Blood Brothers (15 page)

Bert Siwell began the next day’s proceedings by putting Bjornsen Pharmaceuticals’ CFO, Tim Hawkins, on the stand. Hawkins was a CPA and a certified fraud examiner who had, he testified, been brought in to clean up the company’s books after Gunnar had nearly driven the company out of business through financial mismanagement. Hawkins testified for nearly half a day about the cleanliness of the company’s finances, the high caliber of its auditors, and so forth. It was dull stuff, and he was not a compelling witness. Despite Bert Siwell’s one-liners and other attempts to keep things interesting, Ben could see Judge Reilly’s eyes glazing over after fifteen minutes. Objecting would simply wake up the judge, so Ben kept his mouth shut and watched.

Siwell finally finished his direct questioning at ten minutes to noon. The judge glanced at the clock on the wall. “Do you want to wait until after lunch to do your cross, Mr. Corbin?” he inquired.

“No, Your Honor,” Ben said as he walked up to the podium. “This will be quick. Mr. Hawkins, is it typical for companies to have two sets of books with different numbers, one set for internal use only and one to show to auditors?”

“As I told Mr. Siwell on direct, that may be typical in Norway,” answered Hawkins in a dry, professional voice. “I’m not familiar with their accounting practices.”

“But here in the US, it’s a sign of fraud, isn’t it?”

“It can be, but it can indicate other things as well.”

“But in the majority of cases, it indicates fraud, right?”

“Not if the second set of books is for tax-accounting purposes,” the CFO countered, making a steeple of his long fingers as he spoke. “The IRS’s rules can be different from GAAP.”

“Are tax-accounting books typically marked ‘Internal Use Only’?”

“No,” conceded the witness.

“Okay, so putting aside the tax-accounting possibility, is keeping two sets of books usually a sign of fraud?”

“I suppose so.”

“In fact, it indicates fraud in the vast majority of cases, doesn’t it?”

“I suppose that’s the case.”

“No further questions.”

By ten in the morning, the drugs had been repackaged, relabeled, and reloaded into Pyotr’s van. He and his team had managed to make up the time lost by the Norwegians and then some. He was in a good mood as he drove down the claustrophobic little alley and hummed along with Ludacris’s “Money Maker” as it blared out of the van’s tinny speakers. Maybe George would let him keep some of the thousand dollars he had saved when the fisherman showed up late, he reflected. Probably not, but maybe.

By ten fifteen, he was on the highway heading from Yuragorsk to Murmansk, the largest city in the area. Barring a major delay, he would have no trouble making it to Murmansk in time to meet the DHL early-shipment deadline. There was a DHL office in Yuragorsk too, but he preferred to ship from Murmansk, in case the police ever decided to try to track any of the packages back to their senders. As a further precaution, he paid a DHL clerk to mislabel the packages to show that they had been shipped from a Moscow suburb rather than Murmansk.

The police shouldn’t be a problem, of course; Cleverlad.ru was a licensed pharmacy and could legally import and export drugs. However, those exports were illegal in many of the countries where their customers lived. George had said that Western cops had tried to hack into the company’s website at least twice, and there were rumors that they were pressuring the
militsiya
to go after businesses like Cleverlad.ru. Also, there was the fact that some of their higher-value imports came through unorthodox channels—such as the holds of the
Agnes Larsen
—and therefore avoided customs delays and duties. So Pyotr drove to the DHL office in Murmansk rather than the one down the block. You could never be too careful where drugs and money were involved, even in Russia.

Neither side scored many points during the remainder of the preliminary-injunction hearing. Siwell brought up Gunnar’s “crawling to me” e-mail whenever he could and kept hammering on the fact that no one disputed that the Neurostim formula belonged to Bjornsen Pharmaceuticals. Ben countered by asking every opposing witness whether they thought it was okay for the company’s president to keep a secret set of financials in a cabinet behind his desk.

The judge didn’t rule at the end of the preliminary-injunction hearing. Instead, he took the matter “under submission” and told the parties to return at eight thirty the next morning to hear his ruling. So both sides boxed up their extra copies of exhibits, highlighted transcripts, Post-its, pens, accordion folders, and other detritus that litters the legal battlefield.

Ben, Noelle, and Gunnar, who had insisted on helping to carry files back from court, trooped back to Ben and Noelle’s offices. They stacked the boxes against one wall of the conference room and sat down to do a postmortem on the hearing. “The judge didn’t rule right away,” observed Gunnar as he eased onto one of the padded chairs. “Is that good or bad?”

Ben shrugged. “It’s bad in that it means that none of us is likely to be able to focus on anything for the rest of the day. Beyond that, I doubt it means anything one way or the other. This is a big decision for him as well as us. Whatever he does will probably show up in the papers and may even affect his reelection chances. I would have been surprised if he’d ruled without taking some time to think it over first.”

“What do you think he’ll do?” asked Gunnar.

“Tough call,” replied Ben. “I’ve been wondering about that for the past few days. On the one hand, your brother and his legal team don’t have any real response to those financials you found. I think it’s pretty clear to Judge Reilly that fraud was committed and that Karl either knew about it or intentionally didn’t know about it. Either way, he shouldn’t be running the company, at least not without a team of outside auditors keeping a very close eye on him.

“On the other hand, Bert Siwell did a good job of hammering home that the XD-463 formula belongs to Bjornsen Pharmaceuticals. He also managed to use that e-mail pretty effectively against you to make it look like you’re withholding information as a power play, not because you’re concerned about what would happen if Karl got hold of that information.”

Gunnar stirred in his seat and the leather chair creaked loudly. “I . . . I suppose I can see how the judge might have gotten that impression,” he admitted. “So, how do you think he’ll rule?”

Ben grinned. “Sorry, I was taking a while getting to the point, wasn’t I?”

“You’re a lawyer,” Noelle said. “We expect you to take the scenic route.”

“Well, we’re almost there now,” continued Ben. “The gutsy thing to do would be to grant both injunctions—let the company have the formula, but remove Karl or install an auditor to make sure none of the profits disappear into some secret account. I don’t know if Judge Reilly is the type to make that kind of ruling, though. He’s new to the bench, and I don’t know whether he’s got the decisiveness to do something like that.

“All of that is a long-winded way of saying that I really don’t know what he’ll do. He could grant both injunctions, he could deny both, or he could come up with some compromise that he thinks is fair. The only thing I
don’t
think he’ll do is grant one side’s injunction request completely and completely deny the other side’s. That’s not his style. There won’t be a big win for you or Karl, only a small victory or a minor defeat.”

“I thought so,” said Gunnar. “All right, I think I’ll go home and pace a lot. It will be good exercise.”

“Bjornsen Pharmaceuticals versus Bjornsen,” the clerk announced at 8:35 the next morning. Ben and Siwell got up from the court benches and stood behind the podium, each a little to one side. A scattering of lawyers sat on the benches behind them, waiting for their cases to be called. Gunnar had come downtown to hear Judge Reilly announce his verdict and sat on the bench behind Ben. Karl wasn’t in the courtroom, which surprised Ben a little. Apparently, he had more important things to do.

“Good morning, Counsel,” said the judge. He held several typewritten sheets in his hands. “I’ve prepared a written decision, which you can get from the clerk after this hearing is over. I’ve considered the evidence and argument presented by the parties, including the demeanor and credibility of the witnesses while they testified, and I’ve decided to deny both injunctions. My reasons are laid out in my opinion, but in essence my decision is based on two facts. One, both sides raise substantial claims, but there will not be substantial prejudice to either from waiting for a full trial to resolve them. Two, both sides seek dramatic remedies. Neither party is asking me to preserve the status quo; you’re asking me to change it, and you’re asking me to change it in substantial ways. That may be appropriate after a permanent-injunction trial where all the evidence is fully developed and presented to a jury, but not now.

“I realize that this is an important matter to both of your clients, so I will give this case priority on my trial calendar. Mid-August works best for me, but check your calendars and talk to my clerk to set a trial date. I also want you to submit a stipulation regarding pretrial dates within seven days.”

Karl Bjornsen sat in his office, waiting for a phone call he didn’t want to come. Today was the thirtieth day since Bjornsen Pharmaceuticals had submitted its Investigational New Drug application for Neurostim. If the FDA wanted to issue a “clinical hold”—effectively a denial of the application—they had to act by today. The standard FDA procedure for issuing a clinical hold was for the responsible-division director and project manager to call the applicant to discuss the hold, and then follow up with a letter a few days later.

So when Karl had arrived at the office that morning, he’d told his secretary to screen his calls and take messages, unless the caller was from Bert Siwell’s office or the FDA. Bert’s call had come four hours ago, delivering the news—which Bert had predicted the day before—that Judge Reilly had denied both preliminary-injunction requests and was setting the case for trial as soon as possible. Bert was confident that he would win that trial, so his news had been essentially good from Karl’s perspective.

Now he waited for more good news—or, more accurately, non-news. He tried to read sales reports, but he couldn’t concentrate. At two thirty, he gave up and put the reports back into his in-box. He got up and walked over to the floor-to-ceiling windows that lined two sides of his office, which was situated on the top floor of the combined office building and production plant that formed the heart of Bjornsen Pharmaceuticals. The research labs, warehouses, and other ancillary structures were clustered below him in a closely built complex, like the stronghold of an ancient king. He and Gunnar could have allowed more space between their buildings, but they had planned to keep growing and didn’t want to have to scatter their facilities around the Chicago area like other companies. One of their favorite pastimes had been to sit in this office and debate where each new building would go and what it would look like. Karl looked down and pictured where the Neurostim wing of the factory would rise from the parking lot below him. “Now I can dream alone,” he murmured.