21
The living room of Frank Little's ranch was decorated in faux Texan: Indian rugs on the polished wood floor; deer antlers on the whitewashed walls; exposed beams overhead; a gun rack; sling chairs covered with pony hides. Looking at this set for a Western movie, and then inspecting Little in his silk slacks and sports shirt unbuttoned to the waist, hairless chest festooned with gold chains and amulets, David Rathbone could only think of the classic definition of a would-be Texan: 'All hat; no cattle.'
The five men were served drinks and cigars by Jacques, Little's Haitian houseboy. Jacques was nineteen, olive-skinned, sloe-eyed. He would last a year. Little replaced his houseboys annually, all clones of Jacques.
Rathbone waited until all five had drinks and Jacques had left the room. Then he said, 'Here's what this is all about.'
He outlined the proposed commodity trading fund, dealing only in 'controlled substances,' meaning marijuana, cocaine, heroin, and other illicit drugs. The fund would buy and sell options and futures, making a profit by the spread between buy and sell orders, and from the investors, who would, of course, be unaware of the true nature of the commodities being traded.
Bartlett would sign buy contracts with his clients. Little would sign sell contracts with his customers. Mort Sparco would organize the fund and peddle shares of the penny stock to his local accounts. Sid Coe would push the shares in his boiler room. Rathbone would serve as comptroller and chief executive officer.
'But none of us risks his own money,' he said. 'Start-up cash comes from Mort's suckers and Sid's mooches. We start out small and see how it goes. If it looks like a winner, we tie up with bucket shops all over the country and with penny stock brokers in Denver, giving them a piece of the action. All profits are split evenly five ways. How does it sound?'
'Let me get this straight,' Frank Little said. 'You want me to get my customers to sign contracts to buy?'
'Right,' Rathbone said. 'The drugs will be given code names, and you'll set a price for delivery in three, six, nine, and twelve months. Jimmy will do the same with the imports. The only way this is going to work is by analyzing what the future market will be like: how big the supply, how big the demand.'
'I think you got a hot idea,' Sparco said. 'But take my advice and forget about trying to push options and futures. My pigeons just don't understand them. Buy low and sell high-that they can understand. But not the mechanics of future and option trading.'
'Ditto the suckers on my lists,' Coe said. 'My yaks have a limited time to close a deal. They've got to keep their pitch short and sweet.'
'That's what I told David,' Bartlett said. 'My clients work on a simple business principle: make a sale, get cash on delivery. They're willing to sign contracts at preset prices, but they know nothing about options.'
'All right,' Rathbone said, 'then let's stick to basics. We set up the fund financed by sucker money. We pull a Ponzi to keep the early investors eager. But we invest the bulk of the cash in purchases for future delivery. Jimmy, can you trust your clients to honor signed contracts?'
'Some of them, sure. I know which ones we can trust. But buying the stuff is less a risk than selling it. Frank, will your customers honor a signed contract if, say, the price drops before you deliver? You follow? I mean if you promise H at 18K a kilo in six months, and then in six months the going price falls to 16K a kilo, will your guys ante up the 18K or will they renege?'
'Some of them will welsh,' Little said. 'But some I deal with have this big macho honor thing; they'll pay what they agreed on even if they have to take a bath.'
They all fell silent as Jacques padded in with a tray of fresh drinks. They waited until he left the room before resuming their discussion.
'What about timing on this?' Rathbone asked. 'Mort, how long will it take to set up the fund and get the shares printed?'
'A week or ten days. No more than that. My paper-man works fast, and he turns out beautiful stuff. Old engravings on the shares. They really look legit.'
'And what about you, Sid?' David' said. 'It shouldn't take long to write a script for your yaks on the new fund.'
'I could do it tonight,' Coe said, 'if I knew what the name was. What are we going to call this thing?'
They stared at each other a moment.
'How about the Croesus Commodity Trading Fund?' Bartlett suggested.
Rathbone shook his head. 'It won't fly,' he said.
'The mooches aren't going to know who Croesus was.'
'How about this,' Frank Little said. 'The Fort Knox Commodity Trading Fund.'
Everyone smiled.
'A winner,' Sparco said. 'And if the suckers think we're dealing in gold, so much the better.'
The name decided, they then discussed their first deal. Bartlett urged that they start small with limited contracts for the purchase and sale of cocaine in three months' time.
'You've got to remember that I've never bought on my own,' he said. 'I just provide banking services. Being an importer is new to me, and I want to go easy at first.'
'Same with me,' Little said. 'I'm just a trans-shipper and live off fees. My customers do their own buying.'
'But if you can shave the price and deliver high-quality stuff,' Rathbone said, 'they'll buy from you, won't they?'
'No doubt about it. These are bottom-line guys.'
'Good,' David said. 'I'll get to work on a standard contract and draw up a list of code names for the commodities we'll be handling. I'll also get some new software for my computer. Maybe a spreadsheet. If we're going to do this thing, let's do it right.'
'The way I figure is this,' Mort Sparco said. 'What's the worst thing that could happen? That we lose all our money-right? Only it's not our money. So we've really got nothing to lose, and everything to gain. If we call the prices right and make a nice buck, we'll just pay the investors enough to keep them coming back-and pocket the rest. This could be a sweet deal.'
'Yeah,' Coe said, 'even better than the Gypsy Handkerchief Drop.' And they all laughed.
They had another round of drinks and discussed where and how to set up a checking account for the Fort Knox Commodity Trading Fund. They talked about the advisability of renting a small office, hiring a secretary, and having letterheads and business cards printed. Then the gathering broke up. Before they separated, they all shook hands as serious entrepreneurs starting a daring enterprise with exciting possibilities.
Rathbone had picked up James Bartlett at his home and had driven him to Frank Little's. Now, on the ride back to Bayview Drive, the two men briefly discussed the meeting.
'I was surprised at how easily it went,' Rathbone said. 'I didn't have to use the hard sell at all. Well, they're shrewd guys and could see the potential. Jimmy, it could be a bonanza if we have luck analyzing the future market.'
'I think I know the man who can evaluate the supply and demand picture for us,' Bartlett said. 'He knows the drug scene inside out, from Bogota to the South Bronx.'
'Sounds good,' David said. 'Is he a dealer?'
Bartlett laughed quietly. 'No,' he said, 'he's a federal narc who turned sour about four years ago. Now he's got accounts in Switzerland and the Cayman Islands I helped him set up. He'll be happy to help us.'
'You sure? If he turned once, he can turn again.'
Jimmy shrugged. 'That's a risk we'll have to take. But I don't think it'll happen. He's in too deep.'
'Well, tell him what we need and see what he comes up with. If he works out, we can always cut him in for a point or two. Jimmy, there's something else I want to talk to you about. You'll love it.'
'Will I?' the other man said. 'Try me.'
Rathbone told him all about Termite Tommy, the old German printer in Lakeland, the self-destruct paper, and how he had passed a forged check at the Crescent Bank.
