Hades

by Russell Andrews

  “We brought you a sandwich,” Justin said.

  Roger looked up, a look of confusion on his face, almost as if he didn’t understand Justin’s words. Then he said, “Oh—oh, thanks. I’m not hungry.”

  Justin waved his hand at the stacks of papers. “Is it that good?”

  “It’s fascinating,” Roger said.

  “Let me just make some coffee,” Justin said, “then you can lay it all on me.”

  He went into the kitchen, turned one of his electric stovetop burners on high, boiled water, and made eight cups of strong coffee, filling his plunger-style coffeemaker to the brim. Roger was not normally the most stimulating teacher, so Justin figured he’d need the jolt. When it was ready, he poured the coffee into the thermos he kept by the stove. He yelled in to ask if anyone else wanted some and got two no’s. Happy to have it all to himself, he poured a mugful and took it back into the living room.

  “Ready,” he said.

  “Okay,” Roger said, and Justin could hear him trying to rein in his excitement. “I can’t say for absolute certain without a lot more studying and possibly even further access to their records, but there’s something very, very strange going on.”

  “Is there a simple version?”

  “I’ve tried to organize this as simply as possible,” Roger said, “but if it was simple, they wouldn’t be able to pull this off.”

  “What is it they’re pulling off?” Jonathan asked.

  Roger spoke to Justin now. “The way a hedge fund works is exactly the way the name implies. It’s one large fund and if you put your money in, you’re investing in that fund as a whole entity. The fund is split up so it can invest in as many different stocks and companies and commodities as it wants to. But it’s one fund. That’s key.”

  “Okay,” Justin said. “I grasp the meaning of the word ‘fund.’ You going to define ‘hedge,’ too?”

  “I am, as a matter of fact. I know you’ve got a business background, but I do remember that that part of your brain is a little, shall we say, rusty?”

  “Sure,” Justin agreed. “Let’s say that.”

  “So ‘hedge’ is also exactly what it means when attached to a fund. It means that at any time you can hedge your bet. You think a stock is going to tank, you can short it.” Roger beamed. He loved talking about his business and nothing puffed him up quite so much as explaining to other people how that business worked. Justin decided this had to be one of the greatest days of Roger Mallone’s life. He got to snoop through another company’s records and he got to explain it all to Justin. “When you short something you’re betting that the price is going to go down. Let’s say you want to short a thousand shares of Company X, which is selling for ten dollars a share. You think it’s going to be selling for half price before too long. So you make a contract that lets you buy it at a later date when it drops to five and sell it back to someone for the ten-dollar price. The beauty of it—and the danger—is that you don’t put up any money. Your broker borrows a thousand shares from someone else’s portfolio. That person usually doesn’t even know they’re being borrowed. The broker just transfers those shares into your portfolio and then automatically sells them back to someone else at ten—and you’ve made your profit.”

  “And if it goes up instead of down . . .”

  “Same thing, only in reverse. You short at five and it goes up to twenty. You gotta buy all thousand shares at twenty—you’ve lost your bet. I know people who’ve lost tens and tens of millions of dollars sinking money into stocks they know will come down. Only they don’t.”

  “How does this apply to Ascension?”

  “Well, if I’m reading this right, and I’m pretty sure I am, they’re violating all the tenets of hedge fund management.”

  Now Jonathan leaned forward. “How so?” he asked.

  “Again, I can’t say this with one hundred percent certainty because I don’t have access to all their accounting records, but it looks as if they’re making separate trades for certain companies that are outside the main fund.”

  “Trading shares to and from the main fund?” Jonathan asked.

  “Exactly.”

  “That illegal?” Justin asked.

  Roger shrugged. “It’s difficult to say what’s legal or not when it comes to hedge funds. It’s not honest. But it’s for the SEC to decide if it’s legal.”

  “It’s not something that would make Ascension investors happy, however,” Jonathan said. “It means they can pick and choose who makes money from their fund.”

  “And here’s where it gets trickier,” Roger said, tapping one stack of papers. “It looks as if they made some of the trades themselves—just transferring funds back and forth between different investors, in and out from one fund to another. And it looks as if some of the trades were made using an outside broker.”

  “Rockworth and Williams,” Justin said.

  Roger nodded. “That’s right.”

  “Is there more?” Justin asked.

  “There’s a lot more. One is that what they’re shorting isn’t consistent at all with a lot of the other trades they’re making.”

  “What are they shorting?”

  “Platinum,” Roger said.

  “Are you sure?!”

  “You want to see my MBA?”

  “No, of course not, sorry. It’s just . . . go on.”

  “Well,” Roger said, “you’re not wrong to be so confused by that. Considering their connections, especially. And their timing is very curious considering what’s going on in the platinum market. And then I have to say, their luck is extraordinarily bad.”

  “What about the timing?”

  “Well, I don’t think there are too many people shorting platinum heavily these days. Not with what’s happening in China.”

  “What’s happening in . . . ?” Justin started to say, then stopped himself. “Cars. Cars are happening, right?”

  “Very good,” Roger said. “Very good.”

  “China’s going into the car business in a big way,” Justin said slowly. He could hear Daniel French saying to him, up at Rockworth and Williams: The wave of the future. Chinese cars . . . Chinese everything.

  “And you can’t go into it in a big way without platinum,” Roger said. “Not if you want to crack the international market.”

  “Right,” Justin said quietly. “Platinum for—what the hell is it—platinum for substrates. Substrates for exhaust devices. It’s all about emission controls.”

  “You have definitely been paying attention,” Roger said. “I’m extremely impressed.”

  “What was the first thing you were questioning, the connections? No, never mind,” Justin said. “I understand that, too. They’re tied to China because of H. R. Harmon.”

  “I know that Rockworth does an incredible amount of business with the Chinese. They’re the envy of everyone on the Street because of their connections. They advise them, they trade for them, they’ve got access to business opportunities no one else can ever get close to . . .”

  “And I’ll bet they’ve put Chinese money into the Ascension hedge fund. Daddy taking care of his kid.”

  “I’d guess that they did. There are a couple of companies on your list that can probably be linked to China. But that’s what doesn’t make sense.”

  “What?”

  “Again, I can’t say for sure, but I think several of these companies are shells. I haven’t heard of them and I haven’t been able to trace them, which makes me think they’re set up as part of a scam. Why would Ascension or Rockworth want to scam the Chinese government when it’s such a big source of income for them? Or, on the other hand—” He stopped.

  “On the other hand what?” Justin asked.

  “If they’re not being scammed, why would the Chinese government want to be part of a scam?”

  None of them had an answer. So finally, Justin said, “All right. That’s the timing and the connections. What about the bad luck?”

  “Well, the platinu
m market shot sky-high recently. Because of the shortage.”

  “A shortage of platinum? Why would that be?”

  “Because of the cargo ship.”

  “Roger, you’ve got to be a little more forthcoming. Miraculously enough, I might know about Chinese cars, but I don’t know shit about platinum cargo ships.”

  “One of them sank. About three weeks ago.”

  “Where?”

  “Coming up from South Africa. Off the coast of Sicily, I think.”

  “How much of a shortage was there?”

  Roger blew out a breath. Meaning: a big shortage. “I don’t remember exactly how much,” he said, “but enough to alter the market. Maybe fifty, sixty million dollars’ worth disappeared. Maybe more.”

  “And they can’t recover it?”

  “Yeah, they’ll get it back eventually. But it’ll take time. And in the meantime, there’s a serious shortage.”

  “And when that happens?”

  “Come on, Jay, it’s like everything else. Supply and demand. There’s a short supply, the price goes up. In this case, it went up a lot.”

  “Has it come back down?”

  “Not yet.”

  “This is unbelievable,” Justin said.

  “It’s totally believable,” Roger told him. “It doesn’t make any sense, but it’s very believable. Especially when you look at the travel documents you gave me.”

  “LaSalle’s and Harmon’s travel destinations?”

  “And the other guy from Ascension, whatever his name is. Fenwick.”

  “You’ve got something from that that ties in to what you’re talking about?”

  “Well, look at where they went.” Roger had that tone that Justin recognized now: the one that couldn’t hide the fact he thought he was talking to an idiot. He patiently listed all the cities and countries that Evan Harmon, Ronald LaSalle, and Hudson Fenwick had visited on business, as if he were talking to a child.

  “What about them?” Justin asked.

  “It’s where they mine platinum. Every one of ’em. Platinum mines.”

  Justin shook his head. “San Francisco? Come on, who the hell mines platinum in San Francisco?”

  “Nobody. But you go about two hours up north to the Trinity River . . . platinum. You fly to San Francisco and drive up. You want to see a map?”

  “How about Palm Beach?” Justin said, almost frantic now. “Harmon and LaSalle were there together. They’re mining platinum in Palm Beach now?”

  “No,” Roger said. “That’s the only one that didn’t make sense, I mean, in the scheme of things. Well, that and Mexico. And, okay, Mexico I can’t connect. But I figured out Palm Beach.”

  Justin was incredulous. “What is it?”

  “It’s not that they went to Palm Beach. It’s when they went there. The third weekend in March.”

  Jonathan began nodding his head slowly now.

  “What am I missing?” Justin asked.

  “No reason you would know this,” his father said. “But the first weekend in March is about the biggest date there is for hedge fund managers.”

  “It’s the Rockworth and Williams hedge fund conference,” Roger said. “Every year. Third weekend in March, at the Breakers Hotel.”

  “What happens there?” Justin asked.

  “It’s where the money is,” Jonathan explained. “Rockworth invites its top clients—and people it wants to woo as clients—so it’s where the hedge fund guys go. They meet, they talk, they drink, and if they meet and talk and drink well, they come away with a lot of that money.”

  “Dad,” Justin said, “does anyone keep a record of who attends this conference?”

  “I’m sure Rockworth does. It sends out the invites.”

  “Do you know anyone there who can get me that list? Immediately?”

  “I can call Lincoln Berdon and—”

  “No,” Justin said quickly. “Not that high up. You know a low-level person there, someone who’d be under the radar, wouldn’t think it strange if you asked for the list? And wouldn’t think to mention it to anyone?”

  “Sure,” Roger said. “I know plenty of analysts who owe me favors, and I’m sure they could get their hands on it, no problem.”

  “Do it.”

  “Now?” Roger asked.

  “Right now,” Justin said. “Please.”

  So Roger made his call. Schmoozed a bit with whomever he was talking to on the other end, then gave out Justin’s fax number. Two minutes later the list was faxed through.

  “About five hundred names on this,” Roger said. “You looking for anyone in particular?”

  “Not necessarily. But I’m hoping I know it when I see it.” Justin took the paper out of Roger’s hands, began scanning down the list. And then he said, “And I see it.”

  He picked up the phone, called Reggie Bokkenheuser. When she answered, he said, “I’ve got our connection to Lenny Rube.” He also told her that her hunch about platinum seemed to be paying off big-time. He explained about the boat sinking and about the shortage of the precious metal in a competitive marketplace. He also told her about the links between all the travel destinations—once again tying into that platinum wheeling and dealing was somehow central to everything else that had gone on. She started to pepper him with questions, but he said he needed to get a bit more info from Roger and that he’d call her later. Then he said, “Wait,” and when she said she was still there, he said, “I know we’re low on the Feebie totem pole, but can you use Immigration and get some info about someone going in and out of the country? And while you’re at it, check into a few specific destinations?”

  “I think we’re still able to do that,” she told him. “Immigration, Customs, they still like us. Who am I checking on?”

  He told her and she whistled in surprise. She said, “Will wonders never cease,” and before he could get annoyed, she said, “Later,” and hung up.

  When he hung up on his end, Justin turned to his father and to Roger Mallone and said, “Leonardo Rubenelli, the head of the New England mob, at a hedge fund conference. And I thought I’d seen everything.”

  30

  Justin spent another hour with Roger and his father as they explained in greater detail the trading aberrations that Roger had spotted going through the Ascension data. It was not incredibly complicated, but there were twists and turns and obfuscations. Roger had isolated companies that had shorted platinum and lost money. Then he isolated companies that had lent their shares to the shorter and had raked in millions of dollars of profit as the price of platinum rose. Early in the scheme, the companies that had taken a bath were Charles Chan & Associates and the Noodleman America Corporation. Roger was disgusted at the names.

  “Hedge fund assholes. They think that kind of stuff is funny.”

  “Chinese companies, obviously.”

  “Yeah, but shells. I’d bet my life on it. They make up the companies and give them fuck-you names. They’re so smug, they like to flaunt their dishonesty. You look at all the companies Enron created before it took its fall, it was the same kind of thing—same kind of stupid, arrogant names.”

  “So the Chinese shells are losing money. What about the companies making a profit?”

  Roger listed them: “Flame Bros. Ltd., the National Beet Growers Association of America Pension Fund, Pinkney & Associates, Rossovitch and Sons, Scarlet Knight, Inc.”

  “Just as stupid,” Justin said. And when his father and Roger looked at him, confused, he said, “Lenny Rubenelli. They also call him Lenny Rube. And Lenny Red. All these companies . . . they’re red.”

  “But there’s still something off here,” Jonathan insisted. “The profits are switched over the past few months. The companies making money on the shorting change at a certain point. Lately the ones taking in the profit are Eggleston Catalytic Converters; Goldman, Inc.; the Tintagel Group; and Silverado Jewelry Association. And the Chinese companies are back to making money.”

  “Because they’ve had shares transf
erred to them in those companies,” Roger said. “And those companies are making money. Lots of money.”

  “And Lenny Rube’s companies are down,” Justin noted. And as he pondered the impact of that statement, he said, “I think we should have some dinner. Or some alcohol, at least.”

  “Excellent idea,” his father said. “I don’t suppose you have a decent wine in the house? Or clean wineglasses?”

  “Hello,” Roger said, a stilted, suddenly polite lilt to his voice.

  Both Justin and Jonathan looked up, wondering why he was saying hello to them. Justin was about to tell him that it might be time for him to take a lengthy break, but then he saw that Roger wasn’t saying hello to them. There was a man standing in the kitchen doorway. A Chinese man. He was standing very still, and it didn’t take Justin more than his first glance to understand that this man was not here for any reason that could possibly do them any good.

  “Give me papers, please,” the Chinese guy said in halting English.

  “What papers?” Roger asked. Then he waved at the records from Ascension. “These?”

  “Give papers,” the man said.

  And Justin said, “Roger, move away from him. Move behind me.”

  “What?” Roger said.

  “Don’t give him any papers and don’t get any closer to him. Move away right now.”

  Roger began to walk toward Justin. Justin glanced toward his desk. His spare gun—the one he hadn’t handed over to Captain Holden—was in the drawer.

  “Don’t try to reach gun,” the Chinese man said, his voice calm and quietly authoritative. “You will not.”

  The room was very quiet now. “Dad,” Justin said, “get out the front door.”

  “Do not move to door,” the stranger said. “Do not try. Will not make.”

  Justin nodded and smiled and did his best to look as listless as possible, and then he dove for the desk drawer and the gun.

  He did not come close. The little Chinese man moved so quickly and with such balletic precision that even Justin had to appreciate its beauty. The man’s left foot planted, and he whirled and his right leg swung in a graceful arc, and Justin’s appreciation of the beauty disappeared in a flash, replaced by a searing pain and the recognition that at least one rib was broken. He doubled over in pain, saw the man relax for an instant, and Justin reached over, grabbed a lamp off the nearest end table and swung it with all his might at the Chinese man’s head. The pain in his chest was staggering, and it was made worse when he connected only with air. The Chinese man had moved effortlessly out of the way. Justin didn’t even see the movement—it was as if he was in one place and then suddenly he was in another—and the man’s leg lashed out again, catching Justin in the same spot in his ribs, and Justin thought he was going to pass out from the fire that seemed to envelop him from within.