Fake Liabilities (1)
"Huh? Looking at this, it's clearly that."
Rhea did not disappoint.
I had spent the entire night wrestling with the problem, and she had only needed a few quick glances through the documents to land on the answer. A chill ran down my spine.
As expected of the uselessly competent Rhea.
"What is it?"
I asked, eyes gleaming with swelling anticipation.
"Accounting fraud via fake liabilities."
But the triumph was short-lived.
A-accounting what now?
The sudden blast of technical jargon made me furrow my brow before I could stop myself.
Rhea looked flustered, her eyes darting this way and that, before she cleared her throat awkwardly and tried again.
"Uh. Well. Tax evasion, basically."
Ahem. Would it have killed her to say it that simply from the start?
Inwardly stung, I nodded as if none of it had fazed me—as if I had known all along.
"Excellent. But what you've just said is something I had already anticipated."
"Huh?"
"Ahem! What I want to know is how the nobles used loan sharks to evade their taxes."
"Accounting fraud via fake liabili—"
"In other words, I want the finer details. I want to know why you reached that conclusion."
Faced with my shameless ironclad front, Rhea scratched the back of her head.
"Are you testing me right now, sir?"
She muttered something under her breath, then bolted out of the room and came rushing back with an enormous sheet of parchment.
Whoa. That stuff is ridiculously expensive.
Where on earth had she gotten her hands on it?
The question had barely formed when Rhea cleared her throat and began writing the names of the loan sharks from the list across the top of the parchment.
"Right. So if a noble is in difficult circumstances or hard times, they can receive a tax exemption, correct?"
"That's right. But because some people might abuse that, we conduct a tax audit as a matter of course."
"Exactly. And that's why they need the loan sharks."
When I offered a suitably encouraging response, she continued with growing confidence.
"Say a noble doesn't want to pay taxes and decides to evade them. To do that, they still have to pass the tax audit cleanly. So they go to these loan sharks and create fake liabilities—pretending they borrowed money."
"So they never actually borrowed anything, but they draw up a false contract claiming they did?"
"Yes. The contract specifies the loan amount, the repayment deadline, the interest rate, and so on. That lets the nobles add loan-related entries to their ledgers."
"And every last coin of it goes straight into their back pockets."
I clicked my tongue in genuine admiration.
I had never even heard of a tax evasion scheme this inventive—and the fact that Rhea, with so little field experience, had seen straight through it in a single glance was almost harder to believe.
"Once the ledgers are complete and the money has been siphoned off, they can sail through a tax audit without a scratch."
"Accounting fraud via fake liabilities… what a mouthful of a name."
"They fabricated the debt, so it's a fake liability. They entered it into the books and accounting records, so that's recognition. And they dressed the books up to look worse than reality, which is accounting fraud. Put it all together and you get accounting fraud via fake liabilities."
Her report was flawless from end to end. I had no choice but to applaud.
But Rhea apparently still had more to say.
She suddenly began connecting the loan sharks' names on the parchment with lines.
"Furthermore, multiple nobles and loan sharks can create a structure of exchanging liabilities among themselves, clouding the eyes of whoever comes to audit them."
"And what does that mean?"
"A loan shark lends money to a noble—on paper only. Then that noble passes the money along by 'lending' or 'repaying' it to another loan shark or noble. And the last person to receive it funnels it right back to the original loan shark."
"Why does it have to be so complicated?"
"Right? The auditors have to chase the money trail by going around asking this person and that. The more tangled the flow becomes and the more twisted the relationships get, the more impossible it is to find an answer."
This was a completely different animal from the work the Intelligence Bureau handled.
Hauling someone in and beating a confession out of them would accomplish nothing.
If the money was being passed around like this, you would have to arrest every single person involved—and the people who pulled these schemes were usually nobles with real clout.
Easy to say, disastrous to attempt. One wrong move and you would be the one getting crushed.
And if some of them had genuinely borrowed money because they were in genuine trouble, you risked sparking a backlash across the entire noble class.
As I turned the problem over, a new question surfaced.
"But even a fake loan needs a pretext, doesn't it? If they claim they borrowed money for no reason at all, won't the audit catch them?"
Exactly. So under what pretext were the nobles borrowing from the loan sharks?
Rhea thought hard for a moment before answering.
"You can invent whatever you need, can't you? You could say you got scammed and needed the money. Or that you borrowed it for drainage repairs on your estate, or wall fortifications—that sort of thing."
"So in reality they do a half-hearted show of the work and then lie about having spent a fortune."
"Yes. If you want a pretext, you can manufacture as many as you like."
"Then what do the loan sharks get out of it?"
"That would depend on the situation. They might take a cut of the evaded taxes as a fee, or secure a promise of support for some particular venture."
Well, of course the loan sharks weren't cleaning up after nobles for free.
They had been feeding each other all along—give a little, take a little.
"Sir… this is only my personal opinion, but I don't think we should take this case."
I had been clicking my tongue in disgust when Rhea, finished with her report, suddenly shook her head and voiced her concern with careful hesitation.
"Strictly speaking, this isn't a malicious tax delinquent problem, so it isn't even our jurisdiction. Securing hard evidence would take an enormous amount of time and manpower. And if we make one wrong move, we could arrest the wrong person and blow the whole thing wide open."
"Hmm…"
"People who evade taxes this systematically aren't fools. They deliberately mix in ordinary, innocent people as decoys along the way."
"That's very possible. But this is an imperial command."
"Aigoo, why do we always end up with—wait, what?! W-what did you just say?!"
"It isn't an official order, but you can think of it that way."
"Hic!"
At the words imperial command, Rhea clamped both hands over her mouth and hiccupped violently.
Her face had gone deathly pale for good measure.
You think any of us are doing this because we want to?
Looking at her, I could only heave one heavy sigh after another.
Is there any way to land a solid blow on Elena without crossing the Emperor?
This job was extraordinarily difficult.
No—it might be outright impossible by any normal method.
There had to be more than a handful of people tangled up in this. Was it even remotely realistic to drag them in one by one, secure statements, and pin down the evidence?
At this scale, even the Emperor would struggle to intervene directly unless it rose to the level of treason.
Which was why he had quietly handed the investigation to the Intelligence Bureau.
And thanks to Elena, it had rolled all the way down to me.
So what kind of chaos could I possibly stir up from here?
More precisely—how could I thrash Elena so thoroughly that she would never dare pull a stunt like this again?
The Emperor already has enough headaches over the treasury. He won't want to get dragged into a fight with the nobility. Which means all he really wants is the money.
I thought, and thought again.
At this point, I was almost impressed with myself for still plotting chaos in the middle of all this.
Honestly, with this much effort and grit, wasn't I overdue for a resignation letter being accepted?
If the Emperor is satisfied, everything else falls into place. So what if I arrange things so the nobles' arrows fly at Elena instead of the Emperor?
And then, in a sudden flash, a brilliant idea struck me.
They're committing illegal tax evasion. So why am I obligated to investigate them legally?
Right. The Emperor had only unofficially stamped a seal through the Intelligence Bureau and Elena anyway.
And not even on a detailed brief—just a document listing the loan sharks' personal information.
So all I had to do was bring back the money the Emperor wanted.
And every scrap of backlash and responsibility that followed would naturally land on Elena, wouldn't it?
Which meant Elena would inevitably come under external pressure to fire me.
No need to play along with the board they've set. Just flip the whole table.
Strike while the iron is hot. The moment the thought settled, I grabbed my coat and prepared to head out.
"S-sir? Where are you going?"
Alarmed by my sudden movement, Rhea caught my arm and asked in a rush.
Her face said she was already dreading whatever nonsense I was about to attempt this time.
"Senior Secretariat Rhea. Do you know the first thing you do when you want to catch a spy?"
"Sir?! What are you—"
"You figure out the spy's methods. And the most effective way to figure out those methods is…"
I let the sentence trail off with a faint smile.
Horror drained the color from Rhea's face.
I paid it no mind, patted her on the shoulder, and finished.
"You just ask another spy."