In late afternoon, Kat exited the elevator and entered Edgewater’s plush, quiet offices. The receptionist buzzed Zachary and motioned Kat to an overstuffed chair in the waiting area. Zachary wasn’t expecting her, but the revelation on the auditors demanded immediate attention.
If Beecham didn’t exist, then Edgewater’s financial statements hadn’t been independently audited. Purposeful deception meant only one thing: bogus financial results. Someone was hiding something. She grabbed her cell phone and punched in Jace’s number. She left a message, asking him to do a background check on Beecham.
Ten minutes later, Zachary greeted her at reception and ushered her into his spacious office. He pushed a stack of papers to the side of his desk and motioned to sit down. Kat filled him in on Beecham’s fictitious address and her suspicions.
“That’s impossible. The regulators require us to have audited statements. Not to mention our clients. They wouldn’t invest in unaudited funds.” Zachary shook his head.
“Did you ever meet with the auditors? Check them out?”
“Never had to. Like I said, Nathan handled the back-office side.”
“But you said your trading model was complicated. The auditors would need to understand it in order to audit Edgewater. Who explained it to them? Nathan?”
Realization dawned. Suddenly Zachary focused laser-like on Kat.
“Nathan never came back to me about it. And he’s used Beecham for years, even before I came onboard.” He slumped forward and rested his forehead in his hands. “This can’t be happening.”
“Well, it is. Unless Beecham operates from a vacant lot.”
“Maybe they moved?” Zachary wiped a thin sheen of sweat from his forehead.
Kat raised her eyebrows. “Beecham probably doesn’t even exist. I’ve got someone checking on that right now.”
“But the auditor’s signature is on the statements. You’re telling me that was faked?”
“Anyone can cut and paste a signature. Edgewater’s year-end was a few months ago. Weren’t there any auditors in the office?” Auditors normally worked in their clients’ offices for part of the year-end audit. For a company of Edgewater’s size, the fieldwork would last at least a few weeks.
“Not that I remember. We don’t get many visitors, not even auditors. Back-office stuff isn’t exactly my strong suit, but still—how could this happen right under my eyes?” He pounded his fist against the desk as he stood. “How could I be so stupid?”
“It might seem obvious in hindsight. But until you ran short on cash, you had no reason to question anything.” Just like Uncle Harry and his loans.
Even Zachary looked small as he paced back and forth against the backdrop of the large windows. “I’ve got to stop this thing. What’s next?” His shoulders hunched forward in defeat.
“Think of why the financial statements were faked. I’ll reconstruct the results from your financial system to see what the real numbers are.”
“The real numbers?” He stopped abruptly and stared.
“If the financial statements are faked, you can be sure the actual numbers are different. I’m guessing not in a good way. I need complete access to your books and records. We’ll work at night while your staff is gone.” As if she had other staff to help. Reconstructing the financials could be hugely time-consuming. Maybe Jace could pitch in.
Zachary’s forehead creased. “Holy crap. No wonder Edgewater has no money. I’ll call my lawyer, get a court order. Freeze the bank accounts and the funds.”
“Zachary, that would be my first reaction too, but—”
“Don’t tell me to wait and see. I’ve got to shut him down.” Zachary headed for his office door, cell phone in hand.
“Okay, call your lawyer. But he’ll want proof too. Something Nathan can’t explain away. Especially if you want any charges to stick.”
“That could take days. In the meantime, Edgewater gets plundered?” Zachary turned abruptly and faced Kat. “Can’t afford it. We’ll go with whatever you dig up by Monday.”
“Monday? ” Friday was almost over. Considering Zachary’s entire future rested on her investigation, a few days was ridiculous. “I need a week or two minimum just to reconstruct the financials. Edgewater is a multi-billion dollar company.”
“Monday.” Zachary exited into the hall before she had a chance to answer.