San Diego — Those who trusted funds to the late financial adviser William Zures -- including his Rancho Santa Fe parish and some among its members -- may get a portion of their money back, but many snarls remain to be unraveled.

As reported by this column June 24, Zures committed suicide by carbon monoxide poisoning May 25 on the beach in Carlsbad, according to the county medical examiner. (Mainstream media stated he died of a heart attack.) Rumor had it that the Church of the Nativity, a Roman Catholic parish, and its members had invested with Zures. On June 24, the Reader confirmed that some $700,000 from the parish or its members went into one of Zures's projects, Horizon Strategies.

I have interviewed people investigating the matter on behalf of the Zures family, investors, attorneys, and officials of companies that Zures put his investors' money in. (The district attorney's economic crimes unit is looking into the matter, but it is not yet a formal investigation.) The Reader can now confirm that the Church of the Nativity and members did toss money into the Zures pot. "The preliminary audit revealed that the parish invested $600,000 to $700,000" in Horizon Strategies, a real estate partnership, according to Sanford Goodkin, the chairman, who was not an investor and not involved in day-to-day management.

A source close to the investigation for the Zures family confirms that the parish also placed money in Zures's largest project, 21st Century Oil, a string of gasoline stations that, at least for now, has been kept out of bankruptcy. Also, a school connected to the parish invested with Zures, says the source close to the investigators.

"I do know that some members of his [Zures's] parish are investors, but it's not a huge number of people," says management consultant and bankruptcy trustee Richard Kipperman, who has been bro ught in to help 21st Century Oil.

"It wouldn't be appropriate for me to make any public comment. That is privileged information," says Msgr. Dennis Clark, pastor of the Church of the Nativity.

Zures has his defenders. "He may have made some bad business decisions," says John W. Howard, an attorney who has been hired by the Zures family. "But did he steal any money? Absolutely not." Howard made only one other comment for the record, although I will quote from two of his letters and one of his e-mails to an investor.

"I knew Bill for 15 years," says Kenneth Weiss, his accountant. "I did not think he was running a Ponzi scheme [an illegal arrangement by which early investors are paid off with funds from later investors]. Some deals worked; some didn't. I assume the investments stopped making money the way they used to, or there was a string of bad investments."

Others believe Zures may have spread his holdings too thin. For example, he put his people's money into venture capital deals (seed money for emerging companies), as well as into real estate projects. Not many people have expertise in both fields, says Goodkin. He also doubts Zures was running a Ponzi scheme but says, "I wanted to get out five or six weeks before he died. I was uncomfortable that his skills were more in the field of salesmanship than management."

Zures was "having a terrible time raising money for Horizon," says Goodkin, who lined up an investor who expressed an interest in plunking down $25 million. However, Zures's suicide may end that, and Goodkin doesn't know what will happen to Horizon.

"Zures came to me, highly recommended by his own pastor," says an elderly investor. "People seemed to love him. He had that all-American, much-admired, can-do, frat-boy manner about him. He lived the good life and liked to show it." (Zures lived with his family in the upscale golf community of Santaluz, abutting Rancho Santa Fe. He was an enthusiastic golfer and motorcyclist and served on the board of trustees of the University of San Diego.)

Most disturbingly, says this investor, who was not wealthy, "He always convinced me that putting my earnings in the bank was foolishness at that low rate of interest. He almost always had me reinvest in another of his projects. If things were going badly, he certainly never told me." This investor did not get any return for two years and couldn't decipher the monthly statements. "If I even questioned how things were going, I got only a slightly irritable response."

"It seems circular," says Lois Kelly, head of litigation for Elder Law and Advocacy, working on behalf of an older investor. "Money went back into another of his companies instead of going back to the people."

Goodkin, for example, believes that money from 21st Century Oil was steered to Horizon Strategies. In an e-mail, Howard told one investor that money from a successful real estate deal, Summit Crest, "was reinvested in 21st Century Oil. 21st Century Oil will be able to return that money to Summit Crest investors as it begins to generate a profit in the coming months and years." But since investors had enlisted Kipperman to keep 21st Century Oil out of bankruptcy, it's no sure thing that it will be generating fat returns anytime soon, despite Kipperman's excellent reputation. Howard has expressed great confidence in William Rathbone, the attorney who recruited Kipperman, and others who are trying to make 21st Century profitable.

Continues Kelly, "My biggest concern is that everything was put in the pot, and only Cures knew how it was split [among investors]." Clearly, he was taking money from one project and putting it in another. Kelly is worried that if there are any recoverable funds, they will go to other creditors rather than to investors.

Over several years, Zures probably invested $50 million for his clients. At the end, perhaps some $10 million remained in the pot, three-fourths of which was invested in the ailing 21st Century Oil.

"It appears that 21st Century will be saved and profitable," Howard told one investor in a late-July letter.

"Some of the stations are not doing well," says Kipperman. Zures was apparently using funds from stronger stations to fund the less strong. "I haven't seen anything that tells me horrible things were happening. Thus far it is not in bankruptcy."

But misinformation has gone to investors, perhaps inadvertently. Through a limited liability company, Zures's clients owned 23 percent of the stock of Moorpark-based Fluid Ink Technology. Zures sat on the company's board. Howard told an investor that the stock in the privately held company had been turned into debt, paying an annual interest of 8 percent. The company is profitable, Howard assured the investor.

Wrong on both counts, says Ken Frisbie, Fluid Ink's chief executive. "There is no right to convert equity to debt," says Frisbie. "There is no debt owed by Fluid Ink Technology" to Zures's investors. Moreover, "The company is not doing well. It lost a considerable sum of money last year," and its stock has lost value.

Howard says for the record that the equity/debt conversion had been discussed last year but not consummated. He had misunderstood and apologized for the mistake.

Two software investments remain a puzzle. Zures had a substantial investment in a high-tech Massachusetts company named Acrylis and also sat on its board. In 2000, Acrylis announced an innovative software technology, WhatifLinux. The next year, it sold the technology to Caldera International of Orem, Utah. Only a year later, Caldera closed down the Massachusetts operation that housed Acrylis. Caldera changed its name to SCO Group and has tried to protect its intellectual property by suing some heavyweights, including International Business Machines, AutoZone, Novell, and DaimlerChrysler. But SCO's 2003 fiscal year was its first profitable one, and losses are piling up again. Its cumulative loss is $216.6 million. The question is whether the payment Acrylis got for the technology will be helpful to investors.