases an idealistic civil servant,” I said.

  “The charity business model is largely a scam that, even with some of the best charities, puts more money into the pockets of people who run the charities than the pockets of those whom the charities claim to help.”

  “Is your condemnation universal, or are there charities that buck the trend and actually do good work?”

  “There are definitely some good ones. Although even most of them are businesses at their core, enriching the people who run them. And if you look closely at the numbers that these people publish to show how much they give to the needy, you usually find that their reporting is more creative than truthful.”

  “What about the big corporate approach?” I said. “Are the huge charities questionable, too?”

  “I won’t say that good large charities don’t exist. But sometimes they seem rare. And if you apply any reasonable standard of measurement like, say, that a majority of money raised should go to charity work, then they are extremely rare. Mind you, most charities claim that a large part of their operating income goes to good charitable efforts. But the reality is that their so-called operating income is a small part of their total revenue. Most of their revenue is siphoned off through a range of fundraising and other expenses. And even though those expenses are substantial, they often report zero fundraising expenses on their Nine-Ninety forms. They hide them in with program costs. It’s very shady. You mentioned investigating a woman who ran a phony charity.”

  “Yes,” I said.

  “Why do you call it phony?”

  “According to the woman’s brother and employee, the charity’s revenue of six million a year didn’t go to charity work. It went to her. She owned a for-profit fundraising company that she used to raise the money for the charity. Eighty-five percent of the money raised was paid to that company as a fee for the fundraising efforts. The remaining fifteen percent was what the charity had to work with. Yet the charity didn’t even put that fifteen percent to good cause. It was nearly all spent on salaries, vehicles, and office expenses.”

  “Very common,” Jamie said.

  “I also found out that she used accounting tricks to inflate the supposed value of what the charity provided. So even though her charity had official non-profit status and a board of directors, it was still a complete scam.”

  Jamie was nodding. “What’s the charity’s name?”

  “The Red Roses of Hope Charity for Children.”

  She typed on her keypad. Clicked her mouse. Stared at the screen. She looked bored as if she’d seen the same thing a thousand times. “You’ll be glad to know that the Red Roses of Hope is officially in good standing with the state of California.”

  “Lovely,” I said.

  “Typically, charities like these use mailers and online come-ons that include things like photos of starving children, checks and cash enclosed, and they often have names and addresses designed to look like government mailers or designed to be easily confused with well-known, respected charities.”

  I nodded.

  “They often use pictures of veterans with amputated limbs or old people with dementia. They also have warnings printed on the envelopes that say that interference with delivery of mail to the correct address is a federal crime.” Jamie sighed. “These are the charity equivalent of supermarket check-out magazines, selling trash stories and sensationalism. Lowest-common-denominator stuff. They prey on people who are generous and trusting and really want to help the people in those sad photographs. But nothing about it is earnest or sincere. Everything is about getting your money.”

  “Is this a common problem?” I asked. “Fraudulent charities?”

  “Yes. What makes it worse is that this is a really big business. Conservative estimates put it at a billion dollars a day. What giving Americans don’t realize is that these businesses are often not about charitable giving at all. People in the general public actually believe that charities are special, that they are all about helping the needy. As a result, the public gives enormous amounts, and charities bring in massive amounts of money.”

  “Aren’t there watchdog groups? People watching out for good ethics in this business?” I asked.

  Jamie made a loud guffaw. “Yes. But as with many areas of business, a lot of the charity watchdog groups are set up by charities.”

  “I don’t understand. How could charities run the very groups that are supposed to watch over them?” I felt like a naive schoolboy discovering vice and graft for the first time.

  Jamie shook her head. “I’m sorry to burst your bubble. Charities get together and create supposed watchdog groups that are designed to rate charities on a wide range of qualities. They design their groups so that they look independent. They put up elaborate websites, and they promote journalistic articles that promulgate their desires. But in the end, the watchdog group ends up giving the highest ratings to the charities that run the watchdog group.”

  “That is the essence of unethical,” I said.

  “Welcome to the real world, Mr. McKenna. It’s the same for organizations that rate car insurance, home builders and home repair companies, travel destinations, hospitals, doctors, and medical insurance. And, of course, the granddaddy of graft and dishonesty, politicians and political action committees. Most people know better than to take political news as fact-based. But charities? Many people out there still believe that when they receive an email that shows some poor soldier who was blown apart by a bomb in the Middle East, that if they send in a hundred bucks, they will make life better for that soldier. It could actually happen. But in my experience? More often than not, that hundred bucks goes toward a charity CEO’s monthly wine bill.”

  “In your opinion, how much of charity money collected actually goes to help the needy?”

  “I don’t know the answer to that. But I’m always surprised at the gulf between what they raise and what they pay out o
n charitable activities. What’s worse is that what gets reported as charitable giving is often inflated. And it’s all mostly legal.”

  “How can that be?,” I asked. “If I send money to some cancer charity, how can it be legal that the charity’s owner could pocket my donation and not give it to cancer research or victims?”

  “Because the law allows charities to hire a fundraising company and spend a great deal of money on that, maybe even most of the money they take in. The law allows the charity to claim salaries and benefits and a wide range of other expenses as necessary to their business. They then deduct all of these expenditures as a standard business expense and thus report only the small amount left over as Revenue Less Expenses on the Nine-Ninety form.”

  Jamie clicked her computer mouse and turned to face me.

  “Viewed from the perspective of the Nine Ninety filing, it looks like charities use a large portion of their operating income for charity work. But that so-called operating income is often much less than the gross revenue the charity brings in. Even with the best charities, almost always the majority of their money gets spent on so-called business expenses. If members of the generous public knew how little of their money ends up going to charity work, they would be appalled.”

  “What about transparency? What about openness? Shouldn’t a charity be required to tell donors exactly what portion of donated money goes to the needy?”

  “We have some laws and some rules about charity reporting. The law says that charities are not allowed to distribute money for private gain. But the reality isn’t that simple. Charities are allowed to spend their money on anything that can be claimed as an expense that supposedly helps the charity. So here’s my challenge to you. Find me any charity with paid employees that doesn’t spend most of its gross revenue on business expenses. Not net revenue. Not operating income. Gross. Pick the biggest, most famous charity names. Notice the claims on their brochures and websites. Then compare those numbers to their public Nine-Ninety filings. They often don’t match up.”