Matt walked into FBI headquarters at seven o’clock Thursday morning, greeted by both Brian Granderson and Sloane Wagner.
Brian had pulled the plug on their undercover investigation even though Sloane had only found part of what they had been looking for. But in light of Thornton’s murder and Chavez’s suspicious behavior, he wanted to now be straightforward with his internal review. After Sloane uncovered evidence that Rebecca Chavez’s computer had accessed the LAPD portal the night before the raid on Chen’s factory, Granderson’s approach was best.
While they didn’t have solid proof that Chavez had been the one to leak info about the raid, they had enough to question her. Coupled with the information about her son, Jonathan Avila, and his grant program being under investigation by the DA’s office, they would push hard and hope something shook loose. In the meantime, she would likely be suspended while they looked into her actions.
Brian led Matt and Sloane to a secure room where a video conference was set up. To keep leaks and gossip to a minimum, only Vik Mehta from IT was in the room to handle the equipment. Vik looked a little nervous, but Sloane gave him a warm smile and thanked him for coming in so early.
Brian said, “We appreciate your diligence and confidence in this matter.”
“Yeah, of course, anything you need, Mr. Granderson, sir.” He cleared his throat. “I have Assistant Director Greer, Special Agent Heller, and FBI Analyst Ryder Kim on a video call.”
“Bring them on, thank you.”
Once they had realized there was a possible white-collar crime and public corruption case at the root of Craig Dyson’s murder, Matt had brought in Zack Heller. Zack was a genius when it came to tracing money and uncovering financial crimes. While Matt found him annoying and difficult to work with, there was no doubt of his brilliance.
A moment later, the large wall screen was split between the three men on their respective computers.
“I’ve read your report, Matt, and I talked to Brian this morning,” Tony said without preamble. “What approach have you decided with ASAC Rebecca Chavez?”
“She’ll be brought directly to my office when she arrives this morning,” Brian said, “and Matt and I will interview her. Unless she makes a startling confession, I intend to suspend her with pay and refer the matter to OPR.”
“Make sure Chavez understands that she must make herself available for questioning,” Tony said. “Not only by our department, but LAPD. She can and should have a representative during any LAPD interview.”
“Of course,” Brian said. “Also, we confirmed that the ballistics match in the Chen homicide and murder of ASAC Bryce Thornton. The report arrived early this morning, and Matt and I discussed the implications as he drove in.”
“What is your take?” Tony asked. “That Officer Colangelo lied about giving the gun back to the man he calls Conrad?”
“No, sir,” Matt said. “He seemed relieved to share and there was no sign of deception. We haven’t disproven anything he told us, and what we could prove shows he told the truth. Detective Quinn observed the interview from another room, and she has advanced training in interrogation. She concurs with my assessment.”
“I’m aware of Detective Quinn’s credentials, Matt. And what’s the status of her missing firearm?”
Brian straightened. Matt hadn’t told him that Kara was missing one of her personal weapons, though he had informed Tony as soon as Michael confirmed.
“LAPD sent over a crime scene tech to go over Kara’s condo. She indicated that one of her personal firearms, a Colt .45, was missing from a secure lockbox she kept in her bedroom. She has no knowledge of when it went missing. She went on record that the last time she saw the weapon was when she left in March of this year. She hasn’t been to the condo since. Agent Harris interviewed her neighbor, who had nothing to add, and a detective is following up with others and checking building security.”
“Keep me informed.”
Matt said to Brian, “I intended to tell you as soon as we had the theft confirmed.”
“You can see why this looks bad,” Brian said.
“Yes,” Matt said, “but Kara didn’t kill Chen or hire his killer. This is a setup.”
“With all due respect,” Brian said, “we need to follow the evidence. She shouldn’t be anywhere near this investigation.”
“Brian,” Tony said, “you and I will discuss this later. I understand your concerns, and we’ll address all of them. For now, let’s focus on identifying Conrad. Matt, Kara believes that the sketch matches the man she saw kill Craig Dyson?”
“She won’t swear under oath as she’s not one hundred percent positive, but his key features match. Colangelo believes that Conrad retrieved the gun between twelve thirty and when he left work at six. Colangelo parks in the structure next to LAPD main headquarters. There are security cameras at the entrances and exits. Detectives Caprese and McPherson have partnered and are in the process of reviewing the footage. We have a good description of Conrad and we may be able to identify his vehicle, if he drove in. If he walked in, we can confirm Colangelo’s statement and possibly get a better image of our suspect.”
“If the statement is accurate,” Brian said, “it means that either Conrad gave the gun to someone else to kill Agent Thornton, or he killed my agent.”
“Brian, do you believe that ASAC Chavez has any culpability in Thornton’s murder?” Tony asked.
The question carried a lot of weight, and Brian took a second before he answered.
“She has already stated that he contacted her at two forty-five Wednesday morning and informed her that he would be meeting with an informant regarding evidence that Quinn may have ordered the hit on Chen. She ordered him not to go, and said that he agreed and would wait for another contact from the informant. She claimed she didn’t know that he went to the park without backup.”
“You don’t sound like you believe her.”
“I don’t know what to believe at this point,” Brian said, his voice showing the first real sign of stress. “Phone records confirm that Bryce called her and they had a four-minute conversation. We know that his body was discovered at five ten that morning by city maintenance. The autopsy puts time of death between three and four.”
“He was set up,” Tony said.
“It seems plausible he was,” Brian said. “Still, while Bryce had a blind spot when it came to Detective Quinn, I don’t see him flaunting procedure in such a fashion or lying to his superior.”
No one said a word for a good ten seconds. If Brian’s assessment of his agent was correct, Chavez lied about what Bryce had said during their phone conversation. If she knew he was going to the park even without backup—or expecting backup to be provided by his superior—she may have been party to the setup.
Matt didn’t like her, but he hoped he was wrong about his suspicions.
“Keep me and your director in the loop,” Tony said. “On the allegations of fraud and public corruption, Agent Zack Heller is one of our top white-collar crimes experts, and Mr. Kim and Agent Wagner have been assisting. They have information.”
Zack had been fidgeting on-screen, and now he seemed relieved to be able to speak. “So, yes, this is a very interesting case,” he began. “I have reviewed everything sent to me—the statement by Mr. Lattimer, the public records that Agent Wagner and Ryder have uncovered related to the grants and nonprofits in question, press reports, and the file that Matt obtained from Mr. Dyson’s office.
“Mr. Lattimer is correct that on the surface there is nothing illegal about any of these grants or expenditures. However, the nonprofits being used as pass-throughs are certainly suspicious and I can see why Mr. Dyson felt that they warranted a grand jury investigation. There are some state and federal statutes regarding intent that may come into play. Since this is not my area of expertise, we would need to consult with the AUSA to determine what recourse the federal government has here.
“For example, there appears to be a comingling of federal and state monies with the city monies. This is not a crime. The money is given to local governments for the purposes of assisting the homeless, and comingling that with local money could be justified if it’s used for those purposes.”
Zack was certainly in his element here, Matt thought. He hadn’t warmed to the white-collar crimes expert, no one on the team had. But when it came to following the money, Zack was the best.
“But the grant process itself is rife with the potential for fraud,” Zack said. “There is no mechanism in these grants I’ve reviewed to account for the funding. Meaning, there is no built-in accountability. The entity receives five million dollars, they file the proper reports, and they have done their job. They do not have to prove based on the contracts where the money went or justify why they passed the money through to other nonprofits after taking a cut of the funds.”
Brian asked, “Is this common or an outlier?”
“Apparently, this is common in the homeless grant process, but it would be highly unusual in the private sector. Cities contract with nonprofits to provide services and yet don’t demand transparency or reports, such as who they helped or how many meals they prepared or individuals they housed. On the surface, this seems unethical but not illegal, as several people have said. Yet there are both federal and state laws that may have been violated regarding the fiduciary responsibility of state and local governments in approving the grants as written.”
“So while the grants themselves or the actions of the nonprofits may not be illegal,” Tony said, “the city’s lack of oversight could be a legal violation.”
“Yes.” Zack nodded. “And if it was willful or, as Mr. Lattimer suggested in his interview, individuals in government profited from the grants, then it’s certainly illegal. However, Mr. Dyson’s files are incomplete. Based on his reputation and the witness statements from Ms. Halliday and Mr. Lattimer, plus the reports from Detective Fox, he should have extensive information that was fed to him by those three individuals. I don’t have it.”
“You’re saying,” Matt began, “that the grand jury files we retrieved from his office are not sufficient to open a grand jury investigation, and that someone may have removed records.”
“Removed them, or perhaps he didn’t keep the records in his office. His notes refer to facts that I can’t verify from the files.”
Heller was very good at his job, but long-winded and talked around everything. It annoyed Matt, but it was hard to overlook the results, and if Heller said that files were missing, then files were missing.
“Briefly, from Dyson’s notes, even though you don’t have files to reference, did he believe he had cause for an investigation?”
“Yes,” Zack said, his voice both increasing in speed and intensity as he spoke. “Based on his written notes, I suspect he planned to use the grand jury process to force an audit. Considering that the city spends one billion dollars a year on these grants, plus receives extensive federal and state money that they also distribute, a grand jury investigation could spur more fiscal responsibility and make the distribution process more efficient. In an audit, every dollar would be accounted for, and the pass-through accounts would be heavily scrutinized. If half of what Dyson claims can be proven, I would think the investigation would force change in the system.”
“But you need those files,” Matt said.
“Yes.”
“What about the flash drive Detective Fox gave me? Or the files from Halliday?”
“The flash drive is documentation about Sunflower Homes, the CEO, the grants, the houses they own. There’s nothing criminal there. It’s one piece of the puzzle. The files from city hall are more of the same, but there’s a lot more and we’re still going through it. It’s clear from the note Ms. Halliday included that she has identified specific missing files that she believes are stored in an old backup at the city data center.”
Matt made note. “Is the information Fox provided useful or not?”
“It could be, once we can compare his evidence with the missing files. I don’t know what’s in those until I see them.”
Brian said, “One of the issues is that the homeless crisis is a political hot potato, and to launch this investigation five weeks before an election makes it problematic.”
“Sometimes, it’s just the way the case lines up,” Tony said. “We’re damned if we do, damned if we don’t. We don’t do anything, and one side says we held back until after the election to favor one political party. We do something, and the other side says we did it to favor the other political party. It doesn’t help when some of our own people have been caught making ill-advised and inflammatory political statements. Believe me, it’s one of the biggest headaches of my career, and it’s only gotten worse.”
“For what it’s worth,” Matt said, “I don’t think that Dyson had politics in mind when he started this. The timeline is clear—he assisted LAPD in the research and the undercover operation stemming from the arrest of Chen back in February and the revelation that Chen received government funding to house the women he trafficked. It’s a legitimate case. That it took seven, nearly eight months to build the case is par for the course, that he was ready to bring it to the grand jury in October before an election is just the way the timing worked. Besides, the grand jury could have taken months before issuing any report.”
“Okay, we’re going to assume his motives were noble and apolitical,” Tony said, “as he wasn’t running for office and has no family running for office. Zack, what is the government’s interest in federal money being used in these pass-through accounts?”
“We have an interest, but the way the grant process works we have given the money to the city to use as they see fit. This limits us. However, we can demand an accounting of all monies spent. Then the government can decide whether to give more or less to the city. Fraud is going to be hard to prove, but these missing files may speak to that. Ryder also has information.”
Ryder was much calmer than Zack. Matt wished he could clone his analyst. The MRT wouldn’t exist without him.
“Agent Wagner and I have been working together since yesterday afternoon,” Ryder said. “We’ve reviewed all nonprofit tax filings for entities listed by Detective Fox and Mr. Lattimer. There are several nonprofits that have received substantial sums of money and do not appear to do anything other than pass through the money to other nonprofits.”
“But that’s not illegal,” Zack quickly said.
“Not on the surface,” Ryder said. “But let me finish. The principles receive hefty salaries, and one thing caught my eye. Some of these people are the same. Muriel Coplin is the CEO of Angel Homes. Angel Homes is the nonprofit that’s building a city-approved 170-unit project in Venice Beach. She has allocated grants to other nonprofits for different aspects of the project, such as construction, supplies, environmental reports and more.”
“Which is pretty standard,” Brian said. “One organization doesn’t have the skill or expertise to handle all aspects of a multimillion-dollar project.”
“True,” Ryder said, “but it depends who is getting these contracts and if there is a bidding process. But I’m jumping ahead. The CEO for Sunflower Group Homes is Ben Kaprielian. Sunflower has received tens of millions of dollars over several years. It funds group homes for transitional housing, and has received funding from Angel Homes as well as directly from the city. Kaprielian is Coplin’s brother. Agent Wagner?”
Ryder nodded and Sloane spoke. “I worked primarily in public databases to confirm identities and run backgrounds on all the key names in the grants process. Lydia Zarian is a member of the board of supervisors. She is also a sister to Kaprielian and Coplin. She has decision-making authority over many of the projects that benefit these nonprofits. Kaprielian and Coplin, along with several other people I’ve identified, run other nonprofits. They profit through contracts in building, housing, food, supplies, et cetera. Ryder and I are putting together a matrix of how this works, but it’s going to take more time. Halliday and Lattimer have extensive documentation we’re still culling.”
“If you need more people, you have them,” Brian said.
“Thank you,” Sloane said. “The other thing we uncovered is that the individual responsible for approving all homeless-related grants is Jonathan Avila. He was appointed after the election of the mayor four years ago, and answers directly to Theodore Duncan. Avila is married to Duncan’s sister, Annabelle. Avila is also the son of Rebecca Chavez, as I informed you yesterday.”
Hearing Sloane lay out the bread crumbs so clearly put everything in perspective, Matt thought. Clear, concise, to the point. He could visualize now how the entire operation worked—who approved the funding, who benefited and why.
“Since then,” Sloane continued, “I have learned that Agent Chavez is Duncan’s godmother, and Chavez, criminal defense lawyer Dorothy Duncan, and Supervisor Lydia Zarian all went to the same private Catholic high school in Glendale. They’ve all been married for more than thirty years and only Chavez kept her maiden name, so the connection wasn’t obvious until I started digging.
“And—this is one more connection—Krista Zarian is the live-in girlfriend of Theodore Duncan. They haven’t registered as domestic partners, so there is no economic interest statement required.”
“Which means...?” Matt asked.
“Most city employees, including Duncan, are required to file a statement of economic interest regarding income outside of employment, property other than primary residence, investments, those sorts of things. Similar, but more extensive to economic statements we are required to file as federal employees. They also report half of their spouse’s holdings as California is a community property state. But not being married or registered as domestic partners, none of Krista Zarian’s economic interests are reportable.”
“Okay. Do you think that was deliberate?” Matt asked.
“I’m not comfortable assigning a motive,” Sloane said, “but they appear to have lived in the same residence for at least three years. Krista is the treasurer of every nonprofit we’ve looked at—nine of them so far. The listed treasurer is ‘KZ Accounting.’ Research confirms that Krista is the sole owner of KZ Accounting LLC. She earns $250,000 a year per nonprofit, which totals at two million, 250 thousand a year for the nine we’ve found.”
“Accounting pays well,” Zack interjected, “but not that well.”
Sloane said, “Krista is twenty-six, and she graduated from UCLA four years ago with a degree in graphic design. KZ Accounting LLC filed as a business with the state a full year before she graduated. The law firm that drew up the paperwork is Duncan, Young, Lee—which is Dorothy Duncan’s firm.”
“And that’s just what we’ve found so far,” Zack said. “There could be more. It’s a matrix, a spiderweb of nonprofits within nonprofits, but the names are repeating. And this is what I think Dyson was looking for and may have found. These connections may be in the files we know are missing. Even if there is no law against what these people are doing, if someone in the city is directing contracts and money to friends and family even if those friends and family are doing something legitimate—it’s suspicious. But this doesn’t look legitimate. I don’t see how a twenty-six-year-old graphic designer makes more than two million as an accountant.”
“The homeless industrial complex,” Matt muttered.
“Excuse me?” Tony said.
“Something Will Lattimer said the other day. So, what you’re saying, Zack, is that Dyson may have found a law under which to prosecute someone on this list for fraud?”
“Fraud, maybe. But California has a very specific and obscure law that has never been used, that I know of, regarding nonprofits and how they spend their money. Meaning, if they receive state money they are required to open their books at the request of a grand jury. Because the city comingled city and state money, that means any of these grants could have state money—they can’t retroactively say, ‘oh, no, this was only city money.’ Well, they could, I suppose, and then it would go to court. So it’s a potentially sensitive issue, and that’s what Dyson was focused on.”
“This is hard to prove,” Brian said.
“These cases always are,” Tony concurred. “What we have are two unsolved murders that may have been committed by one person we know as Conrad. And the solved murders of Chen and his bodyguard by a cop who was blackmailed by Conrad. Zack and Sloane, you both focus on the money. Anything you need, let me know. And Brian? You and Costa focus on homicide. I want the killer—or killers—in prison.”
So did Matt. He was glad he and Tony were on the same page.
“And,” Tony continued, “anyone who is involved after the fact will be prosecuted as an accessory to murder. I’m taking no prisoners. The first person who spills gets a deal, but everyone will get jail time.”
Rebecca Chavez sat in Brian Granderson’s office, her hands firmly clasped in front of her, glancing first at Matt, then at Brian. Brian sat behind his desk; Matt had pulled over a chair next to his desk so he and Brian would appear united against Chavez. He wanted her to sweat.
“Brian, this is highly unusual,” she said, her voice clipped and formal. “Do you have news about Bryce’s murder? Were you able to prove what he suspected? That Detective Quinn orchestrated the assassination of David Chen?”
Matt kept his face blank. She was trying to bait him, knowing that Kara was on his team.
Brian said, “Agent Chavez, this is a formal interview regarding information that has come to light. The same gun was used to kill David Chen and Agent Thornton. A Colt .45. We know that there are two different killers who used the same weapon.”
He slid over a photograph from the parking garage where Steve Colangelo claimed he left the gun in his car. The man in the photo closely matched the sketch Colangelo approved, and resembled the image captured in the courthouse.
“We have a confession from the individual who killed Chen and his bodyguard. He gave the gun to this man after the shooting. Do you know him?”
Rebecca looked, shook her head. “No. Did Quinn hire him?”
“No,” Brian said.
Rebecca was holding her own, but she shifted a little in her seat, seemed to finally realize that she was under suspicion for something.
Brian slid over the log that showed her computer accessed the LAPD portal the night before the Chen raid, and an employee log that showed she was in the building at the time her computer was used after hours.
“Did you access the LAPD portal on February 17?”
“I don’t remember.”
He slid over the LAPD case file. “The accessed file related to SWAT authorization for a raid on David Chen’s warehouse scheduled for the morning of February 18.”
She didn’t say anything.
“Do you remember now?”
“No.”
“You were in the office at eleven that night and your computer was used to access an LAPD report during the time you were here.”
“I am unaware.”
Matt said, “Coming in late at night you may have been alerted to something suspicious, some activity at LAPD, and you wanted to see what it was.”
“That’s conjecture.”
“Who did you tell about the raid?” Matt asked.
“I didn’t access the report.”
Brian said, “I will remind you, Agent Chavez, that as a sworn FBI agent you are required to answer all questions of a superior truthfully and without obfuscation.”
“I answered your question. May I leave?”
“No,” Brian said. “Did you contact any member of the press regarding the identities of Colton Fox or Kara Quinn and their position within LAPD?”
Rebecca glared at Matt, then said through clenched teeth, “No.”
Matt looked at his phone. Michael had texted him to call ASAP. Matt showed the message to Brian, then left the room and called Michael.
“There’s a press conference right now on the steps of city hall,” Michael said immediately. “The mayor, Lydia Zarian, Dorothy Duncan and Jonathan Avila. There’s a lot of media, it might be live, but it’s nearly over. I’ll get a recording, but Kara is there now. The gist? It has come to the attention of the mayor that there may be improprieties in some of the grants allocated to help alleviate the homeless crisis, and a joint task force between the city and county has agreed to hire a law firm to conduct an audit, led by Dorothy Duncan.”
“Well, shit,” Matt said. If what he had learned this morning was true, at least three of those people were involved in the grant process itself—and may have profited. What were they up to?
“When a reporter asked what specific improprieties were discovered,” Michael said, “Duncan herself answered that the matter was under investigation by her office and a full report would be made available when complete. The timeline for that report is expedited and will be available in ninety days.”
“Ninety days is after the election,” Matt said. “Both the mayor and Zarian are up for reelection.”
“Correct,” Michael said. “She took no more questions because of attorney-client privilege, and allowed no one else to answer questions. The mayor, then Zarian, ran through how much they care about people and taxpayers and the whole nine yards, but it reads phony to me.”
“Someone tipped them off.”
“Violet is with me at LAPD headquarters.” Matt had asked Michael to bring Violet in this morning to give her statement, but not to let her out of his sight. Not until they knew she was safe. “Violet blames herself. She leaked information to a podcast and she thinks that jump-started this ‘Cover Your Ass’ audit by Zarian and the others.”
“I want the podcast recording and the tape of the press conference. We’ll compare, but tell her this isn’t on her. That woman has been through hell this week. I don’t want her taking any of the blame from anyone, including herself.”
“I already told her.”
An armed guard and an FBI agent approached and stood outside Brian’s door.
“I have to go, but stick to her like glue.”
“Roger that,” Michael said.
Matt ended the call and watched as Rebecca and Brian left his office. Brian said to the guard and agent who had just arrived, “Please process Agent Chavez’s credentials, secure her weapon, and escort her and only her personal items from the building.” He handed the agent a cell phone. “Log the phone into evidence as well as her computer, seal her office and no one goes in without my permission.”
“Understood,” the agent said.
Rebecca looked pale and terrified. “You’re making a mistake, Brian.” Her voice quivered and Matt noted her knuckles were white as they clung to her purse.
“I really hope I am, Rebecca. Because if you lied to me just now? You will be prosecuted.”