Chapter 3
The next few days saw Jim make some visits to a bank in the city to establish a new short-selling account for share trading through the bank’s trading platform. What Jim also realized was that additionally this platform enabled the capacity to trade shares from international markets. He was intrigued to contemplate that this global interconnection may have enhanced his younger brother’s financial reach into California and other parts of the United States where he had mysteriously become very wealthy.
As soon as the new trading account was opened, Jim contacted his own broker and arranged for some of his superannuation fund shares to be sold and the proceeds to be transferred to the new trading platform, even though there might be capital gains implications in several cases. As well, cash reserves were marshalled and similarly transferred so that at the end of three days his new broker account held the required stake of one hundred thousand dollars plus a margin loan to add an extra fifty thousand dollars of security.
By the end of the week Jim was able to phone Peter and tell him that all was in order. Peter advised Jim to go to a shopping centre near the apartment and purchase the non-prescription arthritis pain relief pills, then bring them over to Point Piper after dark as previously discussed, walking the last two blocks to the new apartment.
Peg and Jim arrived at the apartment to find Peter waiting in the foyer. A short lift ride followed and then as well as the aroma of fresh brewed Brazilian coffee, the panorama of the Harbour opened to them through a room-width picture window.
“Wow” said Peg, walking straight through to take advantage of the view.
“Great nest, eh mate?” mused Jim.
“Yeah, not a bad little pad. You can see right across to Manly from here, and Mosman, Taronga Park, and even North Head. Not much moves on the Harbour that we don’t notice” said Peter.
“So, we have the arthritis pills” Jim said, passing the package to Peter. At that point Angelique entered the room, greeted both with a kiss and said it was good to see them again.
Peter gathered the receipt from inside the packet and passed it to Angelique. “Hon, put this in your purse and make sure it stays there until the doctor asks you for it” he said.
“Okay, so what’s the next move?” said Jim.
“No rush. I’ll go through it carefully step by step over coffee.”
At this point Angelique, who had disappeared, re-entered the room carrying a tray with coffee and assorted cakes.
“Thanks Honey. She sure knows how to make good coffee.”
“It’s my French Brazilian heritage” said Angelique as she poured the coffee then sat opposite Peg as though awaiting the opportunity for taking up the small talk from the previous encounter on the boat. But Peg’s mind was elsewhere and with the air of business now enveloping Jim and Peter, not at all relaxed.
“So when do you get to take the special medicine to make you ill?” asked Jim.
“Not so fast mate” replied Peter. “First we have to sell the stock in To Your Health. That’s what we need to go over now. You can’t just dive in and unload more than ten million dollars worth in five minutes without attracting attention. Now I’m also going to explain the other part of the deal. Did you bring the paperwork on your short selling account?”
“Yes, here,” said Peg, handing over a slim file with several sheets of bank account details.
“Now, just as I told you at the restaurant, what I’m going to do is move my funds into your account so you can do all the selling. This way, if they come after me with my recent successful short selling there’ll be no trace of anything unusual in my records. I’ll first be transferring the funds overseas to my account in San Francisco and then my legal representative will arrange for the bank to rewire them to your account. There’ll be a little loss on foreign exchange unless I’m lucky but we need to account separately for each transfer of funds, you know. When we’ve finished, you’ll have some capital gains tax on the profits but we’ll settle all this before we unwind the accounts. Okay, so far?” said Peter.
Peg appeared to be a little stunned while Jim seemed more relaxed as Peter had earlier mentioned something like this arrangement.
“All right, so you want me to sell down the shares of To Your Health until I’ve used up all the reserve backing?” asked Jim.
“Yes, in small parcels such as twenty-five thousand units at a time. At around five dollars each that’ll take you about seventy trades and probably fifteen to twenty days to achieve as long as the share price stays around the present point. It should, because the company is on a ‘buy’ rating from two of the big brokers and ‘hold’ from most of the others. It might even rise while you are selling. If that happens, increase the size of your parcels to fifty thousand until you have them all sold. Okay?” asked Peter. Älso” he went on, I’ve got clearance from my broker against shares he has garnered from several of his larger clients, mainly super funds, against the short selling. He knows about the arrangement and will cover the sales from your account”
“Right, so what happens next?” said Jim.
“My little friend in his secret laboratory will doctor the pills you purchased, minus the one to be flushed down the loo, then ...Port?”
“Don’t mind if I do,” said Jim, “but you didn’t finish.”
“To your Health” said Pete and raised his glass, all four in the room clinking in one motion. “Okay then we fix up the packet of pills so it will look as though it was contaminated before it left the factory.”
“So when do I start selling Pete?” asked Jim.
“Tomorrow, just one parcel to start with. By the time you sell a second parcel over the next few days the additional funds will be in your account to allow you to step up the sales and carry you through to the seventy or so trades. Keep a tally, and copy every sell sheet as you normally would ” instructed Peter.
“If I’m ever asked where the additional funds in my account came from, what do I say Pete?” asked Jim.
“Say that you have a wealthy aunt in America who is leaving you money in her will. You simply asked for an advance on that because you had a feeling that the shares of said company were overvalued. That’s all. No further explanation required. They won’t be able to trace the funds back to me as they’ll initially come from a solicitor’s Trust Fund whose owners wish to remain anonymous. But the chances are you’ll never be asked any questions as the regulators have their hands full chasing bigger fish than you or me” Peter replied.
“Do you want me to keep you informed of the sales?” Jim asked.
“I’ll know anyway. I’ve got the account number here remember, and all I need is the access code. I assume you can give me this?” asked Peter.
“Well I shouldn’t give it to anyone but this is a joint venture, right?” said Jim as he realized how much mutual trust was being exchanged here.
“Precisely, and there’s more of my money at stake than yours, Okay?” said Peter.
Jim duly made a note of the secret password that would unlock the trading account so Peter could monitor progress, and handed it to his brother.
“Thanks mate” Peter said, “you won’t be sorry about this. Now there’s one further point. If you want to contact me, don’t do it from home. Go out and use a payphone and don’t identify yourself when you speak to me. This way, there’ll be no unusual telephone traffic to indicate possible tie-ups. Savvy?”
“Yep.”
“Another coffee anyone?” said Angelique.
“None for me thanks” replied Peg, with Jim a little slower to decline.
“Okay” said Jim, “that’s about it. I’m bushed. Don’t know about you Peg, but I’m ready for bed.”
On the way home Peg expressed a little concern at what they had become involved in but Jim reassured her that all that was happening was that they were joining the class of financial manipulators rather than remaining as the peasant class whose petty incomes were trickled down from on high.
What
neither of them knew was that Pete’s little assistant was hard at work manufacturing a concoction of vile little nasties to be delivered by syringe into more than twenty packets of the target alternative arthritic pain relief medication tablets, each packet purchased by Peter at different stores around the metropolitan area over several weeks prior to the present time but carefully checked for consistency of batch numbers. These bacteria could induce projectile vomiting, severe diarrhoea and in extreme cases, death. They were held in an animal laboratory used mainly for testing for things such as swine fever, equine influenza, foot and mouth disease and like pathogens.
The art of injecting the bacteria safely into the capsules without evidence of external interference was a matter of staying one step ahead of the packaging experts who thought they could foil such sabotage. The clue was in the foil, and particularly on how to puncture the sealed compartments with a hypodermic needle so fine that no trace was visible without a magnifying glass. The external cellophane wrap to the packet could be cut and resealed so only a trained eye would pick the interference. Afterwards, replacing the contaminated product on store shelves was as textbook as any shoplifting artist could design.
The rest was almost like the proverbial toddler in a candy store. Jim’s selling episodes were timed to take maximum advantage of the daily slight fluctuations in the company share price. He noted that sometimes his trades took only moments to disappear from the computer screen and at others perhaps up to an hour or so before the trade was complete. But given the daily volume of share trades in the company there appeared to be nothing unusual about his trades. He did field one telephone call from the platform provider but there was just a minor technicality in one trade that was soon remedied.
The brokers were still recommending the ‘holds’ and ‘buys’ that made the task all the more manageable. It took almost three weeks to dispose of some 1.7 million shares at an average selling point of around $6.15.
Following Peter’s instructions, Jim walked to the neighbourhood store where there was a payphone and called him.
“All ships at sea mate” said Jim.
“Looked pretty good to me JJ. I hope to be recovering from my recent illness by tomorrow night. Just wait by the phone and if I call I’ll buzz three times and hang up, then follow again in a minute with three more. If you get that, start buying back the farm. Okay?”
“Roger, mate” said Jim, thinking how appropriate the concept of farming was to their scheme. It really is just like farming money, he mused.
“Anyway, you’ll be able to watch the tele or listen to the news in the next few days and you’ll know when the storm is coming. We’ll go back to sea for another trip after that. See you, mate” said Peter, this time sounding quite affectionate towards his older brother.
“Wish us both luck” said Jim and rang off.