Hundreds Feared Cheated on Non-Existent Oil Wells

State regulators raided two Orange County companies this week, seizing records that allegedly show they cheated hundreds of investors nationwide out of $15 million by selling stakes in defunct or non-existent oil and gas wells.

Executives at National Capital Securities Corp. and Liberty National Corp. were allegedly running a so-called Ponzi scheme, which pays original investors with money collected from new customers.

Investors contacted by Liberty and National--which operated out of the same office in Santa Ana--were allegedly told they would reap large profits from oil and gas wells that the two companies were supposedly running in Kentucky.

“Money was being paid to investors that was supposedly coming from the sale of their oil and gas. There was no oil and gas in some of (the wells),” said Wes Fisk, chief investigator for the California Department of Corporation’s southern division. “The company was being kept afloat by monies coming in from new investors.”

Kansas officials also participated in the raid because some residents of that state claimed they were swindled by the companies.

Arrest warrants were issued for two company officials who were not publicly identified. A Mission Viejo employee, Donna Lacey, 44, was arrested on charges that she had sold unregistered securities, carried out securities fraud and violated an earlier cease and desist order issued in Kansas. She is assistant to John C. Rockett, who officials said managed both companies.

Rockett, 50, of Huntington Harbour, could not be reached for comment. Before starting Liberty, Rockett was chief sales manager at Citizens Oil & Gas Co., a Newport Beach firm that was closed in 1985 by regulators.

A receptionist for the companies said no one was available to talk about the allegations.