“Don’t you see?” he said. “The Blue Sky Act prevents a corporation from issuing its capital stock until it has permission from the Commissioner of Corporations. After stock has once been issued, it becomes private property the same as anything else a man owns.”
“Well?” I asked.
He said, “And the state taxes corporations. Whenever they don’t pay their taxes, their franchise is forfeited to the state, and they can’t do business any more, but those corporations can be revived if they pay their back taxes and penalties.”
“Pretty slick,” I said.
He grinned — an oily, foxy grin. “You see,” he said, “those corporations are just the dead shells of former businesses. We pay the licence, taxes, and revive the corporation. We buy up the outstanding stock which has been issued... Never have to pay more than half a cent or a cent a share... Of course, there are only a few corporations which answer our purpose. I’ve made all the preliminary investigation. I know the corporations. No one else does.”
“Then why do you say in your letter that I’ll have to give you the name of the corporation?”
“To keep my hands clean,” he said. “You’ll write me a letter giving me the name of the corporation. I’ll simply act as your attorney, following your instructions... Understand, Mr. Lam, I’m going to keep in the clear — at all times.”
“When do you give me the name of the corporation?”
“When you have paid me one thousand dollars.”
“Your letter says fifty.”