The Metronome (The Counterpoint Trilogy Book 1) Read online

  “He wore sunglasses, so I did not see his eyes, but otherwise yes.”

  This is not exactly true, Alexei lowered his sunglasses when it seemed like he was going to kill me. But I don’t remember what they looked like except it felt like a cobra staring at me just prior to a deadly strike.

  Shmulin muses. “A banker and a gangster. The new Russia. I don’t think I should be talking to you.”

  But he does not hang up, so I rush to keep the connection open. “Mr. Shmulin, I won’t give your name to anyone, and I’ll pay for your time.”

  “The information may not do you much good,” retorts Shmulin, but he still does not hang up. After a pause, he adds, “It’s your business. Come here tomorrow morning and bring $500.”

  I take down the address. It’s in the Zemlyanoy Val area. I feel elated; I found a trail.

  Monday, June 19

  I take the metro in the morning. Today is a weekday, the metro carries harried commuters. We are jammed together, people staring straight ahead. I arrive at Chkalovskaya station and emerge into a bright sunlight. Even on Monday morning, the walk to Shmulin’s place feels dangerous: the area is populated with street urchins and prostitutes. Drunks are already out in force. I am sure people have been attacked here for much less than the $1,000 cash in my pocket. I do my best to look like a local and walk briskly, avoiding eye contact. It is only a ten-minute walk, but I am sweating at the end.

  Shmulin’s apartment is in one of the eight-story communist-era monstrosities that dot the suburban landscape. I step around a half-dozen young people sitting on the steps in front, climb to the fourth floor and ring the bell at the number 15. I hear someone shuffling to the door, the peephole goes dark, then at least three different locks click. The door opens by about one inch, still latched on a chain. An eye appears at about my shoulder level.

  “Pavel?”

  “Yes, Mr. Shmulin. Can I come in?”

  The eye studies me for about a minute, then a nasal voice pronounces, “Well, come in.”

  Boris Shmulin must have been short even in an earlier age. Now he was thin, stooped and barely five feet tall. Despite this being a warm day, he is dressed in a red fleece coat, a flannel shirt, sporting pants with stripes on the sides, and slippers. A wrinkled face is covered by bottle-thick glasses and a few white wisps of hair are plastered across his bold head. Shmulin gestures to follow him and shuffles down a dark corridor to what looks like a small living room with a table, three chairs, a worn-out sofa, a TV set, and a bookcase filled partly with books, partly with photos, vases, and goblets.

  Shmulin sits on one of the chairs and nods at me to sit in another. Without asking me, he pours two glasses of water from the pitcher on the table. He carefully pushes one glass in my direction, I automatically take it.

  We look at each other, and then he clears his throat. “I am afraid I must ask for the money upfront. Moscow is an expensive city.”

  “Of course,” I count out three $100 bills.

  “I told you $500,” hisses Shmulin.

  “And I have $200 more for you. But I have to see if the information is worth it.”

  Shmulin considers me with suspicion and pockets the bills. He narrows his eyes, stares at me for a while and says,

  “What did you say your last name was?”

  “Rostin.”

  “Are you related to Vladimir Rostin?”

  This is so unexpected that my hand jerks and I spill some of the water.

  “He was my father. Did you know him?”

  Shmulin looks with annoyance at his now wet tablecloth.

  “Your father sat in the same very chair.”

  “When was he here?”

  “Six, seven months ago…I remember it was cold.”

  “Tell me what you told my father.”

  “Why not ask him?”

  “He is dead.”

  Shmulin’s eyes narrow: “How?”

  “He killed himself.”

  I decide not to mention that it might have been a murder, with me as the prime suspect.

  Shmulin bites his lower lip, chews on it and says:

  “I don’t think I want to talk to you. Too dangerous.”

  “Look, it was a long time since you’ve met with my father and nothing happened to you, right?”

  Shmulin shakes his head, “Even if I got lucky once, does not mean I should tempt fate.”

  I play the greed card: “Give me back my money then.”

  Shmulin stands up and pulls a small gun out of the right pocket of his fleece coat:

  “I don’t think so. And I’ll take the rest of what you have.”

  He smiles and stands tall, at least for his height.

  I remain seated, trying to think. Shmulin knew the gangster from last night.

  “Alexei sent me to you, he is not going to like it when I tell him you robbed me.”

  “You don’t know Alexei!” spits out Shmulin but his pupils dilate behind thick glasses and his body stiffens visibly.

  I press on: “He gave me your number. I told you that last night.”

  Shmulin breathes heavily, shoulders sag, smile now completely gone. He puts the gun back in his pocket, sits down dejectedly:

  “All right, I am sorry. I became anxious when I heard about your father.”

  “Don’t do this again,” I try to stop my hands from shaking. Thankfully, he can’t see them under the table. “Now, what did you tell my father?”

  Shmulin scratches his bald head. “Your father was looking into activities of a certain John Brockton. Are you familiar with that name?”

  “Yes, I am.”

  “Let me start back in 1993. I am an accountant by profession, always been good with numbers. The Soviet Union has fallen, we have a free market, which means the prices are going through the roof, official salaries don’t buy much and are not even paid regularly. Everything for sale, everything a commodity. Mini-skirted young women line up the Tverskaya Street selling their bodies. Army veterans advertize themselves as killers-for-hire. What are you going to do? You have to hustle.”

  Shmulin theatrically spreads his arms to demonstrate that hustling was indeed the only choice.

  “That’s how I’ve met Victor and Gennady Crossman. They were doing black market stuff for years, now they found themselves a new playground. People like that thrive in markets that are either rigged or undeveloped. They speculated in currency until they figured that the stock market is a more lucrative game. There was no such thing as a stock market in the Soviet Union, so it’s all new with no rules, nobody knew what things are worth. The government decided to privatize everything, so in late 1992 they issued 10,000 rubles vouchers to all citizens. People had no idea what to do with these vouchers. The Crossman brothers started by standing on the street with bottles of vodka and trading for vouchers. Then they hired others to do it for them, open kiosks for vouchers trading. By 1994, they accumulated shares in a number of companies. That was the year they hired me to run their operations while they focused on “marketing” as they called it. They were advertising Avtotorgoviy Securities as a brokerage firm, but basically they were looking for ways to hustle their customers. If there was demand for a certain stock, they would sell it at a small profit to one of the accounts they controlled, and then mark it up for a real sale. All their profits would go to a company they set up in Cyprus to avoid taxes.”

  Shmulin stopped, pulled out a handkerchief from the pocket of the fleece coat, and blew his nose.

  “Excuse me. As I said, they were small time. Until they’ve met John Brockton, I think it was in 1995. Brockton had just arrived in Moscow. He was this brash, tall, blond, baby-faced American who dove into the local party scene. The girls loved him; he was known to take home two or three of them at a time. Brockton wanted to purchase a block of shares in a company where Crossman’s accumulated a significant stake. They tried to hustle him, but he figured it out. I think Brockton already knew exactly the scheme that he wanted to run, he needed the right
Russian partners to do it.”

  “The scheme was to corner the market in some of the stocks?” I asked.

  “Kind of, but it required some finesse and sophistication. The way that the Russian privatization was structured, only about half of the shares were public; the rest were owned by the insiders. So in some cases you wanted the insiders in on the scheme. Additionally, Brockton’s fund had to trade with multiple parties, otherwise the auditors would quickly figure out what’s going on. It took them a few months to set things up, but by mid-1996 the scheme was in place. Besides the Brockton’s fund, three “investment companies” were involved: One was controlled by the Crossman brothers, one by Arkady Khmarko, and one by Evgeny Voronezhsky.”

  “Voronezhsky?” I could not help my reaction.

  “Yes. Why, do you know him?”

  “No, just the name sounded familiar. Sorry, please continue.”

  Shmulin noisily drinks water. “You must understand that these “investment companies” were not empty shells; they had to have financial backing, access to capital. Let’s say you want to raise the price of a stock from five to ten dollars a share. To make it look legitimate, you have to create decent trading volume. You put a million shares into play to raise the price to $6, so an investment company puts down six million. Over a period of a couple of months, the shares get taken over by another company at a seven dollars a share, then another at an eight dollars. After six months, the shares are back where they started but now they are trading at ten. It’s oversimplified, but you get the picture. And when you have a dozen different stocks in play, you have to manage the cash flow, the inventory. Everyone was making money as long as Brockton’s American investors were buying into his fund. Which they were, in 1996 and 1997 the foreign investors could not get enough of Russian equities. And Brockton himself was being paid based on the fund’s performance. Even I, a lowly operations manager, was doing well and could afford to take dates to the Serebryany Vek restaurant, party with the rich. I knew the dates were not there for my looks, but still. It was a beautiful thing. Until it all went wrong in 1998.”

  “What happened?”

  Shmulin stares at me, says nothing.

  I repeat: “What happened?”

  “I told you $500. Do you think I’ll finish the story without seeing the rest of the money?”

  I hand him the remaining $200. Shmulin smiles in satisfaction and continues:

  “The first cracks appeared in late 1997 when the Russian stock market plunged almost 20 percent in one day. The partners got nervous, but Brockton reassured them that this is a normal process for an emerging market and that the investment flow from the U.S. would go on. He probably knew that the party was ending, but he did not care; he wanted to get his bonus for the year. The market recovered, and the business continued. In May of 1998, the market started dropping again. The Russian government had been funding itself by taking on more and more short-term debt, and its financial position became unsustainable. People started running scared, but in mid-July the International Monetary Fund, IMF, announced a massive bailout for Russia. Many thought that the crisis was over, but this turned out to be only a short respite. In August, the markets started tanking again, then George Soros wrote in the Financial Times that ‘the Russian financial meltdown has reached the terminal phase.’ In mid-August the ruble has been officially devalued and everything collapsed.”

  Shmulin falls silent, tired from his speech. After a minute, I prod him. “And what about Brockman?”

  “Brockton disappeared in mid-July. He would sometimes take off for a week without a notice, taking some of his girlfriends to the French Riviera or skiing in the Alps; nobody was worried until early August when rumors started circulating that he left for good. I think he sensed a few months earlier that the party was ending and carefully prepared his departure. Now remember that the scheme worked only as long as everyone participated. With Brockton leaving, his fund was out of the game. The Crossman brothers and Khmarko smelled the rat and pushed the securities they were holding to Voronezhsky’s company. After the IMF announced the bailout package in July, Voronezhsky must have decided that things were safe for a while. So he was out of the country on vacation. When he came back, he found himself with most of the securities that were in the pipeline and that he could not sell to the fund any longer. As the crisis hit, these securities collapsed – they were artificially inflated and there was no market for them outside of the scheme. Voronezhsky lost tens of millions of dollars that belonged to the mafia that bankrolled him.”

  “What happened?”

  “Voronezhsky killed himself in late August of 1998.”

  “What about others?”

  “The Crossman brothers and Khmarko were not completely wiped out, but they lost a lot of money in the crisis. I lost my job and most of my savings, so now I have to live here.”

  “I know that Victor and Gennady Crossman were killed in 2001. Is that the end of the story?”

  Shmulin cackles, it took me a few seconds to realize that he is laughing.

  “Not quite, not quite. You see, Arkady Khmarko went back to his native Ukraine, started doing well there, but in the summer of 2002, he died in a boating accident. His high-speed boat just exploded as he was driving it on the river.”

  “You continued to follow him?”

  “Not really, but it was in the news. At the time I thought that Khmarko had an accident and the Crossman brothers must have crossed somebody they should have not crossed. But then a year later I read that John Brockton gets killed. This had a lot of publicity, his girlfriend was a Russian TV person at one time. So I said, ‘Boris, there are too many coincidences here.’ I decided to look up Voronezhsky’s second in command, the man who was ‘minding the store’ so to speak during that critical time in the last week of July of 1998.”

  Shmulin pauses dramatically, and I play along. “And?”

  “Took some digging, but turns out he was killed during home invasion robbery in 2000. Right here, in Moscow.”

  “So pretty much everyone who was involved in the scheme is now dead?”

  “Pretty much,” confirms Shmulin, “except for me.”

  “Are you afraid?”

  “No. If they wanted to kill me, they would have done it a long time ago. They were going after people in charge. I am more afraid of real estate shysters that kill old people for their apartments. It’s a lucrative business in Moscow.”

  “Who are ‘they?”

  Shmulin cackles again. “Your father asked the same question. Probably someone in the mafia that lost money in the scheme. I don’t know, and I don’t want to know.” He gets up, signaling that the conversation is over.

  I remain seated, and the eyes behind thick glasses get anxious. “One more question. Please sit down.”

  Shmulin obediently lowers himself back into the chair. “Yes?”

  “I need to find a person. I have a name. I know he used to work for the KGB.”

  Shmulin rubs his chin. “Well, it’s possible. Like any Russian business, we had to have a ‘roof,’ a strong protector within the government. Otherwise, between the mafia and the government bureaucrats, you’d be out of business within a month. Our ‘roof’ was fairly well placed within the Federal Security Service, the FSB. He is retired, but he can still find almost anyone. But there is a price.”

  I know what he is going to say before he says it.

  “Five hundred dollars.”

  “OK.”

  “Who are you looking for?”

  “I am looking for Konstantin Mershov; he moved from Leningrad to Moscow to work for the KGB in the 1970s.”

  “The money upfront.”

  “No, not upfront. When you deliver the information, I’ll pay.”

  Shmulin whines. “I can’t do it this way. You may disappear and then I am on the hook for the money.”

  I stand up.

  “Fine, give me a hundred dollars upfront.”

  “How do I know you won’t pocket
it and do nothing?”

  “You know where I live.”

  I think about it, then give him another hundred dollar bill and a card with my mobile phone number.

  As I walk downstairs, four of the youngsters that were sitting outside are now waiting for me at the door out of the building. They block my way and one of them pulls out a blade. “Give us the money!”

  The blade is inches from my throat. Before I can react, I hear a voice behind me. “Let him pass!”

  Out of the corner of my eye I see two large people coming from my right; they must have been in the building, hiding in the shadows. One of the youngsters turns to them, is immediately thrown to the floor, and hollers in pain. A melee begins. I rush to the door and run out into the street. My heart slows down only by the time I get to the metro station. Was someone deliberately protecting me, or did I get caught in a turf war?

  When I get back to the hotel, I redraw the diagram.

  I make the “Grand Castle Rock fund” circle, with Martin Shoffman, the New Treasury Island ELP, plus Greg Voron with his Eastern Cottonwood private equity fund under it. Beneath the last entry, I write Hardrock Home Security.

  Under the “Brockton-Streltsova’s murder” circle, I put Brockton and Streltsova. Then I add Crossmans, Khmarko, Voronezhsky – all dead. I write Hardrock Home Security and draw a line to the company’s mention under the other circle.

  Below the “Streltsova’s investigation” circle, I put Streltsova’s name and “Nemtsov? Nemschev?” from Streltsova’s notes. Again, I draw a line to the other Streltsova’s mention.

  In the last corner, I put Major Vakunin, investigator Pemin, Petr Saratov and Sam Baker.

  In the middle, I put my father and draw arrows to the “Brockton-Streltsova’s murder” and “Streltsova’s investigation” circles.

  I stare at the diagram and make a dotted line between Voron and Voronezhsky. When people move to another country, they often shorten their name. Voronezhsky was in finance, Voron is in finance. It’s a questionable connection, more of a coincidence.

  After finishing the diagram, I search the Internet for Evgeny Voronezhsky. Nothing, zero, zilch. Did Shmulin lie to me? I try Arkady Khmarko and Google returns his obituary following an August 2002 boating accident on Dnieper, some tidbits about the trading company he ran in Kiev, and a little about the investment company he had in Moscow.