Chapter 30
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Robert E. Lee White sat up as straight as possible in the chair. He straightened his bad leg as much as he could. Bob usually moved with a nearly languid grace. His movements were stiff now, planned and jerky. He was exhausted, hurting bad and trying not to show it. Bob pushed to his feet, excused himself, smiled at Alice, letting the tips of his fingers brush the back of her arm as he made his painful way toward the men’s room.
Alice’s arm goose-pimpled at his touch. She shivered. As she watched him walk away, she asked Jack, “What’s wrong with his leg?”
As with most jocks, Alice had a deep understanding of people with disabilities. She’d blown out a knee and took a brutally disciplined year getting back to contest form.
“He was wounded in combat while serving in the Army during the first Desert Storm Campaign. Bob’s a private man. He’s the best man I know. When you know him a little better, ask him about his leg,” Jack said.
Alice shrugged and sat, quietly waiting, more comfortable in her skin than anyone else he knew. Maybe that was why she was so strong. She didn’t ask her body to do anything it wasn’t capable of doing. They sat, waiting for Bob, Jack fidgeting and bouncing, Dvora looking strained, going over her notes repeatedly, Alice almost napping, and Lee looking as cool and relaxed as anyone could possibly be.
Years ago he and Alice sat down for a drink after work. One drink had turned into three and pretty soon they lost track, which was rare for both of them. They were conducting an unofficial wake for a deal that would have made a bunch of people a whole lot of money. The deal would have meant financial freedom for six hundred ethnic Chinese in what used to be North Vietnam. One of the French principals in the deal died. His heirs didn’t have the brains and balls to go through with the deal.
Three straight weeks of eighteen-hour days, too much jet lag, and the booze had Jack and Alice telling a lot deeper level of the truth than they were normally comfortable with. Alice talked about how she became who she was.
“I wanted to be one of those thin little cheerleader types so bad it hurt. You know the ones. Big tits and no brains and all the boys want them. I’d starved myself down to nothing and flunked a couple tests I could have passed drunker than this. I was in the back seat of this boy’s BMW, getting ready to fuck his brains out, when it hit me.”
She looked up from the drink she’d been stirring with her finger and leaned forward, until hair covered most of her face, her eyes twin fire from the shadows.
“You can’t know how it is to be a teenage girl. You want to fit in so bad you are willing to do anything. Who your friends are, who likes you and who doesn’t, who you hang out with at lunch, are the most important things.”
She sat back in her chair, looking far into the past. “So there I was, in the back seat, when I realized he wasn’t what I wanted. I left him sitting in the back seat of that BMW with all the hard-on he could get after five beers, and walked the four and a half miles home. On the walk that night I decided I’d never do anything ever again just to fit in.”
Bob’s return broke everyone out of their reverie. Bob walked back to the table and lowered himself into his chair with his arms. He glanced through his three-by-five cards to make sure everything was in order.
“If Jack says our boy Donald is a liar and a thief, then he must be one. So, I set myself down to think like a liar and a thief-a real smart, well-educated one. A thief has to keep records of his ill-gotten gains. It would be an embarrassment with the IRS if he didn’t keep ill-gotten gains separate from the fruit of honest labor.”
Bob reached out and turned over the top three-by-five card, pausing long enough to practice his grin on Alice.
“First thing I did was a little dumpster diving. Even smart folks can be downright stupid about garbage, thinking once you throw something into the trash it plain disappears off the planet. I didn’t find much in Donald’s trash. I did find a copy of a deposit slip to one of his personal accounts that somehow missed the shredder. That was the first key to his personal financial dealings.”
Bob turned over another card, barely glancing at it. “I followed Mr. O’Hare all day Tuesday and yesterday. Early this morning, after he left for work, I entered his house. It wasn’t easy. Apparently there was some mix-up in the work order I carried in my pocket to do a threat assessment of his security system. For some reason I didn’t have the right alarm codes, and the key I had been given didn’t fit properly.”
He smiled at his own joke. He could brave his way past any misunderstanding of a breaking and entering charge by firing the employee who had made the mistakes. He could always rehire the employee later at a higher salary. Mistakes happen.
“Mr. O’Hare’s dogs were restless, edgy. This is usually a sign of an upset or ill owner. His alarm system is real good. I got a little overconfident when I bypassed the first alarm. I almost didn’t see the backup that wasn’t on the records I managed to find.”
Bob sat calmly in his chair while he spoke of things that would make most men crap themselves. He told his tale of sneaking through the house, rummaging through file drawers and desks, avoiding dogs, and feeling his way through closets. He told the story as if he were describing a day at the actuarial office, running probabilities of this or that through a computer.
“Eventually, I got a look at all the records he kept in his house, bank and brokerage, medical, Christmas list, taxes and so on. Everything looked neat and tidy. Most of his records were computerized, as you would expect, making it easier. I added a little gadget to his cable modem so now we are looking at his screen every time he fires up his computer. We copied all of his files.”
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He paused for another slug of Mountain Dew. “I almost didn’t get a chance to check his iPad. He managed to misplace it for a while, unknowingly, while he was out to lunch at a restaurant earlier today. The folks who found his iPad gave it back to him, after having to figure out the password so they could make sure the iPad got back to its rightful owner.”
Bob leaned forward, his notes forgotten. “Jack, you know I love a puzzle. Instead of the crossword this morning, I puzzled on this. There are two good ways to hide a thing. The first is to leave it looking like what it is and put it somewhere it won’t be found. The second is to disguise a thing just a little and leave it out in plain sight. Every record Mr. O’Hare had looked above board and clean. It was in his personal business expenses, out of that iPad, where I found it.”
Bob pushed himself to his feet, leaned heavily on his cane and walked to the eraser board. “I should have seen it right at first, but I missed out on a little sleep over the last few days.”
He wrote “Laundry Expense” across the top of the board and then listed ten shorts at $1.80 and three pants for $73. Then he wrote six tops totaling $17.50 and five double breasted suits for $34.12.
After the first two numbers went up, Alice whipped through her notes, shouted, “Yes!” throwing a punch into the air.
Bob walked over to stand by Alice again and said. “I pulled up the stock histories I’d stored. Sure enough, with a little work they matched.”
“Alice, could you put up the screen back six pages from when you stopped?” he asked, not having to refer to his notes.
She did as he asked.
“Ten shorts on the 2nd of July, matched the closing price of a March twenty put option on ReWire. The entry for pants on June 26, matched the heavy short sale volume of Eco-Plan at exactly that price. Six tops at $17.50 on August 16, translated to heavy short volume on Genotopian at that price on that day. $34.12 for six double breasted suits matched the price for exceptionally heavy short volume on Double Helix on September one.”
Bob bowed from the waist as Alice stood and applauded. He sat down, his face sagging as he let the exhaustion of his last few day’s labor show.
“Here is the kicker,” he said. “This recording is from his house-picked up just two hours ago.” He gently placed his phone in the middle of the table and tapped the screen button.
The telephone rang five times before the heard a woman’s voice, “You have reached 555-1795. We are unable to come to the telephone now. Your call is important to us, so please leave a detailed message. We will return your call when possible.”
Bob tapped the screen again, pausing the recording and said, “That’s the wife,” tapped the screen again and the recording restarted.
After the beep they heard, “Mr. O’Hare, this is Harold Brown of the International Bank of Trade and Commerce. We recently paid a bill from your travel agent. We need you to wire funds immediately to cover costs. There is also a bill from your contractor that requires settlement. Please call 1-345-555-7342 with instructions.”
Bob replayed the message twice. Jack closed his eyes and breathed in the voice. Mr. Brown sounded Australian-at first. On a closer listen, he sounded as if he might be Rhodesian, from what they call Zimbabwe now, or South African. The influence of a good English public school, maybe Eton, softened the harsh, flat vowel sounds of the Afrikaans.
Bob stopped the recording tape after the fourth play-through and said, “I got off the telephone a few minutes before the meeting. According to the folks at IBTC there is no Harold Brown working at the bank. The number is not a listed bank number. I called this number from an Internet phone with a Florida number that we buy anonymously through two different levels of brokers in Romania. Someone answered the phone by repeating the last four digits of the number. No amount of smooth talking on my staff’s part took them anywhere. My question is this: Why would a real smart man like Mr. Donald O’Hare leave someone to put a message like this one on his answering machine? A message his teenage daughter might hear, or his live-in Guatemalan housekeeper, especially when this message mentions settlement?”
The group didn’t have good answers. Jack added to the confusion when he told them of the calls he’d made and how little he’d learned. They were intrigued by the repeated rumors about a non-profit or church having good inside information. He let them know about the rumors. He didn’t let them know they were from Lee. Lee volunteered nothing. They brainstormed for over an hour-more like a tropical depression. Alice had the only idea with merit.
“You know,” she said. “This pattern goes beyond inside information. This is disinformation. We know short sellers hammer stocks in the press to drive prices down. I think what we have here is a brilliant disinformation campaign. I’ll show you.”
Alice pulled up power point pages, checking them against her notes. “Take this news story, back in May. “Genotopian’s stock hit amid rumors that their newest drug will face stiff FDA approval requirements due to flawed test results.” Now look back two weeks before that and see the short activity. The stock is selling at $65, near an all-time high and a whole bunch of offshore trades go in, shorting the stock. The stock gets hammered because of rumor after rumor and drops down to $59, then to top it all, the damn chief scientist and his wife and family get killed in a car wreck. The stock gets hammered down to $47.”
Bob tapped in numbers on his phone while he flipped through his three-by-five cards. He added “Even if these people covered their short positions at fifty and only shorted thirty thousand shares they made three hundred thousand dollars in seventeen days. Look at the puts on ReWire that we think Donald O’Hare played. Let’s say the 10 even stands for ten contracts, though based on the volume it’s probably a hundred. Donald buys at $1.80, the rumor is planted that ReWire’s having quality control problems at the Davis plant and bingo-six days later he sells at $13.00. He’s made either eleven thousand or a hundred and ten thousand dollars.”
Dvora said. “I am going to have to ask you to go slower. Let me do the math, okay?”
Dvora learned through her fingertips just like everybody else. Lee sat close enough for him to watch her do the math just ahead of Alice. Lee didn’t use a calculator. She simply did the computations in her head and wrote down the sums.
After another half hour of number crunching, they wrapped up. “We have found twenty-six more incidents that could be rumor-controlled short selling. Either someone is running a hell of a disinformation campaign or we are being paranoid. The minimum probable profit is eleven million dollars. The high probable profit is forty-seven million dollars and the mean is twenty-six million dollars.”
They had to flip a coin to break the tie; Bob was stuck at thirty-one and Alice at twenty. It was obvious why “they,” whoever they were, picked genetic engineering stocks. The sector moved like smoke on the slightest breath of rumor. But, how were “they” getting all the inside information that wasn’t accounted for by disinformation? And, why had Donald O’Hare suddenly started acting stupid?
Bob had the best answer. “Even real smart people do dumb things. If you get away with something long enough, one of two things happens. Either you get cocky or you want to get caught.”
The last question before they broke up was what they should and could do about the stock manipulation scheme. They agreed to meet again in four days to put an action plan in place. They wouldn’t be able to keep the stocks from getting hammered, at least at first. Later they could certainly make the whole process so expensive the attempted manipulation would become a very painful hobby for someone. Jack almost felt guilty about the truckloads of money they would make: Almost. Dvora left to check on Meghan, agreeing to meet them for dinner.
Jack turned at the door to say goodbye to Alice and Bob. Alice had moved her chair so she was facing more toward Bob, and hitched it closer. He hadn’t heard Bob’s question, except for the rising inflection. He heard Alice answer.
“First I tried the traditional route. I called into their web page from a workstation in the library and used a password generation program. Every three tries, the program kicked me out. I knew the program would set up a trace program so I…”
“Excuse me kids. We are leaving now. We’ll be in touch.”
Neither one of them looked up, instead flapped hands at Lee and Jack and sliding their chairs even closer as they dove further into programmerese. Alice giggled at something Bob said and put her hand on his forearm as Bob laughed out loud. Who would have figured?