MC Bookstore Chapter 78 Firewall Project
Chapter 78 Firewall Project
"She's too fair-skinned and too rich. Look at the clothes and accessories she's wearing, they're all designer brands from high-end department stores, things that ordinary people like us can't afford."
"Zick, you need to think this through. You two are from two different worlds. My family runs a small business, and her? Hollywood, a big star. Can you two live together?"
Old Rossi's words left Zeke both amused and exasperated. He helplessly shrugged, "I'm way richer than her now, you know. And I'll only get richer in the future, so don't worry about it, Papa. I actually have something I wanted to tell you."
"Help me find a reliable person in the community, preferably older, the kind of honest, upright, and well-regarded retired old man. I'm planning to start a few companies and need a reliable 'scarecrow'."
"You're not planning to do some illegal business, are you?" Old Rossi's expression changed.
"It's a legitimate business. I need to produce merchandise for a band, which requires dealing with sweatshops. I don't want to do it myself, so I just find someone to shield me."
"It's just a nominal position with a fixed salary. But the candidate needs to be approved by the bigwigs at Poly. Once you've chosen someone, take them to the bigwigs for a look."
"Why don't you come to me if you have such a sure-fire, easy, and respectable opportunity?" Old Rossi retorted immediately. "Am I not more reliable than anyone else?"
"That's precisely why I can't let you be at the forefront. What if something happens at the sweatshop? Wouldn't you be implicated?"
"I've arranged a more secure position for you. I'll set up a legitimate trading company, with you as the general manager, fully responsible for liaising and placing orders. We'll hand over the orders to that 'scarecrow' shell company, and then the shell company will use the orders to secure financing and a loan for working capital. They'll then connect with the factory and sign cooperation contracts. Whatever happens afterward, it won't be our problem."
This was a framework that Qi Ke came up with based on the idea of the Poly Group bosses using "scarecrows" as a cover. He felt that this kind of operation was perfectly feasible, and he didn't even have to spend any money himself, without taking any risks.
He discussed it with Tino, and instead of cooperating with Jimmy, who wasn't a formal member, they decided to directly approach the powerful and well-regarded Poly Group boss, who was also involved in the sweatshop Wario family.
Moreover, the Poly Group tycoons can also handle financing. The Lucchese family is skilled in union control, and they control a lot of union pension funds. These funds are basically their slush funds. It is very easy to borrow money from them for this kind of sure-fire business, and it is also legal on the surface.
Zeke's only concern was sweatshops. Although the gangs usually managed to keep things under control and rarely had problems, what if something did happen?
If something happens at the factory, the police will open the ledgers, and the first page will be:
"On [Date], I received a check from Rossi Company for $50,000."
That would completely ruin everything!
"Sounds good," Old Rossi's eyes lit up, and he couldn't help but rub his hands together. "Won't it interfere with my restaurant's business?"
"You don't need to worry about the small restaurant business anymore. Now I can make a lot of money, enough to support the whole family. After this trading company is established, you will be a proper general manager, respectable, stable, and long-term. It's much better than struggling to make a living by running a small restaurant."
"As for the restaurant itself, you can continue to run it for fun if you want. We will set up another company to hold the assets, and many household expenses can be legally deducted by listing them under the company's business accounts, which will also reduce the amount of tax we pay."
Zik took out a pen and paper and casually listed the explanations:
"For example, flour, beef, olive oil, cleaning solution, ice, paper towels... these are supplies that are used at home and also used by the company to entertain clients. The categories are all the same. As long as the merchant issues an invoice to the company, the goods are delivered to the company, and the accounts are processed through the company's bank statements, this is a legal commercial consumption."
"In addition, as long as a reasonable business purpose can be found, the IRS will not question any of the company's compliant expenditures, which can help us reduce and avoid taxes to the greatest extent possible."
Mrs. Rossi sat to the side, listening in astonishment: "When did you learn all this?"
"That's how all the big companies in the entertainment industry operate," Qi Ke continued scribbling in his notebook, casually explaining, "The IRS is ruthless; they can't make any money without doing this."
As Zik wrote, he thought to himself that this wasn't just empty talk; it was indeed a routine practice he had been exposed to from a young age.
One day he saw Larry Harris filling out an expense report in his office—a party, $10,000 in expenses.
But Larry didn't actually do it. He said that Neil and Bruce Bird, the vice president of marketing, would help him gather the invoices of equal value, so he could get reimbursed by PolyGram. After receiving the money, he would give Bruce $10,000 to "handle business."
Zick didn't know which song they were using the money to promote, but ten thousand dollars was enough to bribe several mainstream radio stations.
Of course, neither of them ever helped Larry get an invoice.
Larry had to make up the party guest list himself: he wrote down every politician, deceased musician, war hero, Zeke and Marco, Neil and the entire Bruce family.
"If anyone checks, I'll just say everyone went and the party was awesome." Larry was overjoyed.
The couple looked at their son, who had the air of a seasoned businessman, and were completely unable to get a word in edgewise. They felt both gratified and bewildered.
After a moment of silence, the two got up to leave the room, no longer wanting to disturb his work planning.
Before leaving, old Rossi couldn't help but stop and solemnly give him some instructions:
"Son, when I was your age, your grandfather told me something. He said, 'If you plan to marry a girl, first look at her mother. If her mother is a shrew, then the girl you marry will eventually be a shrew too; if her mother is a good woman, then you have a guarantee.'"
Zik looked up, feeling both amused and exasperated: "Papa, you're thinking too far ahead. How old am I? How could I possibly be thinking about marriage so early? Besides, it's 1978 now... Grandpa's old ways are outdated."
"Your mother and I had Paul when we were that age," old Rossi insisted. "And when it comes to marriage, it's best to choose a decent Italian girl, someone you know well and whose habits match yours. If all else fails, a respectable and stable Jewish girl will do..."
"Alright, alright, I know, what are you talking about?" Qi Ke waved his hand with a helpless smile and quickly closed the door.
He calmed down and continued to organize the company structure, equity division, and business logic on paper and pen.
Not long after, the door was gently pushed open, and Judy walked in after taking a shower.
Her hair was still wet, her shoulders were damp, and her eyes and brows were gentle.
Zeke stretched, feeling quite tired after traveling across the east and west coasts and doing recording work.
"Did you grow up in this little room?" Judy gently lay down on the bed, turned to her side, and quietly looked at him.
"Disappointed?" Zeke lay down next to her and asked with a smile.
Not at all. Your family are all very kind people. No wonder you are so outstanding.
Looking at Judy's face so close to his, Zeke felt a little distracted again.
However, the old-fashioned wooden house had extremely poor sound insulation, and the parents' room was right next door, so any slight movement could be heard clearly.
Even though he was burning with desire, he could only honestly suppress all his distracting thoughts.
Judy quickly noticed Zeke's restraint and embarrassment, and she smiled slyly: "Then... this time it's my turn to serve you."
As soon as she finished speaking, she slid gently and slipped deep into the blankets.
"Oh, darling, you're so sweet." Zeke was very satisfied.
The next morning, as dawn broke, the two got up early, got ready, got into Tino's car, and headed straight to the Electric Lady Recording Studio in Greenwich Village to continue the remaining recording work on "Sweet Dreams".
Around 11 a.m., someone honked the horn outside the door. Tino went out and brought over a lean, middle-aged man in a wrinkled suit. He was carrying a briefcase and his business card read "M. Bernbaum Associates - Company Registration, Tax Affairs, Asset Structure".
The address, printed in small print, is on Broadway near West 27th Street, in what is New York's fashion district.
This person was introduced to Zeke by Alan Grubman, but Grubman was very clear on the phone: "Manny does filings quickly and keeps his mouth shut. You talk to him, but don't put my name in any documents." Then he added a half-joking warning, "I don't want to know the details either."
After both parties took their seats, they went straight to the point without any further pleasantries.
"I need your help registering two companies this time..."
The first one is the main trading company, which Zik plans to call Rossi Brothers Trading Company.
He felt the name was classic enough. Although his older brother Paul had passed away long ago and his younger brother Joey was still young, adding the "Bros" suffix instantly elevated the company's scale and aura, making it resemble a long-established company like Warner Bros. It had a reliable and established feel, and its credibility was greater in external collaborations.
The second company is an asset holding company, which Zeke named Fortuna Properties. Fortuna is the Roman goddess of fortune, implying good luck with money, and it sounds like a legitimate rental business.
He plans to put the family restaurant and any properties he buys in the future under this company's name.
This was also the advice Allen gave him: even if the trading company or the shell company related to the factory were to face a debt crisis or litigation in the future, creditors would usually only be able to pursue the assets of the trading company and the shell company, and would not be able to penetrate into the family homes and restaurant properties under Fortuna Properties, so he and his family would not end up on the streets.
After carefully taking notes, Bernbaum smoothly continued, "I understand. Rossi Brothers Trading is responsible for front-end order taking, operations, and business coordination, while Fortuna Properties is responsible for holding fixed assets and asset segregation. As for the third company..."
"That is, the shell company that is responsible for connecting with the contract manufacturers, holding inventory, and assuming responsibility. I will arrange for a registered agent to handle the setup and bank loan matters."
After saying this, Bernbaum solemnly instructed:
"I must emphasize to you that before this shell company is officially established and put into operation, you and Mr. Rossi must absolutely not appear on its bank signature cards, legal person register, or shareholder list."
"This is a standard non-recourse entity, legally bearing all risks independently. In the event of any issues such as labor disputes, factory accidents, or breaches of contract, the shell company is solely responsible, and has no legal connection whatsoever with your two main companies or individuals."
"Also, never let these companies open checks against each other, never use the same pen to sign, and never wander around those companies aimlessly."
"If there's anything, let him contact me. As long as the signatory isn't from that company, the legal firewall remains in place."
This isn't some outrageous criminal conspiracy; it's just a common liability firewall tactic in the 70s New York apparel and related manufacturing ecosystem. It's technically legal, but its purpose is to evade responsibility, and the whole thing is at best on the gray area.
In fact, the vast majority of products produced in these shady sweatshops end up in legitimate shopping malls. There's an entire floor dedicated to this kind of ecosystem in the clothing section. Many of the small law firms that accept cash and process "confidential registrations" without asking why operate in the Broadway and 27th Street area are active in this area.
After exchanging a glance, Zik and Tino nodded slightly: "No problem. We'll only handle the Rossi Brothers' trading business and won't touch any risky aspects."