Money Laundering
December 1991, Harvard Yard.
A pale wash of sunlight fell through the gray clouds.
Along the paths between the red-brick buildings, snow had piled up overnight, and the footprints of passing students marked it in neat, winding lines.
Crunch—crunch—crunch—
I lifted my head and looked out over the center of campus.
Even the shoulders of the John Harvard statue standing in the middle of the Yard were capped with snow.
Behind the statue stood University Hall.
A granite building erected in 1815.
One of Harvard’s oldest administrative buildings, with the student council offices and countless meeting rooms in its basement.
I went down to the lower level by the stairs along the side of the building.
Under the pale sunlight spilling through the windows that opened onto the ground level, I saw an old sign that read Meeting Room Reservations.
Inside the reservation desk stood a female student with blonde hair tied in a ponytail, organizing a thick ledger of bookings.
Her face was small and her features were strikingly clear; for some reason, she looked familiar.
Who was she again? I think she was one of my freshman classmates.
I rummaged through the memories of my past life, then gave up almost at once.
What was I going to do, try to identify a classmate I’d only known by name and face decades ago?
But the other party didn’t seem to think that way.
“Oh? Sanha!”
The blonde girl waved at me brightly.
“Long time no see!”
“Huh?”
“What, you don’t remember me? We took a class together! In natural sciences—Science A-37: The Physics of Sports! At Soldiers Field!”
Ah. Now I remembered.
She smiled at me with obvious delight.
“I’m Caroline. Caroline Channing. You’re literally the first person ever to forget my name.”
Back when I’d been taking PE classes, there had been a classmate who’d relied on his size and tried to act rudely. I’d put him in his place once.
He’d been Drake Tomlinson, a football star from a prestigious high school—and after the time I’d taken him down with a liver shot in a boxing match, the number of female classmates who took an interest in me had suddenly increased.
Caroline had been one of them.
She kept talking to me while I wrote my name in the application ledger.
“You’re here to reserve a room? Meeting someone?”
“A tax accountant.”
“Wow, a tax accountant? Just like my dad. He used to run a business too, and back then he was always meeting with the accountant. Are you doing something like a business too? Oh, right, I heard you even beat the professor in your investment theory class? When I heard that, I was insanely jealous that I hadn’t taken that class too! But I’m not exactly the smartest person, so maybe that class would’ve been too much for me······!”
She laughed giddily and kept talking without even waiting for me to respond.
“If you’re booking a room, take 91. It’s clean. I just finished cleaning it.”
“You work here?”
“Yep. Work-study. It’s a program run through the school’s financial aid office—they find you an on-campus job, and the federal government subsidizes part of the wage.”
“That’s a good system. Then I’ll take Room 91 for two hours.”
“Sure. You can stay longer too. The official rule is two hours, but I can extend it a bit on my own authority!”
As Caroline wrote my name in the reservation ledger, she suddenly stopped moving her pen.
She opened her mouth as though she wanted to say something, then closed it, then opened it again.
“Um······ Sanha.”
“Yeah?”
“Do you have time this Friday? Or are you going to be buried in classes?”
“The semester’s almost over. Why?”
“There’s a dance party at the end of the term. All the freshmen go.”
Caroline averted her gaze slightly and continued.
“I’m looking for someone to go with······ and I was wondering if you might have time.”
A semester-end dance party. That was one of the big Harvard freshman events, too.
Plenty of future influencers and soon-to-be heavyweights in politics and business would be there, so there was no reason not to show up and make my face known.
“Sure. Let’s go together.”
“Wow! Really?”
When I nodded without much thought, Caroline looked as if she might jump out of her skin with happiness.
“I’ll get dressed up properly! You won’t regret it!”
She handed me the key to Meeting Room 91.
Creaaak—
When I opened the door to Meeting Room 91 and stepped inside, I found an old oak table and four high-backed leather chairs.
Shhhhhh······
Steam leaked from the aging radiator on the wall.
I spread out the documents I’d prepared in advance on the table and waited.
About ten minutes later.
Knock, knock—
The door opened, and a middle-aged man with magnifying glasses perched on the bridge of his nose walked in.
He was in his early sixties, with a thin frame and sparse gray hair.
His suit was neat, if stuck in a style that seemed at least ten years out of date, and his shoes were polished to a shine.
This was Soren, the tax accountant recommended by Victor’s father, Wolfman.
Uncle Wolfman had described Soren as “a man stricter than an IRS employee,” and after meeting him, I found that assessment accurate.
He was the type to leave no trace of anything that might draw scrutiny when filing taxes—extremely meticulous, down to the last detail.
“Welcome, Mr. Soren.”
“Mr. Lee. It’s been a while.”
Soren sat across from me and took a stack of papers out of his briefcase.
Receipts and ledger copies from after I’d acquired several gas stations in Garden Queens, including Morgan Oil.
But the business name on these records was Sanha’s Antiques.
I was creating legitimate revenue by reporting the cash income from the gas stations to the authorities as profits from antique sales and rentals.
So-called money laundering.
“All right, let me start with this quarter’s settlement results.”
Soren adjusted his glasses and opened the ledger.
“The largest purchase came from the account of ‘Anonymous Collector J.’ A 1954 jukebox for $14,000, a vintage Coca-Cola vending machine for $8,000, a set of 1950s tin robots for $6,000, a 1940s Texaco gas pump for $12,000, an original Route 66 neon sign for $9,000, a 1958 Seabird pinball machine for $7,000, an RCA Victor vacuum tube radio for $4,000, a 1950s Ford dealership enamel sign for $5,000······”
Anonymous Collector J was a fictional person I’d invented.
A quirky old collector from Texas.
In this business, elderly collectors who preferred cash transactions were not exactly rare.
There were all kinds of people in the trade—those who wanted to liquidate collections they’d spent a lifetime gathering while avoiding tax issues, those who carried cash envelopes and dealt face-to-face without ever touching a bank account, those who offered absurdly high prices for things that looked worthless to everyone else.
Soren, a master of laundering money, had designed J’s entire persona, and I was laundering oil money according to that script.
Get J’s signature on the bill of sale, record the cash receipt, and report every cent of the tax without missing a single dime.
From the IRS’s perspective, there was nothing suspicious.
Why would they bother someone who was trying to pay more taxes?
“The rental income side is going smoothly too. $8,000 for a long-term rental of a 1950s diner set to Paramount’s prop team, $3,000 for a vintage radio set for a Universal TV drama shoot, $2,000 for two 1940s vending machines rented for Coca-Cola’s company anniversary event, $4,000 total for three Manhattan vintage-themed party rentals, $1,500 for a neon sign collection rented to a Los Angeles music video crew······”
The rental income was even cleaner.
The items remained right there in storage.
But aside from the ledger, which I could manipulate at will, there was no physical evidence of who had rented them and when.
To prove fraud, they would have to prove the rentals never happened—but how could anyone prove something that didn’t exist?
The antiques and art pieces never moved from their place, while the cash simply appeared in the books.
Besides, antiques didn’t have fixed prices.
The same jukebox might sell for $500 to one buyer and $10,000 to another.
There was no objective standard to prove whether the price was justified, so I was free to set it at whatever amount I wanted.
I was pumping crude from secret wells, refining it, selling it, and disguising the entire profit as revenue from antique sales and rentals.
It’s not tax evasion if I’m paying all my taxes in full, even if it’s in a different industry.
No matter how bad the recession was, no matter how rampant discrimination against Asians might be in this era, if I was going to make money, I at least intended to keep a minimum level of decency.
At last, Soren closed the ledger and said, “This quarter’s net profit has exceeded two million dollars before taxes. We’ll report conservatively and on the high side. Just as you requested, Mr. Lee.”
“Good. Please always keep it conservative.”
I took a leather notebook from inside my coat and placed it on the table.
“What I’d like to consult you about this time is this. A list of the small and midsize companies I plan to acquire from here on out,”
Soren took the notebook and opened it.
[Black Gigantia Drilling Solutions - Founded in 1989, based in Midland. Assets: two 2,000-horsepower land rigs, four mud pumps, 3,000 feet of casing pipe for drilling, three Texas drilling permits. Reason for bankruptcy: drilling contracts canceled due to the oil price collapse. Estimated auction price for creditors: $400,000.]
[Pinkfoot Goliath Drilling Company - Founded in 1978, based in Houston. Assets: two horizontal drilling patents, one deep exploration algorithm patent, shale analysis method license, two mineral extraction permits in Massachusetts. Reason for bankruptcy: management vacuum after the founder’s retirement. Expected acquisition price: $300,000.]
[Brazilian Black Geological Exploration Institute - Founded in 1972, based in Boston. Assets: four petroleum geologists, eight drilling engineers, two federal exploration contracts. Reason for bankruptcy: inheritance dispute after the founder’s death. Expected acquisition price: $250,000.]
[King Baboon Pipeline Service - Founded in 1985, based in Tulsa. Assets: 80 miles of small pipeline, six storage tanks, twelve transport trucks, midstream refining technology. Reason for bankruptcy: major client bankruptcy. Creditor negotiation price: $350,000.]
This was the list of companies I needed in order to develop oil fields and gold mines at the same time.
I needed their equipment, patents, personnel, and technology—and conveniently, they were all being sold off for a pittance in the middle of a recession.
Soren ran his eyes over the list and then looked up.
“Drilling company, geological exploration, pipeline······ these are companies that develop oil and gold mines. Are you planning to expand into the energy sector?”
“Yes. If you try to develop an oil field or gold mine from bare land, the environmental impact assessment takes a year, the drilling permit takes another year, and equipment procurement takes yet another year. But if I acquire these companies, the permits and equipment come with them all at once.”
“A rational approach. Especially in a recession like this······”
I pointed to the first item in the notebook.
“The 2,000-horsepower land rig held by Black Gigantia is a brand-new piece of equipment delivered by Caterpillar in 1988. A new one costs four million dollars, but the current creditor auction price is four hundred thousand. If I buy the company and resell just the equipment at fair market value, it’s already a profitable deal.”
To put it differently, it was like buying a bass at the fish market for one dollar, then taking the minnow out of its stomach and selling that for ten.
The auction market at the moment was littered with treasures like this.
I continued my explanation.
“First I’ll use six hundred thousand dollars as seed money to secure a bank loan, and I’ll also apply for the Texas state government’s energy revival fund. If you acquire a failed company, you can receive government support of up to twenty percent of the acquisition price on the condition that you preserve employment for the workers.”
“A freshman college student acquiring bankrupt drilling companies one after another is unprecedented in American history, but······ on paper, there doesn’t seem to be anything wrong with it. You should be able to receive the government subsidy without issue.”
“Yes. But before that, I’d like you to set up the holding company first.”
“And the name?”
I thought for a moment.
Since the business had begun with my father’s gas station, Lee’s Gas & Service, I wanted to keep that lineage alive.
“······Let’s call it Lee Energy.”
Soren picked up his pen and wrote it down.
“I’ll send you a draft of the incorporation documents for Lee Energy by next Monday. I’ll also secure the creditor contact information for the companies you mentioned earlier. Ah, should I work with that lawyer you mentioned last time? Vito······”
“Vito Hamilton.”
The conservative tax accountant Soren and the aggressive lawyer Vito seemed like a surprisingly good fit.
The two of them would complement each other’s weaknesses and build the framework of my company.
“I’m counting on you, Soren.”
“Of course. At first I only thought I should work hard because you came through Mr. Wolfman’s introduction, but······ now I’m working hard because I’m actually enjoying it. I’m far too curious about your next move, Mr. Lee.”
Soren and I shook hands firmly.
On the way to the dormitory.
Snowflakes drifted through the light of the streetlamps.
My mind was filled entirely with the list of companies to acquire and the blueprint for developing oil fields.
And then.
“······?”
Someone was leaning against the brick wall at the entrance to the men’s dormitory.
Curly blond hair. Blue eyes.
Grace stood there in a thick coat, her breath visible in the cold air.
“Grace? What are you doing here?”
“······.”
Grace lifted her head.
Snow had gathered on her shoulders and hair, so it looked as if she’d been waiting for quite a while.
She looked at me in silence for a moment before finally walking toward me.
“Sanha.”
With her voice low and subdued, Grace reached out.
She clutched the sleeve of my coat and continued in a small voice.
“······Help me.”