by Steven Gore
“Where’s that?”
“I don’t know yet. But we’ve got to get there before they do.”
CHAPTER 50
Mr. Gage, you’ve got to stop him.”
Milsberg’s panicked voice wrenched Gage away from trying to project the future from the fragments of a partially known past.
Gage leaned forward in his chair and pressed his phone to his ear. “Stop who from doing what?”
“Matson. If he shuts this place down, I’m out of a job and I’ve got no place to go. Nobody’s going to hire me.”
“What makes you think he wants to shut it down?”
“It dawned on the rat that he can sell the manufacturing equipment and the SatTek proprietary technology to pay back a little money to the shareholders and make himself look better at sentencing time and in the civil suit.” Milsberg’s voice turned sarcastic. “He gets the benefit and all we get is unemployment.”
“Whether there is any benefit depends on what everything is worth.”
“Most of the value is in the intellectual property, but you’d need to ask somebody in the field.” Milsberg paused. “That’ll be tough because of the trade secrets problem. You’ll need to show the material to someone in a position to evaluate it and those would be competitors.”
“Let’s worry about that later,” Gage said. “How far along are you?”
“I’ve inventoried all of the hard assets and a software engineer has just finished working on intellectual property, like the code we developed for the low noise and video amplifiers. He’s put together four or five DVDs.”
“Can you make copies and smuggle out a 20-gigahertz video device? I need them this afternoon.”
Milsberg didn’t answer right away.
“Don’t let me down, Robert.”
Milsberg sighed, then answered. “But you’ll have to watch my back. I don’t think there’d be a big market for The Prison Poetry of Robert Milsberg, CPA.”
Gage heard Milsberg shuffle papers.
“And there’s more bad news. I got a grand jury subpoena yesterday. An FBI agent named Zink dropped it off.”
Gage knew it would be coming. The meeting at his office and the call about Katie Palan showed that Peterson had mastered enough of the case to get it through a grand jury.
“When do they want you?”
“The date on the subpoena is for next Wednesday.” Milsberg sighed. “But that’s not the bad part. There was a target letter attached. I knew there would be, but it’s a punch in the face when you actually see one with your name on it.”
“Did you hire a lawyer?”
“I’m broke. Completely busted. But I was hoping I could just say, ‘I refuse to answer on the grounds of self-incrimination’ and they’d let me go.”
“That’s only about things that really could incriminate you. If they ask you where you stored invoices, you may be required to answer.”
“Damn. I was afraid it wouldn’t be that easy. Maybe that’s why I keep having Jonah dreams.”
“Sounds like you need a harpoon.” Gage thought for a moment. “I’ve got somebody in mind.”
“Hey, Clara. You want to have some fun?”
He heard a laugh at the other end of the line, then: “I take it that means a freebie?”
“What about personal satisfaction? Isn’t that why you left corporate law? Or is that just a line you feed the press?”
Clara Nance was on everybody’s list of the top ten women lawyers in the country. Her real and only satisfaction in life was crushing opponents, and sometimes clients who didn’t follow her orders. Gage had seen prosecutors cringe when she drew her six-foot frame to its full height and announced to the court that she was coming into a case.
“Don’t make fun, Graham. Oprah about wept when I told her my epiphany story.”
“Now you have a name for it?”
“And it’s mostly true. Well, about as true as any of my closing arguments. But enough chitchat. What am I doing?”
“A grand jury target in a securities fraud case. He’s a small fry but he’s helping out in something that’s real important to me.”
“Does it have to do with your pal Jack Burch?”
“How’d you guess?”
“A fresh rumor in the Federal Building.”
“How specific was it?”
“Just that Peterson went to the grand jury with the SatTek case and Burch had something to do with it. Also, somebody spoke to Hackett in the attorneys’ lounge. He was all puffed up like he gets in a big-fee case. He talked about spending a lot of time outside the grand jury room, which means that his guy is cooperating—of course, his clients always cooperate. So what’s new. Who’s he got?”
“The president of the company, Stuart Matson.”
“Who’s mine?”
“Robert Milsberg, the controller. I think you’ll like him.”
“I’ll like him if he does what I tell him, if he doesn’t, I ream him a new—”
“Hey, don’t talk like that about your client. He’s a sensitive guy, writes haiku. Maybe if he gets through this, someday he’ll write you a check.”
“More likely a haiku about how he can’t pay. Who’s the agent?”
“Zink.”
“Ick!”
“What do you mean ‘ick’? Clara Nance doesn’t say ‘ick.’”
“That perverted crotch gawker once spent half a day trying to look up my skirt—from the witness stand, no less.”
“But you wear slacks.”
“Now I do.”
Gage checked his watch after he hung up. Faith was just finishing up a seminar. He left her a message to call him, and his phone rang a couple of minutes later.
“Did they get the test results yet?” Gage asked.
“The infections are gone. Courtney said Jack can go home tomorrow. He’s ready to go. Believe me. The nurses caught him chewing on a leg from that Thanksgiving turkey you sent in. Everyone smelled the stuffing and sweet potatoes from the moment the delivery kid stepped off the elevator. Dr. Kishore thought it was a riot. It was good to see a smile on his face, the way he’s been batted around by doctors.”
“The problem is that he may be making himself just healthy enough to get batted around by the lawyers. Things are heating up on the civil side. Matson thinks it’s to his advantage to shut down SatTek and sell off the pieces.”
“Should Jack’s firm intervene to try to stop him?”
“I won’t know until I figure out whether SatTek is worth more than the sum of its parts, and that means first finding out what the intellectual property is worth. Do you know anyone in the electrical engineering department at Cal who can help me out? Even better, someone who’s retired?”
“And who has a sense of adventure and can keep his mouth shut?”
“Exactly.”
“I know just the guy.”
CHAPTER 51
The ranch-style house on Grizzly Peak Road, high in the Berkeley Hills, was surrounded by a garden so geometrically perfect as to be unnerving. The heavy, gray-haired man who met Gage at the door wasn’t. Seventy-three-year-old retired professor Ben Blanchard, dressed in blue baggy-kneed sweatpants, a coffee-stained white top, and running shoes that had never run, led Gage through a museumlike living room, out a sliding glass door, and through a covered patio to his workshop. A desk and two chairs were jammed into the far corner, heated and partially illuminated by a lone radiant heater.
“My wife calls this The Fort,” Blanchard said, smiling. “She’s not far wrong. The most attractive aspect of academic life is one they don’t list on the employment announcement, an everlasting childhood.”
Blanchard laughed, as he undoubtedly had the four or five thousand previous times he’d used the line. His timing, as he well recognized, was perfect, and Gage laughed on cue.
Gage glanced around The Fort as Blanchard led him to his desk. Apparently unfinished projects seemed to immeasurably outnumber the apparently finished. One on the workbench seeme
d to be close to completion.
“What are you working on?” Gage asked.
Blanchard cast Gage a teasing look. “I don’t know you well enough.”
“For what?”
“It’s top secret.”
“From whom?”
“My wife.”
Blanchard’s conspiratorial pause invited the obvious question.
“And it is…?”
“A real cool garage door opener. Very sophisticated. It practically knows my name.”
“Unless it also opens a missile silo, I’m not sure it qualifies as top secret.”
“It does too.” Blanchard grinned. “My wife thinks I’m fixing the microwave.”
Blanchard knocked papers off a metal folding chair. “Have a seat. You want a beer?”
“Sure.”
Blanchard reached into a half-height refrigerator and pulled out two Budweisers. “I know this is Berkeley so I’m supposed to drink a microbrew, but it’s my fort and I’ll drink what I want.” He handed one bottle to Gage, then twisted the cap off his own. “Faith says you have something top secret, too.”
Gage opened his briefcase and displayed the DVDs and a black plastic box Milsberg had delivered. “I don’t want to put you in a difficult position, but these contain the trade secrets of a defense contractor in Silicon Valley. SatTek.”
“SatTek? Very interesting.” Blanchard pointed at the box. “What’s in there?”
“A video detector for a Hellfire missile.”
A look of delight followed Blanchard’s raised eyebrows. “Even more interesting, but I’m not worried. The Fort is like international waters, and its citizens, of which you are now one, are immune from prosecution.”
Gage laid the items on Blanchard’s desk, then outlined the case that was being framed around Burch and Matson’s efforts to appraise the assets of SatTek.
“I need to understand what their intellectual property is worth, but it may be a little complicated to figure out. Not only do they produce offensive devices like video detectors, but they also manufacture defensive ones, like bi-static radar and acoustic amplifiers.”
“I know exactly what you’re talking about.” Blanchard tapped his forefinger on his desk. “If we’d had those devices along the border between Afghanistan and Pakistan, Osama bin Laden never would have escaped. You can pick up the sound of a sandal stepping into sand.” He shrugged. “Of course, there was no way the U.S. would’ve let Pakistan have anything this sophisticated. They’d use them against us someday.”
Blanchard stood up and began to pace.
“I can tell you this right off. The technology for these products is hugely expensive to develop. First, because it uses embedded software, burned into the hardware, that allows a device to respond on its own to stimuli in the environment. Very, very sophisticated. And second, because it has to interface with large, complicated systems, and device failures can reverberate throughout with catastrophic results. So there’s no room for error.”
Blanchard realized that he’d begun lecturing and sat down, substituting gesticulating for pacing.
“The applications range far beyond what SatTek was doing. From cell phones to nuclear power plants—”
“And Dr. Blanchard’s garage opening system?”
“Exactly. It may take a couple of days but I can help you out. I suspect that some of the design work was at least partially done by former students of mine. It’s not rocket science.” Blanchard smiled. “Well, actually, it is. In any case, it’ll be fun, and an excellent excuse to avoid the microwave.”
Blanchard led Gage back through the house and down the garden walkway to his car.
“Scary, isn’t it,” Blanchard said.
“What? SatTek?”
“No, the garden. Versailles is the Australian Outback compared to this place. Trust me, I’ve seen both. My wife trims the hedges with a nail clipper.” Blanchard fingered a precisely angled leaf of a Fuji hedge. “At least it keeps her off my back, dear person that she is.”
Gage pointed back at The Fort. “You want to meet up back here after you’ve had a chance to look at everything?”
“No. At my old lab at Cal. The disadvantage of having emeritus after your name is that colleagues treat you like their senile grandfather. The advantage is that they still give you free rein of the place—as long as you don’t run with sharp objects.”
“How soon can you get to it?”
“I’ll start tonight after everyone has gone home.”
CHAPTER 52
I’m sorry I sounded so panicky on the phone,” Milsberg said, sitting across from Gage at the small table in the Jade Garden Restaurant. “Thanks for coming down. I know you’re under a lot of pressure, but Franklin Braunegg coming by my house last night scared the hell out of me.”
“He’s threatening humiliation so you’ll give up whatever money you have without a fight.”
“It’s not money he wants from me. It’s testimony. In order to really stick it to Burch, he needs someone to corroborate a story that Matson told. Braunegg tried to get me to say that I saw him and Burch huddled together at SatTek a few months into the scam. But I never did. Never saw Burch over there. And that’s what I told him, and that’s when the son of a bitch threatened to bring my kid into it.” Milsberg’s face flushed. “We named our son after me because we thought he’d be proud to carry my name, and now he’s going to have to change it.”
“Don’t get ahead of yourself, Robert. I don’t want you freezing up on me. There are things I need to understand about SatTek and you’re the only one who can explain them.”
Milsberg took in a long breath and exhaled. “Like what?”
“Warrants. That’s the reason I called you. In searching through the backup tapes we found a list of people and companies that received warrants to buy stock.”
“That was another of Matson’s slick little maneuvers. He used to hand out stock options and warrants like candy, but the warrants were the real prize. They gave a select few the right to buy shares at the issue price anytime they wanted, regardless of how high the stock went. That’s how insiders were still able to get it at two bucks a share from SatTek long after it hit five on the public market.”
“Did you get any?”
“Unfortunately.”
“How many?”
“Ten thousand.”
“Did you ever exercise them?”
“Yes. And that’s what I’m most worried about now. Sure as hell makes me look guilty.”
“You are guilty.”
“Yeah, I guess there’s that, too.”
The waitress delivered a plate of pot stickers. Gage slid a couple onto Milsberg’s plate and onto his own.
“Thanks,” Milsberg said. “And thanks for hooking me up with that lawyer. She’s tough.”
Milsberg reached over to a neighboring table and grabbed a small bottle of hot chili oil. He poured a tablespoon on each pot sticker, followed by an equal amount of rice vinegar.
“Cheap thrill?” Gage asked.
“You got that right.”
Gage poured a lesser amount of each on his.
“You told me that Matson claimed he lost a million dollars when the stock collapsed,” Gage said. “But the shareholder list on the backup tape doesn’t show him owning that much stock.”
“I never checked. He must’ve owned and sold a lot over time. He was living way beyond his salary. I assumed it was from selling stock. And his wife was worse than him. She could put anybody into the poorhouse.”
Milsberg popped a pot sticker into his mouth. His eyes teared as he chewed. “Poor guy.”
“You crying for Matson?” Gage asked, smiling.
“No way,” Milsberg gasped, then sipped his tea and wiped his eyes. “Whew! That was a killer.”
Milsberg paused, then took another sip.
“Interesting thing,” Milsberg said, setting down his cup. “I was in Matson’s office one day and I noticed a deed of trust on his house from a
foreign lender. Cobalt Partners. But it was never recorded. A million dollars on what I’ve heard is a two-million-dollar house.”
“It’s a money laundering gimmick. He used Cobalt to sell stock offshore and needed to get the profits back into the U.S. He just loaned money to himself.”
Milsberg shook his head. “Man, I sure underestimated that guy.”
“I think everybody did.”
Gage got through a pot sticker without tearing up.
“Can you think of any domestic lenders Matson had dealings with?” Gage asked.
“Just one. He was looking for somebody to buy the SatTek facility and lease it back. It was a short-term gimmick to pump a lot of money into the company. In the end, Goldstake Bank in San Francisco bought it.” Milsberg laughed and set down his chopsticks. “It was crazy. Goldstake Bank had a partner company, Goldstake Securities, that traded a lot of SatTek stock. A whole lot. The difference between the two was a fiction. No…it was a joke. The address was the same, the officers were the same. One day we’d get a call from a guy saying he was with Goldstake Bank and the next day from the same guy calling from Goldstake Securities.”
“But selling the building would require board of directors’ approval. How did Matson get them to go along?”
“Easy.” Milsberg smiled as if he was about to take a bow. “Warrants. He’d been feeding them warrants. They did anything Matson and Granger told them to do because they were making hundreds of thousands of dollars for doing nothing but calling their brokers and saying, ‘Sell.’”
Gage called Courtney as he was driving away.
“How’s Jack doing?”
“Wonderful. Being home made all the difference. His color is good and his cough is almost gone.”
“Would you ask him if he knows anything about Goldstake Bank?”
“Sure. Hold on.”
Gage heard a thunk as Courtney set the phone down, then her receding steps. She picked up the phone a minute later.
“Jack thinks it would be better if you came by.”
Burch was napping in a recliner in the slate-floored sun-room of his house when Gage walked in. He opened his eyes at the sound of Gage introducing himself to the bodyguard sitting by the stone fireplace in the living room, then raised his hand in a low wave.
