When she spoke to Harlan Jones over the intercom, she announced only that I was there, so Fausta entering his private office with me was a surprise to him. We found him feverishly comparing a pile of bank statements with what seemed to be a stack of duplicate deposit slips. He did not seem particularly glad to see me, but his eyes lighted with almost breathless interest when they touched Fausta.
“Miss Fausta Moreni,” I said. “This is Mr. Jones, Fausta.”
Jones’ round body popped out of its chair like a bounced rubber ball. His face fixed in an almost groveling smile, he told Fausta he was delighted to meet her and quickly rounded the desk to hold a chair for her.
He let me find my own chair.
When he had fussily reseated himself, he continued to gaze at Fausta as though fascinated. It was a common reaction for men to pant slightly the first time they saw Fausta, but Jones seemed to be overdoing it.
I said, “I understand Mrs. Jones was released finally, Mr. Jones.”
“Yes,” he said, wrenching his nervous gaze from Fausta long enough to look at me. “I just spoke to her on the phone. She plans to take a shower and then nap until she recovers from the ordeal.”
“What I really dropped in about was the bank deposit slip found in Willard Knight’s pocket,” I said. “Inspector Day told me you went to the bank this morning to check on it. Find out anything?”
“I’m still finding things out,” he said, gesturing towards the pile of bank statements and deposit slips on his desk. “It’s a rather appalling discovery to make about a dead partner, but it seems Knight has been juggling the basic company account for some time.”
“Shortages?”
He shook his head. “Fortunately no. At least as nearly as I can make out from a quick check, and I don’t believe that an audit will disclose any shortage either. But had it not been for the deposit Knight made only yesterday afternoon only a few hours before he died, the firm would be seventy thousand short. And that would have meant bankruptcy.” Drawing a handkerchief from his pocket, he wiped the back of his neck and shivered again over the narrow escape.
“The seventy thousand belonged to the firm, did it?” I asked. “And Knight replaced it on the Q.T.?”
“Worse than that. It was a client’s money in our custody. Apparently Knight had been using funds intrusted to us for his own personal speculations for nearly a year. Frequently, instead of depositing a check received from a client, he would use the money for market speculation first, then deposit it after he had made use of it. Apparently he was consistently lucky, or at least not unlucky, for while I am sure he never made any very substantial profits, he never seems to have lost his illegally borrowed capital either. At least the records indicate he always managed to deposit what he had withheld before the last day of the month, so that the bank statement always showed the proper balance.”
“He never held out deposits more than thirty days then?”
“No,” Jones said. “Sometimes for periods only as long as two or three days. I imagine he would buy some shares, wait for a rise above his purchase price, then immediately sell out, pocket whatever profit he had made and deposit the capital he had withheld.”
“But wouldn’t your bookkeeper catch the discrepancies between the dates amounts were supposed to be deposited and the actual dates of deposit?”
Harlan Jones’ angry flush told me what caused Matilda Graves’ tears. “She should have, but Knight seemingly knew her shortcomings better than I did. Miss Graves is an efficient secretary and bookkeeper, but apparently she doesn’t do any unnecessary work. The way my partner worked it was really quite simple. By mutual agreement he always took care of bank deposits... that is, he made all trips to the bank. Miss Graves prepared the deposit slips. The account he was tampering with is the company’s basic checking account into which all monies received are always deposited. We have three other accounts: a petty cash fund of five hundred dollars which Miss Graves is authorized to write checks against for rent, utilities and so forth; a savings account in our joint names, and an expense account both Knight and I were authorized to write checks against. But deposits to these accounts are always by transfer of funds from the basic account, you see, and never by direct deposit of monies received. In this way all money transactions have to pass through the basic account, which simplifies bookkeeping.”
When I believed I had this absorbed, I said, “For instance, your firm receives a profit of a thousand dollars from some transaction, and you decide to deposit it in your savings account. Instead of making a direct deposit, you stick it in the basic account, then write a check against the basic account for one thousand dollars and deposit that.”
“Exactly. So all Miss Graves’ book entries represent either a deposit or a check written against the basic account. Apparently Willard figured that as long as the final figure on the bank statement jibed with the balance in Miss Graves’ books when she totalled up at the end of each month, she wouldn’t bother to check the deposits appearing on the bank statement against her file of deposit slips. What Willard did was have a rubber stamp made similar to the one the bank uses on duplicate deposit slips. I found it in his desk this morning.”
Fumbling in his desk drawer, he produced a large rubber stamp, held it up for a moment and dropped it back in the drawer again. “Instead of using a bank book, Miss Graves always prepares two deposit slips, one for the bank and one to be stamped and returned to her as a receipt. When he wanted capital for a speculation, apparently Willard would withhold one check from deposit, make out new slips and deposit the remainder of whatever Miss Graves had given him. But what he would give to her as a receipt when he returned from the bank would be the duplicate slip she had actually prepared, stamped by him instead of by the bank.”
“I see,” I said thoughtfully. “So what you’re looking for in that stack of bank statements is large amounts deposited in two separate chunks at periods up to thirty days apart, where your duplicate deposit slips show it deposited all in one piece.”
“Exactly. And so far I have discovered five instances during the past year. Amounts ranging from five thousand dollars up to the top one of seventy thousand which Willard returned yesterday.” At the thought of the seventy thousand he again ran his handkerchief over the back of his neck. “Prior to this last time it was mainly firm money Willard was playing with, but this belonged to a client. It was advanced to us to buy a certain stock when it falls to the price the client is willing to pay. We would have been ruined if Willard had not gotten it back in the account.”
“Happen to know what he was planning to do with the seventy thousand?” I asked.
Jones shook his head. “Apparently he had already done it. The Riverside Bank tells me the deposit was a certified check on the Mohl and Townsend Investment Company, a competitor of ours. Willard must have bought some stock through them, then unloaded it and returned the money just before he got killed.”
“Have you talked to Mohl and Townsend?”
Again Jones shook his head. “I don’t plan to. I plan to turn all information I find in our own records over to Inspector Day and let him use it as he wishes. But beyond being thankful that his investments didn’t cost Willard any money, I don’t care what his speculations were now that he’s dead.”
The Mohl and Townsend Investment Company office was a duplicate of the Jones and Knight office with one outstanding difference. Instead of a middle-aged spinster presiding over the reception room, we found a voluptuous blonde who would have been nearly as beautiful as Fausta, had her voluptuousness not been slightly overdone. I have as much admiration for an impressive feminine torso as the next man, but I don’t like to have to approach side-wise to get my arms around a girl. She had a typewriter in front of her, and my first thought when we entered the office was that she obviously must use the touch system, for if she backed up enough to see the keys, she would be too far from the machine to reach it with her fingers.