Damage Control by Timothy Gilbert - HTML preview

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Peter Hansen

“Peter Hansen,” I stated firmly into the receiver while glancing at my watch. I had a

10:30 a.m. appointment with Steven Angle, the lead singer for World Wind who just hit the 100

million albums sold mark last month.

“Peter, it's Martin….we're all set. The committee is announcing its recommendation for

Lycor this Friday…They are going to kill the drug,” Martin asserted into the phone. “I think Oleg

and his partner made a fine example out of the good doctor and his wife.”

“Well, I'm sure they scared the hell out of them,” I said. “Does the doctor still have his

kneecaps?” I let out a mild laugh, while leaning back into my chair.

Martin cleared his throat. “Uh...they had to kill them both, actually.”

The just poured coffee hit my thighs and I sprang out of my chair, thighs stinging and my

frontal lobe under assault.

“What?” I yelled back at Martin. “That wasn't part of the deal!”

I started to get dizzy, so I braced myself against the desk.

“Come on now, Peter,” Martin said in a less cheerful tone. “You're not exactly holding

the cards here, but you know that. We have been over and over this. The Violas own you, don't

forget that.”

Collapsed back into the chair with my scalded thighs, I put my pounding head into my


The Violas.

What had started as a simple money laundering deal had now morphed into a murdering

criminal network funded by my firm. Things were spinning out of control - I needed to find my

composure, somehow.

Timothy Gilbert

Damage Control


“Got it, loud and clear,” I told Martin. “I'll fall in line.”

That day, five off shore accounts funded a total of $110 million into the Swiss Bank

brokerage account of PLH, Inc. On Thursday of that week, PLH shorted the stock of Lycor

Pharmaceuticals at $84.

On Friday, Lycor Pharmaceuticals announced that its proposed cholesterol reduction

drug, Zintar, was causing too many kidney failures in the clinical studies. This announcement

sent Lycor stock plummeting because Lycor had been counting on Zintar's revenue to make up

for the wave of Lycor drugs opening up to generic competition over the next five years.

By Friday afternoon's market close, Lycor Pharmaceuticals stock was trading at $57.

PLH's profit: $25.39 million.

Not too shabby for a celebrity money manager used to dealing with the obnoxious world

of whiny sports and Hollywood stars.

By the end of 2001, PLH Capital was down 51% for the prior two years thanks to a huge

downturn in the stock market over that time. My celebrity investors were told a different story,

however, with the annual report going out to these clients in January 2002 showing a total loss of

only 10% since the beginning of 2000. The dot com bubble burst in the spring of 2000, but thanks

to the money laundering mercy of the Viola drug cartel deep from the heart of Mexico, I could

afford to lie to my celebrity clients.

The Violas started laundering money through PLH capital in September, 2001.

Everything went fine until my firm lost a chunk of their money in a pharmaceutical stock that

nosedived on bad news for one of its drugs. After that, things got much worse. Julio knew that

my firm had lost a lot of his money over a stock bet on the outcome of an important heart drug

study, so that is how he came up with this crazy inside information plan for these drug studies.

How he found Dr. Linder I never knew, yet, asking too many questions was risky business. I

Timothy Gilbert

Damage Control


should never have bet on that drug study; maybe I was trying to show off to Julio my excellent

stock picking skills, except, everything was made so much worse, instead. While the world of

money laundering was stressful at first, it became way less shocking and disturbing over time.

Nobody got hurt or even threatened – it took very little of my time. This drug study shakedown

was a different story because it was 100% disturbing and nasty and people got killed over it.

Shortly after this drug stock loss, I learned how the family had asked Oleg to start forcing

this Dr. Linder of Philadelphia to give up inside information about the pharmaceutical drug study

he was leading. If the inside information pointed to good news for the drug company, I was told

to buy the stock ahead of time, but if the information pointed to bad news, I was to short the

stock. This part of the strategy, including how much money to spend and what off shore accounts

to use, was just conveyed to me recently over the phone by Julio Viola.

Julio had only met me once, on a boating trip in August, 2001 that was hosted by the Lick

Brothers of Miami Beach. The brothers were in the middle of building an all-glass luxury condo

tower right on the ocean. The trip was on a Saturday and I was in Miami visiting a college buddy

of mine, Carl Williams, an amazingly successful real estate agent for the $1 million plus market

and very good friends with Bruce and Jim Lick. Their boat was half a football field long and

seemed to hold ninety to one hundred people easily. Only twenty of us were traveling on it that

day, however. When the flame throwing stilt walkers came onto the boat for the early evening

entertainment, I told Carl that he had outdone himself and reminded my old buddy that my

celebrity friends never invited me anywhere.

Julio began talking with me over the buffet dinner. He briefly described himself as a

Mexican industrialist, but he seemed more interested in my investment firm and peppered me

with questions about my asset size, number of investors and use of off shore accounts. The guy

had a really annoying nasal whistle when he laughed, making me wonder how he got anywhere in

Timothy Gilbert

Damage Control


business with it. The night drew to a close and Julio told me that he wished to invest some of his

money with my firm. I thought he was joking.

The following Monday, I found out just how serious he was. An acne-scarred, mustached

man in a crazily expensive dark blue suit was waiting for me in our lobby when I came in that

morning at 7 a.m., and he told me that he represented the Viola family. Judy, my receptionist, was

sitting at her desk, typing madly on the computer. The mustached man didn't offer up his name,

and quickly got to the point. $70 million had been deposited overnight in a Swiss bank account,

and, when the man told me how to move the money, it became clear that I was helping the Violas

wash their cash. Basically, I was told to move the money around various European accounts

before moving it on shore as a formal investment in my firm. A Belgian cement company, two

French steel manufacturers and a Spanish vineyard were all involved in the transactions. I would

have to coordinate nine different wire transactions that day.

The mustached man continued to talk and I began to panic because it looked like Julio

Viola was involved with a large drug operation in Mexico, and I was now deep into it. Granted,

my investment results thus far in 2001 were pretty bad, but I didn't need to descend to the dregs

of money laundering for a Mexican drug lord.

“There must have been a misunderstanding with Mr. Viola on the boat on Saturday,” I

told the mustached man while springing up from my office chair. The twenty years I had spent

building my firm were flashing right in front of me, like a sandcastle towering mightily just ahead

of a crashing wave.

The man smiled, though not in a friendly way. “There has been no misunderstanding,

you're wife's name is Claire and your sixteen year old son is Charlie, right?”

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Damage Control


I looked at him, crossed my arms, and leaned over the desk. “What, so you'll screw with

my family if I don't cooperate, is that it?” I yelled as softly as I could without being heard out in the hallway.

“Peter, I am just the messenger here,” the mustached man said while pulling out a

satellite phone from his bag. He dialed a number and began speaking in Spanish to someone on

the other end. After maybe twenty seconds, he handed the phone over to me.

“He wants to speak to you.”

Grabbing the phone, I had a pretty good idea who was on the other line.

“Hello?” I said into the satellite phone. There was a loud hissing sound on the line.

“What's this about me screwing with your family?” the voice asked. “You whined to me

Saturday night about the lousy stock market, your investment results and your need for new

investors, so here I am helping you out.”

It struck me quickly that Julio Viola wasn't somebody you yell at, so I tried to calm

down. “Please, Julio, this is all too complicated for me and I'm only looking for much smaller

sized investors right now.”

“Look, do as Martin tells you, and you won't need to worry about anything,” Julio said


“There's no changing your mind about this, is there?”

“No, Peter, but this is a good thing, a very good thing, just remember that, alright?”

“Okay,” I said. Taking a huge breath, I handed the phone back to Martin. He talked with

Julio for another minute before hanging up.

By noon that day, we had completed all nine wire transactions.

Timothy Gilbert

Damage Control


September 1, 2002

Morristown, NJ