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.
Gage walked over, pulled an armchair to face him, then sat down. “How’s it feel to be home?”
Burch spread his hands as if to encompass the house. “It’s either a prison…” He cleared his throat while pressing his hands against his chest. “Or a fortress. I’m not sure yet.”
On the drive over, Gage had considered asking a few questions, then leaving and thereby postponing Burch’s confrontation with the case Peterson and Braunegg were building around him. But Burch took the decision out of his hands.
“I heard Courtney arguing with someone outside of my door at the hospital,” Burch said. “I finally convinced her to tell me why.” He reached over and picked up a glass of water from a low table, then took a sip. “How’d you get them to withdraw the subpoena?”