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.

• No one knew how many subscribers the company had.

• Mayberry USA was not collecting money it was owed by Internet networking companies that were delivering Mayberry to subscribers.

Scheldt says Mayberry USA is owed $1.28 million by Internet network companies, including COVAD and WorldCom, both now bankrupt.

Not surprisingly, the company's financial records were also a shambles.

Scheldt hired an accountant who spent months digging through the debris, matching up receipts.

"If it looked like there was stealing by employees, it would have shown up," Scheldt says. "It didn't."

Scheldt says there were questions by Mayberry USA investors, however, over how the money was spent -- particularly on expensive and extensive first-class travel by Wilson and Martin.

"Every receipt, everything was in place," Scheldt says. "Whether I agreed with how it was spent is irrelevant."

Scheldt declined to provide details on the couple's travel expenses. Mayberry USA's business records, he says, are in a storage locker that he can no longer access because Mayberry has not paid the storage bill. Scheldt says he's not even sure if the records still exist.

But associates familiar with Wilson and Martin say the couple traveled frequently on the spur of the moment. They ate at expensive restaurants and stayed in the best hotels, all on the Mayberry USA tab.

Through a confusing maze of bankruptcies and cybersquatting, Mayberry USA became part of 711.net, a North Carolina Internet company, which, like COVAD and WorldCom, went bankrupt.

Mayberry USA may soon end up back where it started -- in Rochester, New York.

An investment team called Eclipse Holdings led by Mayberry stockholder Dennis Ruggeri is attempting to buy the company and try to once again market it as a filtered Internet service provider. Ruggeri says he hopes to make an offer for the company by September 1.

Scheldt says Ruggeri's offer may be the best hope that Mayberry USA shareholders will recoup at least some of their investment.

But not if shareholders find out Ruggeri has a connection to Wilson.

"If Candy's name shows up . . . the shareholders would go ballistic and never approve a purchase," Scheldt says.

Ruggeri, according to Wilson's sworn deposition, was a shareholder as recently as last February in Arizona Capital.

When first asked about it, Ruggeri denied having any financial stake in Arizona Capital.

"I don't know where you're getting your information from," he says. "I would think I would know if I did."

But moments later, Ruggeri acknowledged he did have a small stake in Arizona Capital, but that it was liquidated sometime in 2000.

"It was a loan agreement and it was taken care of," Ruggeri says.

At the same time Mayberry USA hangs on to life by a thread, one of its biggest investors has started a rival firm, called Mayberry America, that provides the same service.

Gene Tyrrel put together an investment group that purchased $700,000 in Mayberry USA stock. Tyrrel says he got fed up and started Mayberry America.

"I was an investor who was pissed off at their (Wilson's and Martin's) lack of management skills and ability," Tyrrel says.

Tyrrel says he's tried for years to get a detailed accounting for Mayberry USA to find out what happened to shareholders' money, to no avail.

"If you can uncover that," he says, "you have uncovered the mystery of the century."


Candy Wilson's days of running Arizona Capital will very likely soon come to an end.

Pending regulatory approval, Wilson intends to sell Arizona Capital to CGS Blackwater LLC and become a part-time employee as an investment banker.

CGS Blackwater co-owner Norman E. Clarke declined to provide details of the purchase of Arizona Capital.

But records obtained by New Timesshow the company was sold for a song.

According to an August 2 letter Wilson sent to shareholders, CGS Blackwater paid $50,000 to assume Arizona Capital's assets. The money is equal to the amount of capital reserves Arizona Capital must maintain; Wilson essentially gave the company away.

CGS will also assume several contingent liabilities, including the Simmons & Bishop lawsuit, and three pending NASD arbitration cases.

Clarke says he expects to quickly settle the cases.

Wilson's letter states the new owners will be "making distributions" to Arizona Capital's creditors and debtors. The payments will likely be in securities held by Arizona Capital's parent company, Arizona Capital Holdings -- which is controlled by Wilson.

If those securities include Mayberry USA stock, the payments might not be worth much.

What about the original investors in Arizona Capital? What about Angela Cesal?

"I don't know who that is," Clarke says.

When told she was an original investor in Arizona Capital, Clarke quickly dismissed her role.

"In business you can't make friends with everybody," he says. "It's not a democracy. It is a zero sum game. Sometimes people lose and sometimes people win."

Cesal knows the final score in her long and tortured relationship with Wilson, the hooker turned CEO.

"All my investment went down the toilet," she says.

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1 comments
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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