continued "Since our inception in 1994, we have focused our efforts in the United States (specifically California and New Mexico), Mexico, and Central America," according to the website. "The Angelica Foundation continues to support grassroots human rights groups in Mexico and aggressive environmental organizations in the U.S., as well as innovative attempts to shift the counterproductive war on drugs."
Based on its "mission statement," the foundation is no fan of the Bush administration's war against illegal drugs. "Angelica continues its support for the Drug Policy Alliance, the leading organization working to overcome the drug war and promote new drug policies based on science, compassion, health, and human rights."
Records show that the Angelica Foundation and the M.B. Dalitz Foundation have done business with each other; in 1994 Angelica bought real estate on Pacific Center Boulevard in San Diego from the M.B. Dalitz Foundation. The transaction was listed as "intra-family," indicating no transfer tax was paid. Angelica's money was invested in a variety of equities, particularly high-flying techs that ultimately crashed. One investment, according to records on file with the Internal Revenue Service, was a semiconductor outfit called MeltroniX. A member of the board and compensation committee was James T. Waring.
Waring invested in the firm in 1999, and others he knew later joined him. But despite the infusion of capital, the company found it hard to make money, even after it recruited a hotshot chief executive officer, Andrew Wrobel, who had a master's degree from the Massachusetts Institute of Technology.
On March 15, 2000, just as the 1990s tech bubble was about to burst, MeltroniX gave a presentation before San Diego's prestigious MIT Enterprise Forum, made up of many Massachusetts Institute of Technology grads and other local techies. Andrew Wrobel "has taken the company from a one- or two-customer, project-oriented firm mired in debt to a multi-customer, healthy company," boasted the advance description of the event.
Bud Leedom of California Stock Report was on the panel that interviewed Wrobel that evening. "Wrobel was trying to make it a horse race," he says. "He seemed sincere," and the company had impressive manufacturing assets.
Then tech went to hell. Quickly. Waring had 2 million shares of MeltroniX stock -- 4.2 percent of the total. As the company foundered in June 2000, Waring, through FI Financial, loaned it $250,000 at 9 percent interest. In early 2001, he loaned another $75,000, at 10 percent interest. Other firms extended loans.
The company evinced signs of panic. In April 2001, it sued anonymous persons who had posted negative messages on an Internet chat site. This is usually a sign of desperation. Investors are entitled to post negative stock opinions on websites.
Through 2001 and 2002, MeltroniX continued to sink. For the three months ended June 30, 2002, sales plummeted by 88.6 percent to $84,000. But the cost of achieving those meager sales was $1.05 million. It's hardly surprising that in its last report as a public company, MeltroniX had a cumulative deficit of $64 million.
Red ink was flowing. Unpaid vendors were suing. The auditor questioned the company's viability. On October 4, 2002, the company announced that creditors had foreclosed and sold its equipment. The company had no money to satisfy its debts.
Here was the Lacrymosa from MeltroniX's Requiem: "Given the foreclosures, the company's inability to pay the underlying debt and other debts, and the inability to raise funding, MeltroniX regrets to inform employees, investors, and customers that the company is ceasing operations effective the close of business October 4 of 2002."
The final insult: MeltroniX said it did not have the funds to put out a press release explaining what happened.
Ross, Dixon and Bell was MeltroniX's law firm, and Fletcher W. Paddison was the lawyer on the account. "The company held on by its fingernails for a long time," says Paddison. "I lost money. Jim lost money. The law firm wrote off a lot of legal bills."
Wrobel, who had been ousted before the demise, sued Waring, his family trusts, and other MeltroniX executives. The most serious charge was that within days of MeltroniX's closing, Waring and the other executives took the assets, employees, managers, and customers and formed another company, named NxGen Electronics, that was in the same business in the same office space.
The suit was settled out of court, and Wrobel's lawyer, Michael B. Poynor, says he cannot discuss it. Wrobel is now chief financial officer of Carlsbad's NTN Buzztime and will not comment.
Wrobel's allegations against Waring and his fellow MeltroniX insiders were "totally off base," says Robert Czajkowski, who became chief executive of MeltroniX after Wrobel's ouster and is now president of the privately held NxGen. He won't discuss details of the suit, in which he was a codefendant. "It has been adjudicated," he says.
"When a company goes out of business, people feel they have gotten hurt," continues Czajkowski. "They are entitled to those opinions. The company was undercapitalized and caught up in the bubble. It couldn't dig itself out. It was hopeless; you couldn't raise capital in those days -- not a nickel."
As a requirement of taking his new city post, Waring filed a personal statement of economic interests. It indicates that he owns between $100,000 and $1 million in NxGen stock. Czajkowski won't discuss that, other than to say that Waring has never served on NxGen's board of directors.
The Angelica Foundation had only $30,200 invested in MeltroniX, according to its IRS filing. Aside from the MeltroniX disaster and tech stock losses, Angelica and Suzanne Gollin appear to have prospered in the years after her father's death.
Only a very few people knowledgeable about Waring and his relationship with Gollin and the Dalitz trust are willing to share their observations. One who will is Fletcher Paddison, Waring's onetime associate at Ross, Dixon and Bell.
"Moe died in 1989," says Paddison, who says he never knew the gangster. Initially, the trust was handled "by former professionals who had worked for Mr. Dalitz" in Las Vegas and Los Angeles. "The trust assets had been mismanaged. She had been struggling before [Waring's] involvement. Mr. Waring and our firm did our best, straightened out a large amount of the problem. Jim made good investments for Suzanne."