Nothing but Money_ How the Mob Infiltrated Wall Street Part 8

This was not the first time Robert had had problems with Jimmy. His cousin Frank, who was also his skipper, was always complaining about Jimmy. A few weeks after the bit of business with Perrino from the Post Post and the car not starting and all, Jimmy had shown up at a bar and announced to Frank that he'd put his role in helping bury Perrino on record with Johnny G, a Gambino family soldier who mistreated him but with whom Jimmy hoped to make a name for himself in organized crime. Jimmy was trying to impress Johnny G, but the true effect of this little bit of sycophancy was to let the Gambino family know all about the Bonanno family's business. The way Frank saw it, what happened to Perrino from the and the car not starting and all, Jimmy had shown up at a bar and announced to Frank that he'd put his role in helping bury Perrino on record with Johnny G, a Gambino family soldier who mistreated him but with whom Jimmy hoped to make a name for himself in organized crime. Jimmy was trying to impress Johnny G, but the true effect of this little bit of sycophancy was to let the Gambino family know all about the Bonanno family's business. The way Frank saw it, what happened to Perrino from the Post Post was n.o.body's business. Frank had come to believe that Jimmy Labate was a loudmouth and stupid, a combination that works fine for Department of Motor Vehicles employees but is not good for gangsters. was n.o.body's business. Frank had come to believe that Jimmy Labate was a loudmouth and stupid, a combination that works fine for Department of Motor Vehicles employees but is not good for gangsters.

Such were the problems Robert Lino was always dealing with. Anybody who was put with him was there for a reason. Usually the reason was money. The guy had a healthy sports book or shylock operation. The guy had his hooks into a union. The guy owned a strip club or a nightclub or any business that involved lots of cash. The guy had something to offer. Robert, in return, let them use his name and the power of the Bonanno crime family if disputes arose with other Mafia families or any other form of criminal fraternal organization. That was his end. Also he had to show up and settle the dispute.

Usually this was an arrangement that worked out in Robert's favor. Take, for instance, the situation with another guy who reported to Robert: Jeffrey Pokross. Here was an earner. He had been running car lease schemes for years and had not once visited the inside of a jail cell, but had consistently kicked up significant amounts of money to Robert Lino and the Bonanno crime family. In recent weeks, Jeffrey Pokross had encountered a problem with a Gambino a.s.sociate named Billy. Billy was a large guy, probably six foot four. Jeffrey was a small guy who was good with numbers and quietly robbing people blind but wouldn't know how to give somebody a beating if his life depended on it. Billy had been involved with one of Jeffrey's insurance scams, where the driver, in this case Billy, pretended to have a car accident. Jeffrey's friend, another Bonanno a.s.sociate named Patty Muscles, would use his auto body shop as a cover to generate fake bills, and the insurance companies would pay out. Jeffrey, Billy and Patty Muscles all split the amount evenly. Only Billy had decided Jeffrey had stolen some of his share. Billy didn't have any real proof of this, just the fact that he was huge and Jeffrey was not. He called Jeffrey on the phone and screamed that he was going to kill him and his children's children if he didn't cough up some cash. Jeffrey hung up and called Robert Lino. Robert told him to let Billy know that if he had a problem, he should call Robert from Avenue U. Jeffrey did as he was told, and that was the last time Billy bothered him.

In return Jeffrey got Robert a car and sent him a nice fat envelope at Christmas. That was the way it should be: make a phone call, get a car. Then Pokross said he might be able to get Robert a salary. This guy Pokross claimed to have a stockbroker's license and was going to start up a brokerage house that almost sounded legitimate. He was going to call it DMN Capital, and he'd rented out an office a few blocks from Wall Street. Pokross let it be known that he felt the stock market was about to go through the roof, and he wanted Robert from Avenue U to be part of that.

Robert didn't really understand how it all worked, but he could tell it was easy money. It wasn't hijacking trucks or collecting shylock loans or chasing down degenerate gamblers for the vig. With this crowd it was highly unlikely there would be a need for a beat-down, and the amount of money this Pokross was promising was fantastic for doing practically nothing. Pokross had told him he would only be needed if other mob families figured out what was going on down on Wall Street; then Robert would step in and smooth the way.

It all seemed simple enough, although Robert was well aware there was a specific rule in la cosa nostra la cosa nostra forbidding involvement in the stock market. That rule, of course, was like most rules in the world of gangsters-it was nonsense. The glory days of forbidding involvement in the stock market. That rule, of course, was like most rules in the world of gangsters-it was nonsense. The glory days of la cosa nostra la cosa nostra were finished. The FBI was cracking down on all the traditional money sources: the garbage carters, the fish market, the unions. Wall Street was simply a new opportunity, and if you missed out you were nothing but a fool. For a guy with a sixth-grade education who had trouble signing his name, this kind of arrangement sounded pretty good. were finished. The FBI was cracking down on all the traditional money sources: the garbage carters, the fish market, the unions. Wall Street was simply a new opportunity, and if you missed out you were nothing but a fool. For a guy with a sixth-grade education who had trouble signing his name, this kind of arrangement sounded pretty good.

It was never this easy with Jimmy Labate, who had finally entered the restaurant and sat down next to Robert. He stared at the contractor like he would like nothing better than to pour a pot of boiling coffee on the guy's lap.

The contractor explained the situation. He didn't want to put anyone on the payroll, but out of respect to Robert Lino of Avenue U, he allowed for two guys. He made it clear he couldn't afford four guys on the payroll, and Jimmy had agreed that two guys-not four-would suffice. Robert asked Jimmy if it was true that he'd agreed to two guys, not four. Jimmy admitted that it was true.

Robert slapped Jimmy in the face.

"You shook hands with this man and then reneged on the deal?"

Robert made it clear how this would work. Jimmy, who was also making a salary at Jeffrey Pokross's Wall Street operation, DMN, would now deliver a portion of his salary every week to the contractor until the guy was compensated. It was a win-win situation for Robert Lino. The contractor was now his best friend, and Jimmy would learn a lesson about restraint. Maybe. Sometimes being a soldier in an organized crime family was a big pain in the a.s.s.

Mid 1995

Usually Robert Lino didn't stop down to DMN Capital more than once a week. The narrow streets around Broad and Wall were not exactly familiar territory for Robert from Avenue U. There he looked more like a janitor than a man of respect, with all these college guys in suits and ties and the whole att.i.tude of exclusivity that hung in the money-driven air. Usually he'd drop in just once a week, on Thursday afternoon, make a little small talk, see how things were going, pick up the envelope of $1,500 cash. Sometimes he'd check up on the people he'd recommended for jobs there. There were some brokers he knew of through other members of the Bonanno family who were working there at his recommendation, and he needed to know that they were holding up their end. Usually a visit to DMN was an uneventful affair, a session of listening to Jeffrey's list of minor complaints and applying common sense to resolve them.

Until now Wall Street had been nothing but money for Robert Lino. The disputes were tiny. A broker claims he hasn't been paid by a stock promoter. A promoter claims a broker isn't holding up his end by pushing the bogus stock they're trying to pump up. That sort of thing happened every day down there. It was no big deal. The big deal would be some guy from another one of the families laying claim to specific brokers or stock promoters, or another family s.c.r.e.w.i.n.g around with the schemes of DMN by manipulating the stock DMN was trying to manipulate for its own ends. So far Robert had had only a few interactions with members of other organized crime families, and all had resulted in solutions both sides could live with.

Now that was changing. Until now only a handful of wiseguys out there had figured out what Wall Street had to offer, and that had been good for DMN and Robert Lino. Most wiseguys really weren't cut out for it anyway. Most had barely made it halfway through high school before dropping out, and they were usually overwhelmed when confronted with quarterly reports and understanding when a company was overleveraged or undervalued. Robert Lino himself had made it only through sixth grade; he hadn't come close to basic algebra and was nowhere near the calculus required of an MBA.

Recently, however, Robert had become aware that there were other guys from the neighborhood out there who did understand the numbers game. In fact, more and more of these guys were showing up.

It started with Philly Abramo. He was a captain in the wannabe family from New Jersey, the DeCavalcante group. He claimed to be the father of the pump and dump scam, which was nonsense but sounded impressive. Pump and dump had actually been around since the 1980s, when a handful of gangsters made some money hyping bogus stock. Regardless, practically everyone in the underworld knew that Philly Abramo had mastered the art of keeping pump and dump below the radar. That, of course, was the key. You didn't actually have to know everything about Wall Street to play the game. You just had to appear to know what you were talking about. It was the magician's trick-misdirection. Make the audience pay attention to your left hand while your right hand is robbing them blind. Philly Abramo was the Harry Houdini of Mafia Wall Street.

And now he wasn't alone. It had long been rumored he was making millions-not thousands, not tens of thousands, not hundreds of thousands. Millions, all on Wall Street. And he didn't have to pull out a gun, shove in a knife, chop up a body, pour in the concrete-none of that messy business. He surrounded himself with guys who could do that, but even they rarely had to make a guy disappear. Mostly the scheme worked with a mere threat, and that was easy. These Wall Street guys-even the corrupt ones-were pushovers. Just talk about putting them inside a fifty-five-gallon drum and they'd do whatever you wanted. Fear without blood. That was a good deal. And now everybody had heard of Philly Abramo and his millions and it was clear that Philly Abramo was no longer going to be the only gangster on Wall Street.

As a result of Philly Abramo and his reputation for pulling down millions, Robert Lino had received a telephone call from Pokross about a guy showing up at DMN's office on Liberty Street who didn't belong there. This wouldn't have been a problem if the guy was just another stock promoter, but this guy was claiming to be with the Lucchese crime family and had announced that DMN was now going to be his.

Robert Lino did not need this aggravation. Here he was, a married man now, his wife a college-educated administrative a.s.sistant for a big corporation in New Jersey (and the daughter of a gangster). They were planning on having children. This was the new Robert Lino: family man. Unfortunately the old Robert Lino, Robert of Avenue U, had to surface occasionally to ensure the provider could provide.

Today's problem was the Padulo brothers, Vito and Vinnie. The two were registered stockbrokers in their late thirties who'd bounced from one boiler room to another and were now pushing stock for DMN. Jeffrey Pokross had invited them in to push a couple of new stocks DMN was selling, and was paying them bribes to do it. The two companies were called Beachport Entertainment, which allegedly put on ice shows, and International Nursing, which owned a couple of nursing homes on Long Island but was pretending to be a multimillion-dollar operation caring for seniors coast to coast. For weeks Jeffrey wrote checks to the Padulo brothers to hype both Beachport and International Nursing. As far as he knew the Padulo brothers were not affiliated with any particular crime family. Jeffrey was wrong. He realized his mistake the morning a guy with gla.s.ses called Joe Baudanza showed up at the offices of DMN along with ten of his own personal brokers without a legitimate license between them. Baudanza announced that they were setting up shop at DMN, as the Padulo brothers had requested.

A broker named Robert Gallo was there when it happened and he called Jeffrey Pokross, who right away called Robert Lino. Robert Gallo knew this Joey Baudanza from the neighborhood. He called him "the kid with the gla.s.ses."

"This kid with the gla.s.ses, he's up there with a whole crew," he told Pokross. "What's he doing up there? It's Robert's place."

Now Robert Lino was forced to drive over to DMN, and it wasn't even a Thursday. He went into Pokross's office and took this guy, Baudanza, with him. They came out a few minutes later and Lino went into another room with Pokross.

"How could you let this happen?" he said. Robert said he'd take care of it, and when he left, he wasn't smiling.

This was a big problem. It was like one group of pirates coming upon another group right after they'd opened the map and saw the big "X" in the middle. It meant the Bonanno family would have to sit down with the Lucchese family and figure out a way to divide up the spoils without seeming weak. This did not seem right considering that the spoils had been created by the Bonanno family in the first place. And it raised questions about the loyalty of the Padulo brothers. Who, precisely, had told them bringing in another Mafia family to DMN was a good idea in the first place?

A few days later Baudanza, the kid with the gla.s.ses with the Lucchese group, was out of DMN. That took care of the Lucchese group. Then the Colombo group showed up. This time it was the Padulo brothers again, whining about money. They had a different math than Jeffrey Pokross. They claimed DMN owed them $160,000 more in retroactive bribes, and they wanted it because they were out the door and headed for a boiler room operated by the Colombo family. Again Pokross called Robert Lino; again Robert Lino had yet another sit-down, this time with the Colombo family. Again he prevailed, and DMN didn't have to pay the Padulo brothers a cent. Out the door they went, leaving Robert from Avenue U with a bad feeling about Wall Street.

CHAPTER TWENTY.

January 19, 1996

By seven thirty in the morning, the crusaders of Wall Street marched toward the New York Stock Exchange, resolute in their pursuit of the Grail. The streets of Lower Manhattan were alive with the bustle of ambition: Broad Street, Wall Street, Beaver Street, Exchange Place, Maiden Lane. Each teemed with crusaders a.s.signed their mission. These knights were called stockbrokers, investment bankers, financial a.n.a.lysts, each the product of years of training. Instead of learning the skills of archery or fencing or hand-to-hand combat, these knights had immersed themselves in the princ.i.p.als of accounting, the language of economists, the calculus of profit. None wore a steel mail leotard or cast-iron helmet. They wore Burberry topcoats, Brooks Brothers suits, crisp white shirts, silk ties. None carried a broadsword or lance or shield. They wielded shiny leather suitcases with gold monogrammed initials, stuffed with earnings reports and 10-Qs. Their n.o.ble steed amounted to the Seventh Avenue IRT subway line.

In the crowd one soldier of fortune pressed forward, wrapped in winter coat and scarf, head bowed against the January wind. His name was Robert Grant, stock picker, and he pressed forth with the purpose of one who believed he would surely be richer by day's end. He was headed for his job at the Monitor Investment Group, and he didn't want to be late. When you're on a crusade, being late is simply not an option.

Like most crusaders, Robert Grant had trained for years to get to this place. He'd completed undergraduate studies and then obtained a master's in business administration. He believed he knew what he was doing. He could have gone to law school or med school or run a restaurant, but he chose Wall Street because that was where you made the most amount of money the fastest. Unlike for the knights of yore, this Grail was within reach, if you knew how to get it.

This was the time of year when everybody was done with the business of Christmas and Hanukah. This was January, that bleak series of dark days before the February trip to St. Bart's. The big fir in front of the Exchange was gone, and the statue of George Washington a block away at the old Federal Hall looked particularly frozen. The idea was to get from the subway into your office as quickly as possible, even if all you had to look forward to the first thing in the morning was yet another wretched meeting. That was Robert Grant's mission this morning. He'd been told to be on time.

Robert Grant was one of the new recruits at Monitor Investment Group's new office at 30 Broad Street, just a block from the Exchange. Here was the heart of moneymaking in America, and as 1996 dawned, boy was there money to be made.

The Street was hot. The tech-stock boom was creating an atmosphere of adventure. When the wild 1980s came screeching to a halt in the Crash of '87, Wall Street was seen as a volatile game of roulette, a kind of casino run by blue bloods. Now everybody had forgotten about that. Now Wall Street was the place to be. Innovation was rampant. All the way down in Mississippi Bernie Ebbers's World-Com was buying up little phone companies created by the breakup of AT&T at a pace fast enough that Bernie got himself on the front page of Fortune Fortune dressed like a cowboy. Ken Lay of Enron made the front page as a visionary, his new Houston-based company that bought and sold energy touted as the company of the next century. CEOs were celebrities. dressed like a cowboy. Ken Lay of Enron made the front page as a visionary, his new Houston-based company that bought and sold energy touted as the company of the next century. CEOs were celebrities.

And once again, stockbrokers were kings. The old masters of the universe from the eighties were now much cooler, mostly because everybody had become an investor. Not just old money capital but new money capital: the guy who owned the bagel store. The owner of the nail salon. The retired postal supervisor. The Kmart stock clerk. Cable TV was devoting entire channels just to stock market gyration, and people were watching. In barbershops, on the rows of TVs at the mall retail stores, at the airports. Forget baseball. Forget politics. Forget what's happening in Afghanistan.

Money was the new Crusade.

It all seemed so easy. It was practically guaranteed that if you paid attention, you could make 1,000 percent profit overnight. The returns were astonishing. You just had to act quickly. Your neighbor the hairstylist just made in one week $10,000 betting on Amazon. How could you ignore that? And in order to make real money you had to risk real money. Why not take a chance on a margin account? Sure, they could call it at any time, but what was the risk when the market was so bullish? If your neighbor the hairstylist could do it, so could you.

But for the troops out there slogging in the trenches along Broad Street and Wall Street and Exchange Place, the actual making of money, the job itself-it could be so profoundly tedious. Especially during meetings. This was what Robert Grant had to look forward to: a roomful of guys bored out of their skulls trying to stay awake through the latest pitch, the newest shtick, the most up-to-date patter. Each new strategy was supposed to produce more customers willing to buy product, which was supposed to mean more commissions. But mostly the newest pitch was just a warmed up version of the previous pitch. It was all pretty much the same. Keep the customers moving. Keep them believing that they must act fast. Momentum was the key. Never get too specific with numbers. Most of the material Grant had been given about the companies he pushed was pretty vague anyway. There wasn't a whole lot of detail about a.s.sets. It was hard to tell from the prospectuses whether any of the companies had any real track records to speak of. But from the perspective of the broker working the customer, it really didn't matter. Just keep the monologue going. Overwhelm them with the urge to make money fast. Robert Grant didn't need a meeting to tell him that. All he needed to do was get on the phone with a potential client and throw that slider over the plate.

The big push at Monitor the past few weeks was a company called Reclaim, which allegedly recycled roofing shingles. Environmental spin was always effective. Somehow it was easier to sell the idea of profiting while saving the planet. There were dozens of companies like this one out there. Monitor was pushing Reclaim under the symbol ROOF. Grant's job was to cold-call, often to seniors, usually in the Midwest. He was handed a list of names. He didn't ask where they got it. He didn't really think that these people could be his own grandparents. He just made the calls and performed the pitch.

By the time he arrived on the scene, Monitor had already paid off the market makers to drive up the price, guaranteeing them against a loss. The Monitor insiders were buying Reclaim at 25 cents a share, buying them up through offsh.o.r.e sh.e.l.ls, knowing they could sell after forty days. The market makers drove the price up to $2.50, then Grant and the other brokers at Monitor went to work in the retail market. The brokers were paid by cash or check to pump it up further. This was going on in New York and overseas. There were rumors that suitcases filled with cash were coming and going from Germany. When they got it to $6, everybody on the inside was going to dump as fast as they could.

So far as he knew, Robert Grant was holding up his end, snagging customers across the nation. The only warning sign he'd experienced was the repeated admonition not to let his customers unload their Reclaim. Not yet. If they insisted, Robert had to find somebody to sell it to. It was as simple as that.

Robert Grant and another broker, a sometime friend named Eric, arrived at Monitor around 7:45 a.m., right on time. Both were told to report to the conference room immediately. They hustled in even before they had their coffee.

The minute he opened the door to the room, Grant realized this was not the usual pitch meeting. Mostly he realized this because once he stepped into the conference room, he was immediately whacked in the face with an office chair.

Robert Grant went down on the carpet and curled up in a fetal position. The guy with the chair was named Bobby Gallo.

Robert Grant knew Bobby Gallo only as some creep from Brooklyn who seemed to hang around the office. The guy didn't actually work, as far as anyone could see. He was from a different world than Robert Grant. He hadn't bothered with the abstract knowledge of the MBA. He hadn't spent any time in school at all. His knowledge came from the streets of Brooklyn. While Robert Grant was learning about the Laffer curve, Bobby Gallo was learning how to coldc.o.c.k a guy so he couldn't get up. Robert Grant used a calculator; Bobby Gallo used fists. The rumor was Bobby Gallo had actually pa.s.sed his Series 7 exam, but Robert Grant couldn't believe such a thing was possible. He could believe that Bobby Gallo was now hitting him about the face and back with an office chair.

As he flailed away, Gallo kept screaming something about taking money from a man's family. Then he'd swing again with the chair. He was also kicking Robert Grant in the sides, in the back, in the legs, wherever he could. He seemed to be enjoying himself. Grant could see that a couple of other guys built more or less like Gallo were also kicking at Eric, who was also on the carpet, writhing and howling in pain.

Robert Grant managed to slide himself under the conference table and come up on the other side. Maybe it would have been better if he had learned archery or swordsman ship or hand-to-hand combat like a real knight, but here he was, slinking his way out of the conference room and into the women's bathroom.

He slammed the door behind him. There he lay, bleeding, his chest heaving, his face bruised, his sides and back racked with searing pain.

It had all happened so fast.

He remembered screaming, "What the h.e.l.l are you doing?" over and over, but couldn't remember what Gallo and the other guys were yammering on and on about as they went to work on Robert and Eric. Something about trying to take customers away from Monitor to jump to another firm. He had no idea what they were talking about.

This kind of behavior was not something he'd expected to find on Wall Street. He didn't remember the use of office chairs being discussed in business school. He didn't know guys like Gallo were part of this world. He'd been told Wall Street was all college guys, lots of preppies, plenty of fraternity brothers. But this? This was a version of Animal House Animal House he hadn't thought existed. he hadn't thought existed.

Lying on the floor of the women's bathroom, Robert Grant figured a guy like Bobby Gallo hadn't thought up the idea of busting up his morning himself, so he decided to make a plan. He'd get the h.e.l.l out of Monitor, go directly to Beekman Hospital and make sure they took some good photos of his injuries. Then he'd make three phone calls.

First he called his boss.

Then he called the cops.

Then he called a good lawyer.

CHAPTER TWENTY-ONE.

Warrington sat in his cubicle at Monitor, watching the ticker for signs of s.p.a.ceplex. The market makers had already gone to work and now they were out in the retail market, driving the numbers higher. All the brokers at Monitor's three offices were on the case, and there was a serious compet.i.tion to see who could sell the most in one day. Jimmy Labate walked up to Warrington's cubicle and slapped a set of car keys on his desk.

"Sell fifty thousand shares in the next fifteen minutes, and this is yours," he said, pointing at the keys. Warrington could see the Mercedes logo on the key chain.

"What color is it?" he asked.

"Green," Labate answered, and then he stood there, waiting.

Warrington didn't really like Jimmy Labate. He usually avoided him. They were from different worlds. Warrington was a guy who'd pay somebody to fix his clogged up sink. Jimmy would just fix it. Warrington had a prep school education and almost four years of college, and a Series 7 broker's license. He was a man of reason. Jimmy probably didn't make it out of high school, and when he approached things, he relied exclusively on the threat of physical harm to get what he needed. Frankly Warrington considered Labate to be a moron. He was also just a little afraid of the guy. Jimmy and his like were clearly at Monitor for one reason-to enforce the no-sale policy. He'd heard rumors regarding how this was accomplished. There was the story about the broker who'd tried to jump to another firm who was beaten b.l.o.o.d.y with an office chair. There was the broker who was punched in the nose so hard they thought he was dead, and when he woke up, Jimmy threw him out on the street.

Then there was the little misunderstanding. Warrington had been told by several sources that Jimmy carried a weapon. He'd never actually seen it, but Jimmy often wore his knee-length leather jacket into the office, so who knew? A few weeks back, Warrington had looked up from his computer to see Jimmy standing just inches away, barking at him to open up his trading history. Now! Warrington had looked up at Jimmy and then down at his waistband, which was a few inches away. He could clearly make out the grip of a pistol tucked inside. He opened up his computer and showed that he hadn't made any trades in the last hour. Clearly Jimmy had thought he had violated the no-sale policy. Jimmy smiled and patted Warrington on the back. Warrington smiled, but only with his mouth. He hoped his eyes weren't revealing his mixed sense of fear and relief.

Mostly Jimmy was always in a lousy mood. He seemed to dislike just about everyone at Monitor except Cary Cimino. He certainly didn't like Jeffrey Pokross, who openly manipulated Jimmy whenever possible. And he was seriously paranoid. He would often be seen whispering to his pals in the hallway and stopping the conversation when Warrington walked by. He probably disliked Warrington, but at that moment, with those car keys sitting in front of him, Warrington decided that Jimmy's challenge was just business, nothing personal, and he went to work.

He began calling customers until he found one who was around. It was his friend at the Bank of Monaco. He made his usual pitch. He made it clear this would be a fast turnaround, but that his friend had to act quickly. He didn't guarantee the stock against a loss, but he did offer the guy substantial discount shares for his own personal use that amounted to a bribe. Naturally the guy-who was overseeing inst.i.tutional money, which somehow was less personal than an individual's money-accepted.

Warrington filled out the buy ticket as Jimmy Labate watched. He hit the send b.u.t.ton, and in minutes, the Bank of Monaco had purchased not 50,000, not 75,000, but 100,000 shares of s.p.a.ceplex, the next Disney World that was really just an amus.e.m.e.nt park on Long Island.

Jimmy Labate smiled and walked away, leaving the keys right where they were.

At lunch, Warrington walked downstairs and over to a spot in a parking garage down the street. In the corner sat a sea green Mercedes 580SL, brand-new. Warrington sat in the car and turned the ignition. It made a nice quiet sound that implied power and affluence, and it all belonged to Warrington.

The name of the company was Discovery Studios Inc. The idea went like this: create a chain of storefronts in malls across America to recruit potential models. It was to be a kind of Star Search Star Search for the next "it" girl, with aspirants paying fees to get their photos taken and sent off to a big name agency. The storefronts would also market Discovery Studios cosmetics and other beauty products, and would offer the Discovery Studios advice of "beauty consultants." Finalists would win contracts with big-league agencies in New York City. for the next "it" girl, with aspirants paying fees to get their photos taken and sent off to a big name agency. The storefronts would also market Discovery Studios cosmetics and other beauty products, and would offer the Discovery Studios advice of "beauty consultants." Finalists would win contracts with big-league agencies in New York City.

It was all Warrington's idea. Warrington was still doing well with Cary and Jeffrey on new stock deals, but he felt it was time to personally branch out. It was time to be an entrepreneur.

This would surely be Warrington's way out of the office grind. By now he was officially a father, and he wanted to actually act like one. Francis Warrington Gillet IV was all of two months old. He'd been born May 21, 1996. Warrington was thirty-seven years old. It was time to get serious. No more fooling around. He wasn't going to be like his own father and hit the road for Palm Beach once the responsibilities of parenthood kicked in. He was going to do it right. That was his promise to little Warry the Fourth and to Warry's mother.

Discovery Studios was the key. He'd already scared up some big-money investors through Gillet family connections. He'd persuaded Cornacchia the Trivial Pursuit guy to dump some money into Discovery, and he'd convinced socialite Mary Lou Whitney, the doyenne of the Saratoga Springs set and former actress, to join his "beauty advisory committee." He also claimed to have two actual princesses-Bea Auersberg of Austria and Loretta Witt genstein of Germany-signed up to help market Discovery Studios' beauty products overseas. Already it glittered with legitimacy.

He was also borrowing a page from the Jeffrey Pokross playbook; he was going to reverse merge the thing into another sh.e.l.l company, then pay off his former Monitor broker buddies to push it in the retail market. Cary Cimino had been very helpful with that, even recommending a new guy from a company called Thorcon Capital inside the World Trade Center.

The guy's name was Nick Vito, and he was very helpful. He had overseas customers and he was happy to promote Discovery, knowing full well it had no real a.s.sets and was not much more than a dream inside Warrington's imagination. All Nick wanted in return was some discount shares, preferably wired to certain bank accounts overseas. Warrington also offered to gift Nick free shares of restricted stock in Discovery equal to the number of shares Nick could convince his clients to buy. This provided Nick with an enormous incentive to convince his clients to buy stock in Discovery. If the clients bought a hundred thousand shares, Nick Vito would get a hundred thousand free shares in Discovery. Of course, Nick would not be mentioning anything about free shares to clients.

On a sweltering afternoon in July 1996, Warrington made his way downtown to Thorcon's office the World Trade Center. When he arrived, Warrington made it clear to Nick that it was time to move on the Discovery stock. He said several other broker dealers were getting ready to make a market for the stock, and that it was now or never for Nick Vito to jump on board.

"What's in it for me?" Nick asked.

"This is a gray area," Warrington replied. "I know I'm not supposed to be giving you cash or stocks. Do you have an overseas account?"

The plan was simple. Warrington arranged for a Swiss banker he knew to wire money into Nick Vito's brokerage account in the Bahamas after Nick got his clients to buy Discovery stock. Back and forth they went about precisely how to do this, and after all the dancing around, Warrington suddenly started speaking in plain, declarative sentences whose intentions were clear. The payment would be worth 30 percent of the value of however much Discovery stock Nick convinced his clients to buy.

Warrington preferred that it be in cash. Thirty percent was the best he could do because he owed a percentage to Cary.

Nick was very helpful. He suggested that the Swiss bank could set up a consulting agreement with him to justify the payment. Warrington said no way. Instead he promised that the Swiss bank would transfer the money from a bank in the Bahamas to Nick's account in the Bahamas one day after the Discovery stock purchases were settled. And he brought up the free restricted stock idea, making sure to remind Nick not to mention this little side arrangement to the National a.s.sociation of Securities Dealers. They had already been giving Warrington headaches about the Discovery Studios stock offerings, and headaches he didn't need. He made sure to add that it would probably be best if they didn't mention the free stock to their mutual acquaintance, the guy who'd introduced them.

Nick agreed. Warrington's foray into the world of the entrepreneur was under way. In no time at all, girls across America would be signing up at their local malls to become the next big discovery. It was Warrington's way of spreading around the wealth and fame. It was his little gift to America.

Spring 1996