STATE SECURITY by BRIAN R. LUNDIN (best finance books of all time TXT) 📖

STATE PRIVATE SECURITY COMPANY


STATE PRIVATE SECURITY COMPANY

A screenplay by Brian R. Lundin


PROLOGUE


UNITED STATES FEDERAL DISTRICT COURT- ROOM 205 –DECEMBERL 1, 1995-MORNING

Judge Anna Willis opened the trial and the prosecutor first witness was Charles Localle an insurance agent for Ravenswood Insurance Company.

PROSECUTOR
Mr. Localle did your insurance company insure the guards for State Security?


LOCALLE
Yes.

PROSECUTOR
How many guards did you insure?

LOCALLE
Two hundred!

PROSECUTOR
What was the premium for two hundred guards?

LOCALLE
Seventy-five thousand dollars payable every six months!

PROSECUTOR
State Security had over four hundred guards how much more would the premium be?

LOCALLE
Approximately two hundred twenty-five thousand every six months.

PROSECUTOR
Thank you.

The government next witness was IRS agent Tom Dart.

PROSECUTOR
Did State Security file income tax returns for 1991, 1992 and 1993.

` DART
No sir.

PROSECUTOR
How much does State Security owe the IRS?

DART
Approximately five million dollars!.

PROSECUTOR
Thank you.

The next witness was Christopher Luden

PROSECUTOR
What is your position with the Chicago Housing Authority?

LUDEN
I’m the Director of Contract Security and the Police Department.

PROSECUTOR
What are the duties of Contract Security?

LUDEN
To assign and monitor the contracted guards to ensure they are on their post, armed and properly licensed.

PROSECUTOR
When you say properly licensed, what do you mean?

LUDEN
The state of Illinois requires everyone working as a Security Guard to hold a state-certified Security Officer License and Illinois PERC Card during the duration of their employment. Before you can apply for a Security Guard License in the State of Illinois, you have to obtain your Illinois PERC Card. A Perc Card is a document to inform your future employers that you have passed a Criminal Background Check through fingerprint submission. This way they are assured that you have not committed any felonies. Anyone who wants to apply for any type of security related work in the state of Illinois must first obtain his Illinois PERC Card. If you do manage to get hired as a security officer without holding a valid PERC, you and your employer risk heavy fines. Here’s a breakdown of the requirements you have to meet to apply for your Illinois PERC Card: Applicants must be at least 18 years of age – 21 for armed security guards. a US citizen or have a US work permit, have your fingerprints taken through electronic fingerprint processing by a Live scan Certified Vendor and they must have TAN card indicating they are authorized to carry a firearm.

PROSECUTOR
What happened if the security guard were not on his post, not armed or didn’t have the proper credentials?

LUDEN
The guard company wouldn’t get paid for that site and an infraction report would be submitted by the coordinator.

PROSECUTOR
What is the job of the coordinators?

LUDEN
The coordinators monitor sites that contain guards and if they find an infraction they submit a report to the time-keeper who deduct the money paid to the company.

PROSECUTOR
Was John McBride one of your coordinators?

LUDEN
Yes!
PROSECUTOR
You said your department assigned the guards, will you tell the jury how that worked?

LUDEN
After a building was swept I would get a call from CHA headquarters to supply guards to that location.

PROSECUTOR
What is a sweep?

LUDEN
A sweep is an inspection of a CHA building to identify the lease holder, remove unauthorized people living in the building, make repairs and secure the building with private security guards.

PROSECUTOR
What would you do then?

LUDEN
I would contact the guard company with the least amount of guards and ask them if they wanted the building, if they refused I would then go to the next company with the least assigned guards until I found a guard company who would take the assignment.

PROSECUTOR
When would you contact State Security?

LUDEN
State had the most guards so they would be contacted last after the other guard companies refused.

PROSECUTOR
Did State Security ever refused?

LUDEN
No!

PROSECUTOR
How many guards did State Security have providing security at CHA building?

LUDEN
They had over three hundred private security at 42 CHA buildings.

PROSECUTOR
What would happen if all the guards company refused an assignment?

LUDEN
(smiling)
I would have probably been fired, thanks to State Security that never happened.

PROSECUTOR
Thank you, sir.

The next witness was Hosea Rodriquez

PROSECUTOR
Mr. Rodriquez was you employed by State Security?

HOSEA
Yes!

PROSECUTOR
What were your title and duties?

HOSEA
I was a vice president and I was responsible for the deployment of the guards and reviewing the inspection reports.

PROSECUTOR
Have you been given a grant of immunity for your testimony and cooperation in this investigation?

HOSEA
Yes!

PROSECUTOR
Do you know John McBride?

HOSEA
Yes!

PROSECUTOR
How!

HOSEA
He was a coordinator for contract security.

PROSECUTOR
Did you agree to pay John a thousand dollars a month to overlook some of the infractions by your guards?

HOSEA
Yes!

PROSECUTOR
Did you have to get authorization to make the payments to John?
HOSEA
Yes!

PROSECUTOR
From whom?

HOSEA
Susan!

PROSECUTOR
Tell the jury how the ghost pay-roller scheme worked.

HOSEA
If a guard quit we would get his check and cash it.

PROSECUTOR
Did Susan or Robert know of the scheme?

HOSEA
Susan knew.

Susan jumps from the defense table and screams, “Lier, Lier.”
The judge admonishes her.

PRSECUTOR
Did you have a romantic relationship with Susan?

HOSEA
She tried to seduce me but she was too old for me.

PROSECUTOR
Thank you.

The next witness was John McBride.

PROSECUTOR
Have you been given a grant of immunity for your testimony and cooperation in this investigation?

MCBRIDE
Yes!
PROSECUTOR
Did you receive a thousand dollars a month to overlook irregularities by State Security guards from Hosea Rodriquez?

MCBRIDE
Yes sir.

PROSECUTOR
Were any other employees of CHA involved in the bribe?

MCBRIDE
No sir.

PROSECUTOR
Why did you report the bribes to the FBI.

MCBRIDE
They had arrested my younger brother for dealing drugs and I hoped if I gave them Hosea, they would go easy on my brother.

PROSECUTOR
Did they?

PROSECUTOR
No, they lied to me and he was sentenced to twenty years.

The government rested their case and the defense only witness was Robert.

DEFENSE ATTORNEY
Robert what was your involvement with State Security?

ROBERT
Unfortunately I wasn’t too involved with the day to day operations of the company I left most of the operation to Susan and Hosea while I tried to get more security contracts.

DEFENSE ATTORNEY
Did you know anything about the bribes, ghost payroll fraud, failure to pay income taxes or insurance fraud?
.

ROBERT
No!

DEFENSE ATTORNEY
No further questions!

PROSECUTOR
Mr. Malkowski is you telling this jury that you was unaware of all these charges and you had little input in the operations of a company that was making over fifteen million dollar a year company.

ROBERT
(lowering his head)
Yes sir.

PROSECUTOR
No further questions.

The judge read the jury their instructions and they began their deliberations. After two days of deliberations the jury returned with a guilty verdict on all charges for Robert and Susan Malkowski. Three week later the judge sentenced Robert and Susan to seven years in a federal penitentiary, confiscated their home, vehicles and bank accounts.


Judge Anna Willis removed her eyeglasses and looked over the bench at the two middle-aged couple standing before her. Susan Malkowski Italian, thirty-five, very dark with dark eyes and dark hair. She was about five-three, slender but had extra large breast. Robert was ten years older, Polish and stout, the judge shuffled some papers and began reading.

JUDGE
Robert and Susan Malkowski you have been found guilty by a federal jury of numerous crimes, I shall read you these charges before announcing my sentence: Income tax evasion, frauding the insurance companies you engaged, ghost pay-rolling, diverting and laundering funds of over $800,000 in fraud proceeds, over billing,. Medical Fraud in that you was hospitalized during the trial for a period of four days at Ingalls Medical Center in Harvey, Illinois for a collapsed disc. Your treating physician Dr. Daniel Kimball had several conference calls with the court, US Attorney and your attorney. His diagnosis was a collapsed disc and you were medicated with Dalaudin and Norco, two powerful narcotic pain medications. MRI tests conducted at the hospital by showed several physical problems but the government brought in a Doctor Martin Land, M.D. and he testified that you were malingering and or faking the illness, after that your bond was revoked. The government has stated in their briefing memo that you attempted to obstruct justice by delaying trial through faking your illness and bribing a public official.

At the end of the day, your single biggest problem was trying to supervise the Rodriquez brothers. Basically the Rodriquez brothers were in business for themselves along with John Esters and other employees and they pretty much did as they pleased. The single biggest issue was geography. While you and Susan were largely based out of the far north side of Chicago, the Rodriquez brothers worked on the far south side office on 47th street office where the majority of the guards worked, where the CHA buildings were and everything of substance that occurred happened on the south side. The Rodriquez brothers were trusted employees and officials of your company.. The nature of contract security work at the volume that you were operating is one of poor receivables and never ending overhead and payroll. Clients who are government entities are notoriously "slow payers" in paying invoices to private contractors. This is a good thing for the CHA and a living breathing nightmare for anyone who has to make payroll every Friday, no matter what the issue. Robbing Peter to pay Paul is quite common for private contractors. I sentence you both to seventy-two months in a federal penitentiary to be determined by the Federal Bureau of Corrections.

The judge banged her gavel and walked out the court room. Robert was handcuffed behind his back by a United States Marshal and led to the exit door in the rear of the court room. As they were leaving he looked at Susan who was in tears as she was being handcuffed, she blew him a kiss but he turned his head.
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INT. METROPOLITAN CORRECTIONAL CENTER-CELL 3A- April 2, 1997-MORNING

Robert Malkowski sat on the bed in his six-by-six cell and wondered what had happened. How he had been just a fool. He remembered the Director of Contract Security asking him how could he let two uneducated brother run a multi-million dollar company, the reasons were very clear now. Robert and five other men boarded the US Marshal Office van at five in the morning for the nine-hour drive from Chicago to Duluth Minnesota. Robert looked out the barred windows and noticed all the high-rise office buildings in downtown Chicago. The Van turn into Interstate 94 West and ten am the van