2 County Men Indicted in Mining Scam

Two Orange County men were indicted by a federal grand jury here on charges that they ran a gold mine scam that bilked U.S. investors of more than $1 million.

In indictments unsealed Thursday, five other people were also named as being salesmen for four companies who are accused of selling worthless shares of a gold mine supposedly situated near the California-Nevada border, FBI spokesman Tom Nicodemus said.

“It didn’t exist, the whole thing was a scam,” Nicodemus said.

Charged with 26 counts of interstate transportation of money taken by fraud were the two alleged principals in the scheme, Genoveva Marks, 47, of La Habra and Lynn William Johnson, 48, of Mission Viejo.

Huge Profits

Nicodemus said agents were looking for Marks and Johnson, along with the five others named in the indictment as salesmen for the companies.

According to the indictment, the defendants sold shares of four companies, telling investors the companies owned operating gold mines on the verge of making huge profits. The companies were Newport Research and Development, Southwest Development, First Capital Resources and WesPac Minerals.

Nicodemus said salesmen sold the shares by phone or with mail brochures, and the victims sent money to mailboxes in the Las Vegas area.

“They would send them pieces of paper saying they had shares in the company, but that was all,” he said.

Nicodemus said victims invested $1,000 to more than $50,000 apiece.

“They had nice brochures and spent a few dollars on the ads,” he said. “They made it look very legitimate.”

Nicodemus said agents were tipped off about a year ago and that similar schemes are also under investigation.