Villiers Touch (39 page)

“If we can tie Wyatt to Villiers,” Hastings said. “All we've got is the girl's testimony she saw them together once.”

Quint popped a ball of hard candy into his mouth. “I want to nail Villiers. I don't care about Wyatt at this point. I don't think it's the proper time to blow the whistle on him. I should like to put surveillance on him and see where that leads us.”

Burgess nodded. He was scribbling in a pocket notebook, his head tilted and eyes half-shut against the smoke from a cigarette in his mouth corner. He put the notebook away and sat back, once again at ease, the picture of careless indolence, the archetypal civil servant. Yet throughout the entire session he had watched with a stare of concentration that indicated his good quick mind was racing, hard at work behind the guarded face.

Russ Hastings looked at him, and looked at Quint, and said, “I'm still a novice at all this, but my instinct is to screw caution. What good does it do
to wait for an airtight case if by that time the crook's dead of old age or fled to Brazil and shipped the money into an anonymous numbered account in Switzerland where we can never get our hands on it? I think we want to stop Villiers before he guts NCI, not after.”

Bill Burgess grinned at Quint. “If you boys had a few dozen more like Russ, instead of that pack of bureaucratic nutless wonders …”

Quint said gently, “Let's dispense with the interservice rivalry, shall we? Go on, Russ, I'm listening.”

Hastings spread his hands. “Maybe my approach is crude. It's the way we used to work in political investigations. I'd have a federal court issue a bench warrant for Wyatt's arrest. I'd charge him with illegal manipulation of the Wakeman Fund—I wouldn't say a word about NCI or Mason Villiers. No point in spelling it out in block caps that we're after Villiers. If we're lucky, Villiers will just think it's a rough break, but he'll feel safe enough not to pull in his horns. Once we arrest Wyatt, we can try to break him down—offer him immunity from prosecution in return for his testimony against Villiers.”

Quint said, “You're assuming Wyatt knows enough about Villiers' operations to do us some good.”

Bill Burgess said, “I'd be willing to take the chance. Arrest the pipsqueak and scare the pants off him. Keep pushing him before he gets a chance to cool off—maybe he'll spill something, and once he's started, he may as well spill the whole thing. In the meantime, I can ask the Canadian securities cops to clamp the lid on those boiler rooms in Montreal. A surprise raid just might turn up documentary evidence to help us knock Villiers over.”

“It's a long risk, isn't it?” Quint said. “If Villiers has covered his tracks well enough, he may get off scot free. He rarely allows his own name to appear on paper anywhere in his dealings—it's always done through fronts.”

Burgess said, “Hold on a minute before you make that decision, Gordon. I was on my way up to Russ's office when your call caught me—I've got some news on the case, and it'll save time to spin it out now for both of you. It has a bearing.” He looked at his watch. “There's quite a bit to cover—have you got time?”

“Go ahead.”

“All right. We've had a team working around the clock on Villiers' background, and we've had some luck. Partly because there aren't many lone wolves left in Wall Street—the big action comes from institutions now, they're all big staffs of college men, dry organization types straight out of those conformity molds they call executive training programs. An individualist sticks out like a sore thumb and people remember him.”

“Villiers has always been a standout, ever since he was a kid. He thinks he's buried his past, but nobody that flamboyant can really expect to be forgotten. We pulled big crews of trained men off other jobs to run him all the way back to the place where he was born, and when you put a lot of people on a thorough job you're bound to hit a lucky break somewhere along the line—you make your own luck. Anyway, we've got a mobster in jail in Chicago, goes by the name of Manny Berkowitz, and we've been pumping him for months. He's an accountant for the mob, and I think he wants to be this year's Joe Valachi. One of our men out there knew Berkowitz used to be tied in with Salvatore Senna—the button you put me onto in Montreal, Russ—and we put two and two together and asked Berkowitz if he ever knew Mason Villiers. It was the right question. Berkowitz has known Villiers since they were twelve years old together, and he's got no reason not to talk.”

“So here's what we've got. Villiers has manufactured a phony background for himself that would have been impossible to check out if it hadn't been for Berkowitz. The facts: Villiers was born in Chicago, out of wedlock. He was taken in by a Catholic orphanage and put up for adoption, but he was a hard-boiled brat even then and nobody wanted to adopt him. When he was two years old he was christened Mark Valentine by the sisters. He spent ten or eleven years in the orphanage. Evidently he was naturally brilliant as a student, but he didn't have a single friend, and he hated the nuns and he hated the orphanage. He ran away when he was eleven or so, and Berkowitz first met him peddling the streets down on the South Side. According to Berkowitz, he was always ambitious and greedy, and even from the first he operated in epic style. From the time he was old enough to count, Villiers wanted to be rich. Not just comfortably well off, but the richest man in the country. You've got to consider this guy came up from the bottom—a bottom so far down none of us have ever even seen it. According to Berkowitz, when the two of them were thirteen they had to kill and eat pigeons. They got jobs pearl diving in a hotel kitchen in Cicero. It wasn't too long before they'd started making contacts with minor-league mobsters. Villiers ran with the pack for a while, but he was never really part of it—he could never work with an organization above him, and the organization could never trust him.”

“He really started out when he was about nineteen. He seems to have educated himself in libraries, mainly—he never spent any time in school after he left the orphanage. But at nineteen he had a hell of a vocabulary and the brains to go with it. He saw a chance to buy the capital stock of a bankrupt company for two thousand dollars of borrowed money at a sheriff's auction in Wisconsin. He had to borrow it from loan sharks in the mob, but it gave him a foothold—an established corporate name—and he's never stopped climbing since then. He got together with Berkowitz, and the two of them put the company into trivial production, just enough to make it look alive. Then they brought in a couple of other partners and started trading the stock back and forth among themselves. Pretty soon the over-the-counter market took note of it. The public watched for a while and decided it was an active stock, so they started to fool with it too, and so the price went up. Naturally, that was when Villiers and his partners pulled out. They took healthy profits after they'd churned the stock, and they left the public holding the bag.”

Quint murmured, “It's a little game that's probably been played only a hundred thousand times. But they never learn out there, do they?”

Burgess smiled and nodded; he went on: “Villiers paid off the loan sharks and went into corporate finance for himself. He established an insurance company, chartered in Maryland, where the laws are pretty loose, and he issued reams of paper and used it to buy stock in other companies. Pretty soon he was just trading his own stock back and forth the same old way, but the public saw all the activity going on, and they kept moving in. Villiers took handsome profits and moved on into the plastics business by using Lee Central Plastics Company's own assets to buy control of the company. It seems to have been a watertight job he did with that one. He issued insurance-company securities and sold them to Lee Central Plastics in exchange for Lee Central stock. Got control, and shifted the watered insurance stock back into a dummy pocket quick enough to get it off Lee's books before the next annual report came due. Everybody knows he had to have some weapon to hold over Lee's directors to put the deal through but nobody ever proved anything.”

“While he was in the middle of the Lee Central thing he was working another interesting stunt at the same time—starting a rumor along the Street that the Federal Reserve and the ICC were going to raise margin requirements. He did a hell of a job of planting information, sort of like this plant he's pulled through Wyatt on Claiborne's outfit. He got the rumor working so well it drove stock prices down across the board for two days, and he was right in there selling short all the way, buying in at the bottom and riding it back to the top after the rumors fell apart. That kind of thing goes on all the time, I guess—painting the tape. Nobody ever proved Villiers started those rumors, of course, but the word got around somehow, and after that and the Lee Central thing, he's had a hard time doing business down here. That's why he shifted most of his base of operations to Canada.”

“He's a con man, of course, a common swindler, but on a grand scale. That gives you the background—I think it may help, sometimes it's easier to anticipate what a man will do when you know how he tends to operate in a given situation. All right, now we're up to the present. That brings us to this item.” He took a folded newspaper proof sheet from his pocket and spread it open on Quint's desk. “Better come over here and read it, Russ.”

This announcement is neither an offer to sell nor a solicitation of an offer to buy or exchange the securities referred to below. The Exchange Offer is made only by the Prospectus, copies of which may be obtained in any jurisdiction only from authorized dealers, including the undersigned
.

NOTICE OF EXCHANGE OFFER

TO

HOLDERS OF NORTHEAST CONSOLIDATED INDUSTRIES, INC
.

COMMON STOCK

BY

HEGGINS AIRCRAFT CORP., INC.

Heggins Aircraft Corp., Inc., is offering by the Prospectus to exchange unlimited shares of Common Stock of Northeast Consolidated Industries, Inc., for Convertible 5½% Debentures of Heggins Aircraft Corp., Inc., in the ratio described below. The Exchange Offer will expire at 5:00
P.M.
Eastern Daylight Time on September 30, 1970, unless extended by Heggins Aircraft or withdrawn as aforesaid.

There was a good deal more, and Hastings, peering over Quint's thick shoulder, read all of it, right down to the italicized signature of Hackman and Greene, Registered Brokers.

Bill Burgess said, “We got that proof from the
Times
. The same ad's set to run Monday in
The Wall Street Journal
and every big metropolitan daily in the country.”

“The fat,” Quint said obliviously, “is in the fire. Not only that, but the damnable thing about it is, he can do it. Legally. Unless we find a means to stop him.”

Bill Burgess said, “What I still don't understand is how he managed to beef up Heggins so fast. Two weeks ago it was a dying company floundering on the verge of collapse. Now the price has shot up six points, and you hear nothing but glowing reports—and don't tell me all of them were planted by Villiers' people.”

“Part of them,” Hastings said. “The rest of it must have been done by cooking the books. A lot of things. I'll lay a few examples on you to give you the drift. First, the company deals in a low-down-payment product—airplanes. Say a plane costs fifty thousand and the customer buys it with five thousand down. Ordinarily you report only the five thousand as income. But when Villiers took over, suppose his accountants cooked the books by inflating earnings with the whole thing in the income column—they report the full scale price as income, not just the down payment. Shady, but legal. They can juggle the inventory accounts to make the assets look greater. They can bring in their own team of auditors, who've been coached to show how depreciation has been taken inaccurately, and fiddle with earned-surplus figures and net working capital and other vagaries. They can report the company's subsidiaries at book value instead of original cost. They can choose between accelerated depreciation and straight-line depreciation. They can take research costs immediately instead of amortizing them over a five-year period. They can announce they're going to grant stock options, which aren't charged to income, in lieu of cash bonuses. They can credit capital gains to income. They can, and did, declare a cash dividend last week to increase stockholder confidence. Villiers has created a bull market in Heggins stock overnight by operations like that and by putting out sales literature that convinces the readers it's a good company to invest in. All kinds of happy talk about talented scientists and engineers, capable financial leadership, and a new management that's balanced in depth so that the loss of a key exec won't wreck the company. A spirit of innovation. An aggressive intent to exploit existing markets and create new ones. A good record of sales expansion five years ago, and never mind the years in between. Hell, our boy's been a one-man inflation for Heggins stock. And it's easy enough to see what he's doing now. It's relatively cheap for one company to take over another company by issuing interest-bearing Chinese money like these Heggins debentures in Villiers' ad. And I'm not even sure the NCI board of directors will put up a fight.”