The CBS Murders Page 5

  For instance: In May 1981, Margolies approached L. M. Van Mopes and Sons Ltd., a highly respected London-based diamond merchant. He was expanding, he said. He was about to turn out jewelry of a far better quality than he had in the past and, as a result, he needed very-good-quality diamonds. Of course, like most small businessmen in the business, his ready cash was tied up. Would Van Mopes take promissory notes in exchange for the diamonds, notes that would be paid off as soon as the new items were on the market, if not sooner? It was not an unusual request. Van Mopes agreed. It turned over $220,000 worth of high-quality diamonds to Margolies. He turned over $220,000 in promissory notes.

  Over the next four months, the diamonds vanished and the promised payments never were made. Despite all its efforts, despite pressures and entreaties. Van Mopes learned that dealing with Irwin Margolies, that trying to make an impression on him, was like trying to make dents in the air. It was out the diamonds, and all it had to show for its trust was a handful of worthless paper.

  To the world at large, Irwin Margolies held himself out as an honest and successful businessman, proprietor of a small but rapidly growing and profitable concern, devoted husband and father who provided his wife and children with all they could wish, devout Orthodox Jew who was dedicated to his religion and its commandments and moral precepts.

  To some who dealt with him and who came to know what that meant over the years, however, Irwin Margolies was a devious and crooked man who would stop at little to reach his goals, who could never be trusted to keep his word, who traveled twisted paths in preference to straight ones, who broke without moral scruple any religious commandment that stood in his way. He was, someone would say later, one bad dude.

  But still, he had his winning ways. He was a salesman who could sell himself, who could convince people who should have known better that what he had to offer was the real thing, that the outward veneer was no veneer but solid all the way through.

  And Irwin Margolies had a friend who, in 1980, showed him the way to make his dreams come true, finally to reach out and seize that prized gold ring.

  8

  Henry Oestericher was a few years older than Irwin Margolies. They had known each other for much of their lives, and their friendship had endured through the years. Like his old and close friend, Oestericher was a man with unrealized dreams. When he was young, he had dreamed of success and fortune in the jewelry business. He had grown up in it. His father was a prominent and successful jewelry merchant and manufacturer, had been one of the pioneers in the use of factoring—the borrowing of money secured by accounts receivable and anticipated sales—in the jewelry business to support the growth of his firm. But when the younger Oestericher tried his hand at the family trade, he failed.

  He turned to the law, and fantasized of fame and fortune at the bar. But after a quarter of a century as an attorney, he still operated only from desk space granted him as a favor in the offices of other lawyers on West Forty-fourth Street just off Fifth Avenue. He had never handled a major case, either in court or in the office, was reduced to scratching for business wherever he could find it, was dependent to a large degree on the legal affairs thrown his way by Margolies, more out of that old and enduring friendship than because of any legal talents Oestericher might have revealed.

  To support himself and his family, his legal practice providing only a meager income, far from enough for the life-style he aspired to and tried to maintain, Oestericher spent a good part of his working hours as a landlord’s agent, managing buildings around New York and in New Jersey. But even here, his buildings were not in the luxury class, not along the Upper East Side or Upper West Side. They tended to the seedy, like the one on West Forty-fifth Street where Vinnie Russo maintained his catering establishment and where Donald Nash kept his desk and telephone. Oestericher managed a couple of apartments in New Jersey and, among others, the Somerset Hotel at Broadway and Forty-seventh Street, a fleabag cited too many times to count for violations of the buildings and sanitation codes, for nonpayment of taxes, and for scores of other infractions. And it was notorious as a haven for the neighborhood prostitutes; Oestericher’s connection with it earned him, from some of the area’s denizens, the nickname “The Pimp of Father Duffy Square,” the statue of Father Duffy of World War I fame staring across at the Somerset.

  Then, one day early in 1980, Henry Oestericher came up with an idea that might make all his dreams and those of his close friend come true.

  As he sometimes did in private with somebody he could trust, with a close confidant, Margolies that day was bemoaning his fate to Oestericher. The business wasn’t growing fast enough, was constantly teetering on the edge. He had been forced to mortgage his Westchester home to keep it afloat. He was constantly having to invent new and more outrageous scams to bilk the unwary and raise the needed cash, and a lot of them seemed to backfire, and certainly none brought in enough really to make the effort pay off as he wanted. What he needed was a foolproof scheme that would bring in enough so that he would never have to worry again.

  Oestericher listened. He had heard the story before, was well aware of what lengths Margolies had been driven to, was willing to go to, and was capable of. He knew, too, or he expected that if he could come up with the scheme that would help Margolies, he would gain his own reward. It had been on his mind for some time. Now was the time to spell it out.

  What did Margolies know about factoring?

  Margolies knew enough to know that it was a major financing method in the garment industry; it was the way those companies, trapped in a seasonal business, were able to get the cash to turn out new lines every season.

  Had Margolies thought about going to a factor to finance his jewelry manufacturing business?

  Margolies had not. Factoring was not a particularly common practice in the jewelry business, though it was done. Besides, Candor Diamond was a small company without much of a growth record. It was doubtful if one of the major factors would jump at the chance to finance his accounts.

  Don’t be too sure, Oestericher said. He himself knew plenty about factoring. After all, his father had been one of the earliest jewelry merchants to go that way. Perhaps Margolies was right that one of the long-established jewelry factors might look the other way if he approached. But, Oestericher said, he knew of a factor who might just leap at the chance. John P. Maguire and Company, the factoring division of Irving Trust Company, had, for some years and with considerable success, financed garment firms. But it was anxious to spread itself out from that highly volatile industry into one that might be less seasonal and a little more secure. Garments were garments, and if a line flopped, the factor was left holding a lot of cloth and some clothes that nobody wanted, and it would be lucky if it could sell off for pennies on the dollar. But the jewelry business was something else again. If the earrings and bracelets and broaches and other trinkets didn’t sell, there were always the diamonds and the gold and the other jewels used to make them. They didn’t lose their value. They always could be sold, and they would bring plenty on the market and so would be a protection against major losses. Oestericher knew people at John P. Maguire, knew how anxious they were to get a foot in the door of a new market for their money. Would Margolies like an introduction? Or, better still, why didn’t he have his Scarsdale bank, which held the second mortgage on his home, make the opening contacts and thus provide an element of stability and probity?

  The more Margolies listened, the more he liked the whole idea. He and Oestericher were not, that day, merely talking about finding a new source of funds to support Candor Diamond and help it grow, of course. What they were talking about, and both men knew it, was a scheme to take John P. Maguire not for thousands but for millions.

  Soon after that discussion, Margolies approached officers of Scarsdale National Bank, told them he had heard that John P. Maguire might be interested in factoring jewelry manufacturers. Since he personally didn’t know anybody there, would the bank make the necessary introductions? S
carsdale National was more than happy to comply. Within a few weeks, Margolies was deep in discussions with Maguire.

  On March 21, 1980, the negotiations were completed to everyone’s satisfaction, and a contract was signed between Maguire and Margolies. Under the agreement, Maguire would advance Candor Diamond up to 85 percent of the sales price of its merchandise, the money to be transferred to Candor’s account electronically once Candor Diamond shipped its merchandise to its customers and received invoices that would then be forwarded to Maguire. In exchange, Margolies personally guaranteed his company’s debts to Maguire, and Candor Diamond gave Maguire a lien on its entire inventory of diamonds, gold, and other valuable gems and merchandise. Further, all the income from Candor Diamond’s sales was assigned to Maguire. Candor Diamond’s customers were to be notified, by a sticker pasted on the invoices and bills, that the company’s sales were factored and that all payments were now to be made not to Candor Diamond but directly to Maguire, were to be mailed when due, normally within thirty to ninety days, to a post office lock box maintained by Maguire.

  There was nothing unusual about the agreement; it was the standard way that factoring worked. Maguire had no suspicion that anything out of the ordinary was about to take place, for Margolies and his company came highly recommended. (Margolies’s past shady dealings and practices escaped Maguire’s notice, if the factor even bothered to check.) In fact, if anything, Maguire was delighted with the whole arrangement. It was, company officials hoped, the opening into a new market for their money.

  For Margolies, though, the arrangement was the golden ring he had long been reaching for. He was about to become a millionaire, at Maguire’s expense. Initially he moved slowly and cautiously, and with a certain circumspection, like a swimmer testing with his toe the temperature of the water. He made his sales, shipped his goods, filed his invoices, and then received, into Candor Diamond’s new bank account at Irving Trust (within six months, though, he would close that account and open a new one for Candor, somewhat farther from Irving Trust’s reach, at Bank Leumi Trust Company in New York), from Maguire an amount equal to 85% of the sales prices noted on the invoice.

  And then, on May 8, he tried a little experiment in fraud. He sent Maguire an invoice declaring that he had just sold and shipped to The Diamond Shop in St. Louis a batch of jewelry worth $7,704. Within a few days, Candor Diamond’s account was $6,548.40 richer. The only thing was, The Diamond Shop had never ordered nor received any merchandise from Candor Diamond.

  Margolies waited to see whether anybody at Maguire would catch wise, would ask any embarrassing questions. Nobody did. Of course, there still was the question of the payment of $7,704 to Maguire within about ninety days. Margolies figured that he would come up with a solution to that when the time came. What he knew now was that all he had to do was file invoices and Maguire would come up with 85% of the money. If he worked it right, Candor Diamond could become a giant within a very short time, a giant on paper and in the bank, of course, even though nobody in the marketplace ever saw much of its output.

  But Margolies was not fool enough to think he could go on this way forever. Someday, of course, Maguire would catch wise and come down on Candor Diamond, demanding an accounting. When it did, somebody was going to go to prison. What Margolies needed was a patsy to take the fall when that day arrived.

  9

  Margaret Barbera was very good with numbers. She could take a balance sheet, a set of account books, invoices, bills, and more, juggle and manipulate the figures, and, presto, thousands became millions, losses became profits, profits became losses, sales soared or fell, whatever her employer desired, and it would take an expert auditor knowing precisely where to look and what to look for to figure out what she’d done, and even then, it still might slip by. There is an underground of people like Margaret Barbera, eagerly sought after by businessmen in trouble, especially in volatile and unstable industries such as garments and jewelry. Ask the right questions of the right people, and pretty soon a Margaret Barbera, or somebody very much like her, will come knocking at the door.

  She had grown up in New York City, in the outlying boroughs of Brooklyn and Queens, child of a large nomadic family—some would say they were much like Gypsies, residing for a time in her childhood in the back of a small truck parked in vacant lots and at curbs, constantly on the move around the city, picking up work and dollars wherever they could be had.

  Margaret was the smart one in the family. She was good at figures and was adept at figuring out the angles. When she graduated from high school in 1961, she got a job as a bookkeeper for a major chain store, worked there for a couple of years, and then moved on to mastering computers. But without a college education, she complained, her chances for advancement, for a good job at high pay, were strictly limited. So at twenty-seven, still holding down a full-time job, she got herself an apartment in Ridgewood, Queens, where she would remain until her murder, and went back to school, enrolling in the School of Commerce at New York University. She graduated in three years, with honors and a bachelor’s degree in business administration. For another year, she was in graduate school at New York University, but then dropped out. Her grades had fallen sharply and, she told someone, besides, she felt she had learned about all the school had to teach her.

  It was 1974 then, and she was a very busy lady. During the day she worked as an accountant for a large midtown company, and at night, in her Ridgewood apartment, she began to develop the skills that would bring her to the attention of needy businessmen. At her daytime job, she was earning $17,000. Nobody knows how much she was taking in at her after-hours work, but what is obvious is that it was occupying more and more of her time and energy, enough so that she was constantly inventing excuses for absences from her regular job. She compiled a long, sad story of constant and unrelenting bad luck. Her mother had cancer, she explained, and so she had to go and take care of her. Other relatives suddenly had fallen seriously ill, and she had been called on to tend them. She herself was ill—with cancer, with a variety of other ailments, serious and not so serious, and she was under treatment, which meant she could not go to work. Her fiancé (a man nobody who knew her seemed aware of) had been killed in an automobile accident and she was in mourning, too stricken to reach the office. By 1977 it had all become too much for her employer, and he felt he had no choice but to let her go.

  For the next three years she worked sporadically as an accountant at jobs she picked up through a temporary agency. At night and at other times she continued to ply her growing expertise in less legitimate accounting methods. She, too, it seemed, was waiting for the right moment, the right thing.

  Her personal life was an enigma. Obviously she was earning a lot of money at her spare-time vocation, but what she was doing with it, nobody seemed to know. And nobody seemed to know her. Although she had lived for a decade in the same fourth-floor walk-up apartment, her neighbors knew her not at all. Sometimes they saw her on the stairs, passed by, nodded, but she never spoke a word. All any of them knew was that she had few visitors, only one with any regularity, an Oriental woman who arrived and often spent several days. And that was all.

  In the spring of 1980, when Irwin Margolies began looking for an expert with figures to help him take John P. Maguire, someone who would become the patsy to take the fall when that day came, Margaret Barbera was exactly what he was looking for. As he had been throughout all his initial dealings with Maguire, Margolies moved with a certain caution. He asked his own auditors, H. W. Freedman Company, if they might happen to know a good accountant who wanted a job. Candor Diamond, he explained, was on the verge of major expansion, its business beginning to show substantial growth that should continue far into the future. As a result, the ledgers and books, the invoices and billings, all the record-keeping was going to be a very complicated matter. He needed somebody who could keep track of it all; there were going to be the government tax people and the state tax people and Maguire and a lot of others who were going to
have to be kept informed, and informed correctly. He just wasn’t going to have the time to take care of all this himself; he was going to be too busy designing and supervising the manufacturing and the selling. So he had to have somebody who was good and who was reliable. It just so happened that at that very moment, Margaret Barbera was working at Freedman on one of her temporary jobs. She seemed to know her business; she seemed reliable; she seemed just the kind of person to send along, with high recommendations, to Freedman’s client, honest Irwin Margolies.

  But Margolies was not about to take Barbera on Freedman’s word alone. If she was all Freedman said, she certainly was not what Margolies had in mind. He did a little quiet checking among some like-minded friends. Did they know Margaret Barbera? What kind of person was she? Could she be depended on? Would she follow orders? The questions, subtly put, of course, were the tip-off as to what he meant, and the responses he elicited more than satisfied him. Detective Richie Chartrand later learned the identity of at least one of those who had given Margolies the good word about Barbera. “I knew the guy who referred her,” he says. “I’m sure his recommendation was of the highest. I’m sure that knowing Irwin and what Irwin must be looking for, he said she was just the right kind of person. I wouldn’t believe a word he ever said. One time he got robbed. They took everything he ever owned. He said, ‘They held me up at gunpoint one night and I only had two Manhattans. They took all my goods. My watch.’ But they didn’t take his wedding ring. My God. You being robbed, they want to take your stuff, they’ll take your wedding ring, they’ll cut your finger off to get it. So if you’re looking for a special kind of thing and he knows it, he’s the right person to go to.”

  And so, at the beginning of June 1980, Margaret Barbera went to work for Margolies and Candor Diamond as a parttime bookkeeper. All the pieces of Margolies’s plan were now in place. He had Maguire, which appeared by its actions, or inactions, over the first months of the factoring agreement, not merely gullible but almost anxious to be swindled, so pleased to have taken the first step into a new factoring market that it would be a long time, if ever, before anyone there had any suspicions or asked any questions. He had someone to doctor his books and to appear, on the surface at least, a responsible party. But when the crunch came, she would be his pigeon. It was, then, time to grow, time to become rich.