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Cash float
The story of a secret warehouse that kept the city stocked with greenbacks during the storm.
Aaron Elstein @InTheMkts
Published: March 31, 2013 - 5:59 am
Jamie Lopez wasn't as alarmed as some people were when
Superstorm Sandy slammed New York. He'd seen his share of
crises during multiple tours of duty in Iraq and Afghanistan.
Still, the timing could have been better. The storm struck on
just his third day as executive director for Northeast operations
at Garda, a Montreal-based security and logistics company
responsible for keeping 5,000 of the area's ATMs filled with
cash. "I remember thinking this was my indoctrination by fire—
or, actually, by water," recalled the 29-year-old Mr. Lopez.
The water flooded his company's warehouse in Long Island
City, Queens, where nearly all of the city's banks stash
hundreds of millions of dollars worth of cash. Computers were
fried and many of his 500 armored-truck drivers and security
guards were stranded at their homes. His phone was ringing off the hook from banks demanding to know when his crew
would be delivering $20, $50 and $100 bills to their ATMs, because large parts of the city had reverted to all-cash
economies and the banks didn't want to seem ill-prepared.
"I told my team: We are essentially the cash flow for New York City, and we are the ones who are going to bring the
money that people need to pay for emergency supplies," Mr. Lopez recalled. "We felt a real sense of urgency."
It's fair to say this mission was accomplished.
In the days and weeks after Sandy, when power outages and gasoline shortages panicked millions of New Yorkers,
Garda, Brinks and a handful of other companies carried out the vital task of keeping money moving. With few
exceptions, consumers who could find a functioning ATM found there was money in it, even though millions in
contaminated cash was being taken out of circulation and destroyed.
The ready availability of cash might sound like a small thing. But as New Yorkers have learned over a decade's worth of
disasters—the 9/11 terrorist attacks, the 2003 blackout, Hurricanes Irene and Sandy—nothing calms the mind during a
crisis like cold, hard cash in hand.
"So long as cash is there, people are comfortable," said Robert Kraus, vice president for cash and custody at the

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Federal Reserve Bank of New York. "If it isn't, they panic."
ADVANCE PLANNING
Here's how important cash became: Days after the storm, a prominent nonprofit arts organization about to make payroll
notified Bank of America that it wouldn't issue checks because employees wanted to be paid in cash. BofA's New York
market president, Jeff Barker, ordered an armored truck to deliver $100,000 to a Manhattan branch.
"It was a pretty unusual thing," Mr. Barker said, "but those were pretty extraordinary times."
One sign of how well Mr. Lopez and his team did in helping to keep the financial system functioning is how little
comment their work has spawned. Hurricane Katrina, admittedly a more destructive storm, generated a flurry of hand-
wringing reports from regulators examining what went wrong at the banks. One postmortem lamented: "The
unprecedented magnitude and duration of the effects of Hurricane Katrina caused major disruptions that exceeded the
scope of the disaster recovery and business continuity plans of some financial institutions."
Yet the reliability of New York's financial system during Sandy appears to have come up only once, at a Dec. 3, 2012,
meeting of the Financial Stability Oversight Council, a group of the nation's top banking regulators. According to the
minutes, the director of the Treasury Department's office of critical infrastructure protection and compliance policy stated
that "individual organizations and the financial sector as a whole performed well during the storm, particularly given the
magnitude of the event."
One reason banks "performed well" is that regulators have been demanding that they prepare for catastrophic events
ever since 9/11. During the past decade, banks have spent billions on backup computer systems and remote facilities to
keep the financial system working during a serious disaster.
It also helped that everyone knew Sandy was coming and that global banks like Citigroup had employees who were
close to the storm warning of its danger.
"You look at the toll taken down in Jamaica and the Bahamas, places used to these types of storms," said John
Odermatt, head of the emergency management office at Citi. "When we saw that, we decided to take preventive
measures."
For Citi and other big banks, that meant booking hotel rooms for key personnel, particularly those who worked at lower
Manhattan trading floors in the heart of Zone A. (Markets overseas kept going even though the New York Stock
Exchange closed for two days after the storm.) The banks also started calling the New York Fed and ordering lots of
extra cash for their ATMs.
An extraordinary amount of legal tender poured into Garda's Long Island City warehouse in the week before the storm.
Helpfully, three days before Sandy, the Fed waived fees charged to banks for moving money around the country and
extended the hours of its vault in East Rutherford, N.J., so Garda and other armored-truck operators could pick up
pallets of cash.
When the storm hit Monday, Oct. 29, Mr. Lopez said, Garda's vault was "bursting" with money. New to the job, he asked
staffers if the surge was unusual and was told no one had ever seen anything like it.
"It was hard to walk around," he recalled.
Like the banks, Garda had a disaster-preparation and recovery plan. The company secured generators and had a
skeleton security staff in place when the storm blew in Monday afternoon. But even the most meticulous plans didn't fully
prepare them for what happened.

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Buck Ennis
Garda’s Jamie Lopez spent three nights in the logistics firm’s
parking lot.
Garda's warehouse, located next to the East River, took in two feet of water, with the worst damage in the coin-storage
room, where the 70-year-old building's floor buckled. It took 12 hours to pump out the water and wait for the tide to
recede.
In addition, armored trucks were paralyzed, forklifts didn't work, elevators were shot and, though the technology staff
managed to connect to a server in Central Islip, L.I., the handheld devices used by truck drivers to record cash pickups
and drop-offs were useless. They had to use paper.
"It's a good thing we kept around a big supply of carbon-copy sheets," Mr. Lopez said. "We were writing down everything
by hand."
To ease the shortages in staffing and trucks, Mr. Lopez's boss, a former senior New Jersey state police official named
Vince Modarelli, summoned employees from as far as Oregon and ordered a dozen armored carriers from Cincinnati.
He also bought every drop of fuel from a gas station in Fairfield, N.J., and, to procure even more, reached out to a bank
with important connections in the energy business.
MONEY LAUNDERING
Then Garda began looking for hotels for employees carpooling
into work. Area rooms were booked solid with Wall Streeters
or people planning to run the New York City Marathon, which
was ultimately canceled. Garda staffers made do, staying in
trailers in the parking lot. Mr. Lopez, who lives in Hoboken,
N.J., said he slept in one for three nights.
The warehouse was functioning again by Wednesday
morning, about 36 hours after the storm hit, just in time for a
city that was starting to grasp Sandy's immense damage.
Thanks to the company's contacts with law enforcement,
police agreed to open roads so Garda drivers could reach
banks and replenish ATMs—or, in some cases, clean them up.
Cash soaks up water like a sponge, and must be destroyed
when contaminated by chemicals or other waste in floodwater.
Garda staffers trudged into waterlogged banks wearing
biohazard suits to recover the money, which was dried in
rented commercial driers at a facility in Wilmington, Del., before being returned double-bagged to the Fed.
"It was kind of like taking tens of millions to your local laundromat," Mr. Modarelli said. It took two months to dry all the
cash.
Meanwhile, in the days after the storm, banks like BofA, Chase and Citi loaded vans with portable ATMs and ambled
around blacked-out parts of the city so consumers could withdraw money. Some banks found portable generators to
power ATMs at their branches. (About a dozen damaged branches run by the biggest banks have yet to reopen.)
For Mr. Lopez and his crew, the post-Sandy cash emergency lasted about two weeks. Twice daily, a 53-foot-long trailer
emerged from Garda's unmarked building in Queens and headed to the New York Fed's outpost near MetLife Stadium
before returning stuffed with money. Bank branches or ATMs that ordinarily posted orders once or twice a week were
making requests every day. The extreme demand lasted until mid-November.
"This was a real test, and we were running 24/7," said Mr. Lopez, who left the U.S. Army with the rank of captain. "I don't
think most people realize how hard it was."

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