O.C. Man Accused of Bilking Elderly Out of $10 Million

A Laguna Niguel man has been arrested on charges of defrauding elderly Orange County residents out of more than $10 million and is due to be arraigned Monday in U.S. District Court in Santa Ana.

Lance Van Alstyne, 31, is accused of running what federal prosecutors call a “classic Ponzi scheme” from April 1992 through December 1994 that involved promising certain rates of income to investors in “relatively worthless” oil and gas partnerships.

The investors were sold the partnership interests through brokers. Payments made to investors actually came from their own capital, or from money raised from other investors, prosecutors said.

Van Alstyne spent most of the money either on himself or to perpetuate the scheme, according to an indictment handed down Sept. 30 by a federal grand jury.

He is charged with 19 counts of mail fraud, which carry a collective maximum penalty of 95 years in prison. He also faces 20 years in prison for each of three counts of money laundering, and 10 years each for three counts of using illegally obtained funds in financial transactions. He could also receive fines of up to $6.25 million.

Van Alstyne was earlier named as one of several defendants in a fraud lawsuit filed in Orange County Superior Court by oil-and-gas partnership investors.

In June, he also was barred by the National Assn. of Securities Dealers from associating with any of its members for managing the securities business of a member firm without the proper registration.