Cazaux’s justice was in his heart, his mind, his weapons, and his aircraft.
The Americans had worked to almost put him out of business, permanently. That was going to end. America had yet to feel the fury of a full-scale attack by Henri Cazaux. Now it was time. Cazaux wanted to see America bleed, and attacking its most important and yet most terrifying institution—its air traffic and air travel system—was going to be the way to do it. It was so easy, and yet it was going to be so devastating ...
It had been a long time since Henri Cazaux had be£n in an American commercial airport terminal—international terrorists rarely travel by commercial air unless speed is a necessity—and what he saw surprised him. No one, he thought, would consider spending one second longer than necessary in a bus station, or taxi stand, or train station, but modem airports seemed to cater to travelers who obviously spent a great deal of time there. Even relatively small Phoenix-Sky Harbor International Airport had fancy restaurants, video arcades, bookstores, hotels, an art museum, meeting and exercise rooms, even a small amusement park with putt-putt golf and miniature movie theaters right on the airport premises. While Cazaux was busy moving from one restroom to another every fifteen minutes until his flight was called, trying to stay incognito, he noticed people that seemed to hang around, enjoying themselves like tourists. It was crazy ...
... but what an inviting target. This place was packed! There were dozens of planes parked at the gates, with thousands of persons choiring the terminal. One bomb in the center of this place could kill hundreds, injure hundreds, destroy perhaps billions of dollars of airplanes and property. But it would take a thousand pounds of explosives, maybe more, to do the kind of damage he needed to do, and he couldn’t truck that much nitro all the way into the heart of the terminal...
... but he could drop the explosives on the terminal, just like he did at Mather Jetport and San Francisco International. The Americans had no defense against an aerial assault. Yes, there were air defense fighters, but they were only a few units scattered around the periphery of the country. The FBI, perhaps even the military, would eventually crack down on all unidentified or unauthorized flights, but it would take many days to shut down America’s enormous air traffic system, and once shut down it would surely crush the American way of life. Until then, he could take an incredible toll on these mindless Americans. Three attacks, all in less than a week, and he was certain that America would fall to its knees.
It would take lots of planning, and money, and that meant a trip back east, to his American headquarters in New Jersey—the Owl’s Nest—to meet with his senior staff to plan the operations. But more importantly, he needed to know if his dreams of destroying America from within were possible. Again, the answer was in the east, in Newburgh, New York. Only one person could advise him on how to proceed, and he needed to see her as soon as possible.
Cazaux remained in his Mexican stronghold in Nogales long enough to disguise himself, effortlessly aging thirty years with simple makeup and posture techniques, then used his forged American passport and boarded a flight from Nogales to Albuquerque. Security was loose and there was no sign of pursuit, and booking a flight to Chicago and beyond was easy. No one gave the bent, alcoholic, emaciated-looking old man more than a passing glance as he boarded the next plane.
PART 2
New York City August 1995
When his executive assistant found Harold G. Lake, the first thought he had was, My God, he's going to jump.
The sealed high-rise windows designed to keep the heat and the odor and the noises of Manhattan out were triple-paned tempered glass, so, of course, it wasn’t possible for Lake to jump (from here at least) unless he had a sledgehammer hidden in his closet. But it was the way Lake looked that worried Ted Fell, Harold Lake’s attorney, executive assistant, and—if anyone could properly be so categorized—friend and confidant. Harold Lake. He was a brooder even on his best days, and he could be depressing most days. Today, the tall, dark, slim entrepreneur, investor, and Wall Street trader looked like a dog left out in the rain all night.
“Got those letters of intent ready for your signature,” Fell reported. “I see no problems at all with the debt restructuring. The next few weeks should be okay. We’re in the clear.” Fell set a small pile of papers on Lake’s desk, the only item on the expansive and empty marble and mahogany desk that looked out of place. Lake continued to stare out the huge picture window of his downtown Park Avenue office into the gray steamy overcast. It was already 80 degrees in the city, and threatening to hit 90-plus with 90-plus-percent humidity—one might actually be cool and comfortable standing out on a forty-first-story ledge right now, Fell thought wryly. “You got my notes there on top, but I got a few minutes to talk about the deal if you—”
“Who did the deal?” Lake asked. When Fell hesitated that extra moment, Lake replied for him: “Universal. Shit. What’d you get?” His voice was uncharacteristically uneven, with a trace of his native New Jersey accent mixed in, even after years of trying to excuse it.
“Universal Equity offered us ten-point-one percent,” Fell said quickly.
Lake irritably rubbed his eyes, moved toward the papers as if to confirm what Fell said was true, then sat back in his high-backed black leather chair and continued to stare out the window.
The president and founder of Universal Equity Sendees, Limited, based in Glasgow, Scotland, was Brennan McSor- ley, one of the world’s richest men, owner of the largest nonpublic investment group in the world. McSorley had his fingers in hundreds of different pies all over the world, everything from oil and gas to banking to shipping to computers. He and Lake, McSorley’s one-time disciple, had done business many times in the past, although their version of “business” nowadays was akin to calling the U.S. Civil War a “disagreement.” McSorley was like a giant stallion to Lake’s horsefly—Lake could irritate the hell out of McSorley and his investors, maybe even cause him to stumble or lose control, but Lake was small potatoes next to Brennan McSorley.
“If I say no to him now, I’m screwed and he knows it.” Lake looked at Fell with an accusing glare. “You agreed to his terms?”
“You have final authority, boss, so you can say no to the deal,” Fell responded, “but it’s what you wanted, right? A done deal, in time to pay the account and retain your shares.”
“You fucking agreed to pay Brennan McSorley ten- point-one percent, Ted?”
“No one else gave you the time of day, Harold. You needed eighteen million dollars by close of business today. If I had even three days, I could get that for you at eight- point-five. McSorley said yes right away, and I had to move.”
“Maybe you moved a bit too fast.”
“You may not like McSorley, boss, but he went to the mat for you this time,” Fell said. “The money is in escrow, ready to go. McSorley personally guaranteed the loan, boss, he showed up at the bank himself to sign the papers.”
“He’d like nothing better than to see me default, the prick,” Lake said gloomily. “He’d take great pleasure in seeing me file for bankruptcy or selling my assets. He’d be first in line to screw me in bankruptcy court. He probably showed up at the bank to conduct a news conference, to announce to the whole world what a loser I am.”
Fell elected to stay silent, but he reminded himself that Harold G. Lake knew a lot about screwing someone, whether it was in court, in the market, or just about any imaginable business or social setting. Along with many other talents, Lake was one of the world’s premier options traders. His business was enticing other investors to write option deals to buy or sell their stock. Lake had many ways to sniff out stocks that might come into play—lack of publicity, no returned phone calls, lots of unusual stock trading activity by company officers, even when, where, and how the officers went on vacation. Like a general planning an invasion, Lake was a master at setting an objective and then designing a vast, convoluted, sweeping series of trades to accomplish his ultimate objective—what he called the “perpetual
motion machine.” Create a series of deals, contracts, and companies whose income and assets always exceeded the expenses and liabilities. Create a network, an empire, that was totally self-sufficient, that made contracts with itself, earned money off itself, paid expenses to itself, owed money to itself. It was a true “money tree,” the modern-day answer to Midas’s touch of gold.
Lake was a master at this kind of deal-making. After getting an undergraduate degree from Rutgers and an MBA from Harvard, Lake had spent his early career in middle management with a variety of companies and brokerage firms specializing in “creative” financing, long-term corporate debt (junk bonds), and market speculation. In 1980 he joined Universal Equity Services, where he handled all the real estate acquisitions. Then, in 1985, Lake engineered an insider trading scheme in which the price was artificially jacked up in a bidding war between Universal Equity and a company secretly funded by Lake. Lake was fired, but his illegal activities were never confirmed by Universal. Since leaving Universal, Lake worked in a variety of financial and stock trading positions before finally striking out on his own.
“We’re still in business, and we’ve got plenty to keep us afloat for months,” Fell said finally, standing up to Lake’s glare. “Let’s maintain the proper perspective here. Who the hell knew some nutcase in San Francisco was going to wipe out half of an international airport terminal and kill five hundred people? Plenty of investors lost big on this one, boss, including McSorley. It’s a glitch in the market, that’s all. Everyone in that investment consortium that bailed out on you this morning will be back in a few weeks, looking for fresh meat. They’ll know they looked bad when they punched, but they’ll come back because you made it happen. We can soak them when they come back, too, because they lost face by bailing out on you.”
Ted Fell was one of the few people, in fact the only one, who could really talk to Lake like this. Blunt, no bullshit. But that was because Fell was the best addition to the organization that Lake had made. He complemented Lake’s own strengths and made up for Lake’s weaknesses in other areas. A graduate of Dartmouth College and Harvard Law School, Fell had held several positions with large law firms in Albany, Wilmington, and New York City, most in the areas of finance, insurance, and corporations. Admittedjo the bar in sixteen states, he was considered a leading authority on corporation organization—i.e., dummy corporations and offshore shells. He had worked for Lake since his days at Universal Equity, helping him on his real estate deals and then unwittingly, and then knowingly, participated as an engineer in the stock manipulation scheme that had gotten them both fired.
Lake wasn’t totally listening to his attorney, but what little that did register in his head made sense. The terrorist bombing of San Francisco International last night was an aberration, a total fluke—damn it, it had to be, or Lake was really sunk. Several hundred persons dead, thousands injured, hundreds of millions in damage to aircraft and property, and perhaps billions in lost revenues due to the closing of the airport for perhaps as long as a year.
A one-in-a-million occurrence . ..
But the damage to Lake’s portfolio was just as devastating, and simply because it was caused by a random event would not mitigate the damage. Because he rarely used his own money for most deals, Lake liked trading on the edge, leaving himself uncovered for short periods of time. One of Lake’s favorite options trading tactics was writing uncovered put and call options, or “naked options,” in which he agreed—for a price of course—to buy stocks at a certain price that he didn’t have the money to buy, or sell stocks that he did not yet own. In ordinary circumstances, the premiums received for writing such contracts made the risk well worth it. But if the market takes a nosedive and the contract is assigned, as it was during the night by some astute overseas investor, Lake was obligated to sell his stocks at low prices or obligated to buy stocks with cash he did not have. In both cases, he needed cash in a hurry to cover all his contracts.
Normally, in case of impending bad financial news, Harold Lake’s overseas brokers usually executed closing purchase transactions that canceled the more risky uncovered options before they were assigned, but the sheer speed of the terrorist attack and the rapid reaction by overseas traders made it impossible. Lake was stuck holding all the IOUs, and they were all due and payable by close of business, or he was out of business. The huge drop in price of Lake’s stocks in overseas trading alone was enough to queer several other deals in which he was involved. The New York Stock Exchange was not due to open for another three hours, the Chicago Board of Options Exchange not for four hours, and already Lake had lost 40 percent of his portfolio’s value, much of which had to be covered with cash. Dozens of nervous overseas investors bailed out on him through the night, withdrawing money that had been earmarked for scores of other projects—it was a huge maze of dominoes collapsing as quickly as the sunrise moved across the planet. Investors heard of the awful terrorist bombing, took defensive cash-saving positions, and left speculators like Lake sucking wind. Borrowing the money to make up for the losses and to continue his current obligations only prolonged the inevitable. Eighteen million dollars wouldn’t last Lake two months, even at zero-percent interest, let alone at an exorbitant 10 percent. Foreclosures and bankruptcy were inevitable.
But even more devastating than just losing your possessions or property was the loss of prestige, the loss of face. Normally talking about losing face was a Japanese notion, but it is very true on Wall Street as well. You are only as good as your last bad trade, the Street version of the old saying goes. No one likes a loser, and the stigma stays with a trader for a long, long time.
Technically, he was out of business right now, because no one would ever do deals with him again, but now it was a matter of survival. Bankruptcy was out of the question— it would save him from a few, but not the ones that mattered. A lot of the people he dealt with did not allow anyone to hide behind lawyers and bankruptcy courts.
Lake took a deep breath, then got to his feet, straightened his shoulders, and tightened his stomach and chest muscles until they tingled. When faced with adversity, he was always taught, get the blood running and the brain working. Start thinking and feeling like a warrior and you’ll start acting like a warrior. It was time to get on the offensive: “I’m going to need a face-to-face with George Jacox and get a report,” Lake said. Jacox was the outside tax attorney and accountant, leading a staff of two attorneys and six CPAs who managed Lake’s affairs. “I need to restructure that debt with McSorley first thing.”
“George is in Alaska on that hunting trip,” Fell reminded him. “Completely incommunicado until Saturday. I can get in contact with his partner.”
“Scherber’s an asshole,” Lake said. “Besides, George knows where all the bodies are buried. Get the jet and go pick him up. Better yet, pack all his records on a portable computer, grab a satellite transceiver, and take it all to him. Then let’s put in a call to—”
“Boss, I think our first move should be to sign those papers and get the loan moving,” Fell interjected. He wasn’t about to tell Lake, at least not this minute, that they could hardly afford to reserve a court at the YMCA right now, let alone fly the company’s private jet from New York to Alaska and back. “We’ve only got two hours before the last wire transfer from Europe. In an hour and a half the phone’s going to be ringing off the hook, and we’d better have a wire receipt to show the institutions that we’re covered or we’ll really be in trouble.”
“I am not going to spend all day on the phone with a bunch of nervous bean-counters,” Lake said. “They wanted to play, and this is part of the game—let them sweat for a few hours while we get our shit together here. Next time, Jacox doesn’t leave the fucking city without a cellular phone or I’m findirig a new legal team.” .
“We don’t needJacox to read a spreadsheet or make a pitch to the venture capital types,” Fell said. “I can handle the legal side of the opening negotiations. But let’s get solvent first before we start bending
anyone’s ear.”
“You don't get it, do you, Ted?” Lake snapped, turning angrily toward his longtime associate. Lake was a bit shorter than Fell and physically smaller, with tight, wiry muscles and a lean physique—physically, he was no match for the huskier, more solidly built attorney. But the air of desperation that hovered around Harold Lake made him seem all the more fearsome. The veneer of cunning control was gone—as much as he tried, Lake was not going to get it back. He ranted, “I am not going to go into eighteen-million-plus dollars in debt, get bombarded by jerkoffs who think they can push me around because the market takes a header suddenly one morning, and then try to pretend everything is going to be okay. This is a glitch in the market, nothing more. We’re in the middle of a sustained bull market, for God’s sake! The market hits new record-high territory every three months! Is it my damned fault that a fucking terrorist drops a bomb on San Francisco International?”
“Take it easy, boss ...” Fell tried.
The phone on Lake’s desk rang—the onslaught of inquiries that Fell was expecting was now beginning. “Tell whoever it is to fuck off,” Lake hissed, returning to his desk and resuming staring blankly out the window. Fell answered the phone, leaving instructions that Lake not be disturbed and that he would handle all calls himself. “Get out, Ted,” he told his assistant from behind his chair. Fell was going to stay despite his boss’s obvious anger, but when Lake appeared to be looking over the loan papers and getting back to work, he relaxed a bit and departed.
The bombing of San Francisco International by some crazed lunatic gunrunner may have been a random, completely unforeseen event, even an accident. But one thing Harold Lake knew for sure was that it could very easily happen again. Yes, a lunatic was behind it. . .
. . . and Lake, like the rest of the world, knew who he was.
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