Hookin' for Dollars

From streetwalker to Wall Street, Candy Wilson has flown high and fallen hard. Now, her failing brokerage and anti-porn Internet company have left a trail of angry investors.

"He was using Wilson's company as a tool to operate," Cesal says.

Wilson quickly befriended Cesal with laughter and jokes -- just what the widow needed at the time. "Wilson was even willing to drive me to the airport and pick me up," Cesal recalls.

Before long, Wilson began to use the airport drives as opportunities to reel in cash.

Wilson intends to sell Arizona Capital to CGS Blackwater Corporation for $50,000.
Jackie Mercandetti
Wilson intends to sell Arizona Capital to CGS Blackwater Corporation for $50,000.
Two hats: Phil Nuciola sold stock in Mayberry USA as an Arizona Capital broker at the same time he was a vice president in charge of investor relations at Mayberry USA.
Jackie Mercandetti
Two hats: Phil Nuciola sold stock in Mayberry USA as an Arizona Capital broker at the same time he was a vice president in charge of investor relations at Mayberry USA.

"On the drive back from the airport, she would ask me to write a check," says Cesal.

Cesal opened her checkbook to help her newfound friend, who needed to raise money to open Arizona Capital. The money was needed to cover start-up costs and provide a $50,000 reserve required by federal regulations for brokerage firms.

By April 1997, Cesal had given Wilson at least $60,000 that was invested into Arizona Capital Holdings Incorporated -- a holding company that controlled all the stock of Arizona Capital Group. The investment gave Cesal a 7.5 percent stake in the brokerage.

Wilson obtained another $120,000 needed to form the company from Steve Madigan, who at the time was a Microsoft executive. Madigan was given a 15 percent stake.

Wilson also borrowed $25,000 from Gene Tyrrel, who would later become a major investor in Mayberry USA.

Wilson, who invested nothing, according to state records, controlled the rest of the stock. With the money in hand, Wilson was given federal and state clearance to open Arizona Capital Group.

Since then, Cesal says, her relationship with Wilson has been a financial and emotional nightmare.

Cesal says she purchased another $30,000 of stock in the company and then lent Wilson $50,000 to help Arizona Capital maintain its capital reserve requirements. When she tried to get Wilson to repay the loan, Cesal says Wilson refused.

"She was not about to pay me," Cesal claims.

Cesal says she eventually got the $50,000 loan repaid, but only after she hired an attorney.

Cesal alleges she was told little about the financial condition of Arizona Capital, even though she was a director of the holding company.

In January 1999, Cesal hired a consultant to review Arizona Capital operations. According to a report prepared by Larry Malanfant, Arizona Capital had numerous problems including:

• Salaries were more than three times what a comparable firm doing more volume in Chicago spends.

• Bills were not being paid on time.

• Wilson was uncooperative and absent from the business.

"The ship is running without a real captain," Malanfant's report states.

When Cesal tried to press for information, she claims, Arizona Capital flouted legal requirements by refusing to hold regular directors' meetings. "We had to insist on the meetings," she says.

Cesal says the situation deteriorated even more when Wilson got involved with Mayberry USA and moved to New Orleans, where Mayberry USA founder Richie Martin was living.

"She abandoned Arizona Capital and went to New Orleans to be with this guy and run this guy's company," Cesal says.

Her departure angered Cesal, but there was nothing she could do. Arizona Capital continued to struggle, she says.

As Cesal was pumping money into the company, losses mounted. Arizona Capital lost money four of the last five years, with losses totaling $339,751 as of December 31, 2001.

Those losses were only recently publicly disclosed, despite a requirement to file annual audited financial statements with the state Corporation Commission's Security Division. Arizona Capital did not file its annual statements for 1999, 2000 and 2001 until August 7 of this year.

"They were out of compliance," says Corporation Commission spokeswoman Murphy.

The commission could have revoked Arizona Capital's license for failing to file the reports, Murphy says.

State records, however, indicate the commission did nothing.

There are no letters or records of communications between the commission and Arizona Capital demanding that the company submit its audited financial statements for the last three years.

Murphy says the commission did alert the company that it needed to file written statements, but just made no record of the notification.

The financial statements arrived at the commission one week after Arizona Capital announced its intention to be sold to CGS Blackwater. The pending sale must be approved by NASD and the commission.

The audited financial statements showed the company lost money each of the last three years. The financial records are important in determining whether Arizona Capital was maintaining its minimum capital reserve requirements.

The audited financial statements indicate that the company had the minimum capital reserve of $50,000 on December 31 of 1999, 2000 and 2001.

Cesal, however, alleges the company occasionally fell below minimum reserve and would turn to her for additional funds.

"I bailed them out several times," she claims.

Arizona Capital officials, including chief financial officer Bob Trask, did not return New Times calls.

Trask was fined $5,000 in 1998 for failing to maintain minimum capital requirements at a previous stock brokerage firm where he worked with Wilson -- W&B McKee Securities.

Cesal says she's still haunted by the experience with Arizona Capital.

"They were like barracudas," she says of Wilson and her associates. "They are out to eat people alive."

Cesal, who didn't know about Wilson's prostitution background until told about it by New Times, says she feels deceived.

"She made me feel like she's a good friend," Cesal says. "All she was interested in was the money."

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Jim Baker
Jim Baker

Interesting. I had Mayberry USA for a while and never had any trouble with it. I only left them because I wanted a lower cost ISP. I didn't even know they had gone under until now 9-28-09. Jim

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