$5M million goldmine fraud scheme alleged

LOS ANGELES, Nov. 23 (UPI) -- A California man has been charged with cheating an elderly couple out of almost $5 million in an allegedly fraudulent goldmine scheme, prosecutors said.

John Arthur Walthall, 54, of Laguna Beach was indicted in October on nine counts, including wire fraud and money laundering, federal prosecutors said Monday.

He is accused of persuading the alleged victims, both in their 80s, to invest more than $4.7 million in an enterprise to extract gold from old mines in Southern California, Nevada and Brazil, the Los Angeles Times reported.

Prosecutors allege Walthall told the couple he had personally invested more than $3 million into research into a process for extracting gold, and assured them they would receive a salary if they invested in Advanced Recycling General Partners.

Walthall put the invested funds to personal use for such things as alimony, child support and an online dating service, prosecutors said. He also allegedly used the money to send his son to film school and to acquire a hyperbaric oxygen chamber.

FBI agents said they found $500,000 in gold coins under Walthall's bed when they arrested him last week, the newspaper reported. Agents said they also seized three vehicles Walthall purchased with his alleged victims' money.