Regulators Raid 2 Firms Selling Gas, Oil Stakes

State regulators raided two companies here this week, seizing their records in connection with allegations that the companies cheated hundreds of investors nationwide out of $15 million by selling stakes in defunct or nonexistent oil and gas wells.

Officials said executives of National Capital Securities Corp. and Liberty National Corp. are suspected of running a Ponzi scheme, by which earlier investors are paid with money collected from later investors.

Investors contacted by the companies, which operated out of the same office here, allegedly were told that they would reap large profits from oil and gas wells that the two companies said they were running in Kentucky, officials said.

“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 southern division of the California Department of Corporations. “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 are claiming that the companies swindled them.

Arrest warrants were issued for two company officials who were not publicly identified.

Donna Lacey, 44, of Mission Viejo was arrested on suspicion of selling unregistered securities, carrying out securities fraud and violating an earlier cease-and-desist order issued in Kansas. Lacey was an 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 regulators closed in 1985.