Orange County Man Arrested for Defrauding Elderly Couple Out of Millions of Dollars by Promising to Extract Gold from Old Mines
|FBI Los Angeles November 23, 2009|
An Orange County man who victimized an elderly couple in an investment scheme was arrested at a La Habra residence Thursday by FBI agents and is scheduled to be arraigned this morning in U.S. District Court, announced George Cardona, Acting United States Attorney in Los Angeles, and Keith Bolcar, Acting Assistant Director in Charge of the FBI’s Los Angeles Field Office.
John Arthur Walthall, 54, formerly of Laguna Beach, was indicted by a federal grand jury in October for multiple counts of wire fraud, money laundering, and other violations, relative to defrauding an elderly couple, identified in the indictment only by their initials, of nearly $5 million.
According to the indictment, Walthall convinced the victims to invest in a partnership called “Advanced Recycling General Partners,” for the purported purpose of searching for and extracting gold from old mines he said were located in the Imperial Valley, Nevada and Brazil. Walthall told the couple that he had invested more than $3 million of his own money in more than a decade worth of research in the gold extraction process. The couple was told that, as partners, they would receive a salary, and that expenses would have to be approved beforehand by each of the partners.
The large majority of the couple’s money was not used for its intended purpose, but was used by Waltham for his own gold investments and personal expenses, including making alimony and child support payments for his four children; paying rent and other living expenses, and purchasing multiple vehicles and luxury items; among them a $10,000 payment to a film school, and a hyperbaric oxygen chamber worth approximately $60,000.
When agents arrested Walthall last week, they conducted a consensual search of the residence and found approximately $500,000 in gold coins under his bed. Agents also seized three vehicles Walthall had purchased with investor money, to include two Ford Excursions and a Ford 450 pick-up truck.
Walthall was afforded an initial appearance before a federal magistrate on Friday and was detained; he is due back in court to be arraigned this morning.
This case was investigated by agents with the Federal Bureau of Investigation and will be prosecuted by the United States Attorney's Office.