Ex-O.C. Man Pleads Guilty to Telemarketing Fraud

A former federal prosecutor who became a commodity trading regulator and a former Laguna Beach resident were among eight people who pleaded guilty this week to telemarketing schemes that investigators say cheated investors out of an estimated $200 million.

John A. Field III, 60, a former U.S. attorney and top cop at the Commodity Futures Trading Commission, on Wednesday pleaded guilty to defrauding consumers.

Also snared in the government crackdown was Marcus K. Dalton, whom prosecutors tagged one of the country’s most prolific securities fraud artists. Dalton was listed from Colts Neck, N.J., and Laguna Beach. Authorities said he owns a home in Laguna Beach but no longer lives there.

The pleas culminated a government campaign to shut down so-called “boiler room” fraud. In the schemes that Field orchestrated, prosecutors said, consumers were offered nearly worthless stakes in investments including wireless cable systems and nonviolent television programming.

“Most of the money was skimmed off the top by the boiler-room operators, who promptly went on to the next scheme,” said U.S. Atty. Faith S. Hochberg in New Jersey.

Prosecutors said both Field and Dalton had assisted authorities in a nationwide undercover sting operation to snare other boiler-room operators.

The investigation led to raids Tuesday at telemarketing boiler rooms in six states, including California, authorities said. There were seven raids in Southern California, including one in Irvine.

The offices were set up as part of an undercover operation when Dalton and others, cooperating with authorities, convinced telemarketers they knew to sell investments in a fictitious currency fund created by the FBI and U.S. Postal Inspection Service.

Investigators used retired FBI agents and postal inspectors, as well as volunteers from the American Assn. of Retired Persons, to pose as willing investors, and their names and phone numbers were given to the boiler-room operators.

The telemarketers sold units of the imaginary “United Currency Exchange Ltd.” of London from Dec. 2 until Tuesday’s raids, authorities said.

Field, director of enforcement for the U.S. Commodity Futures Trading Commission in Chicago from 1977-80, admitted advising telemarketers in the 1990s on ways to structure their offerings to avoid scrutiny from federal regulators.

Prosecutors disclosed Wednesday that Field pleaded guilty two weeks ago to racketeering and money laundering charges in New Hampshire and that Dalton pleaded guilty late Tuesday in Newark to federal racketeering charges. Four others pleaded guilty Wednesday in Newark.

Dalton admitted helping to sell or promote at least $80 million in bogus securities, including phony wireless cable operations, bridge loans to finance a wireless venture in American Samoa, and fraudulent shares in Treasure Chest television, a children’s programming investment.

Dalton, 45, was described in a 1995 Forbes magazine article as a “true pioneer” in wireless and FCC license scams.

The article led authorities to begin investigating Dalton and ensnare his associates, a ranking FBI agent said Wednesday.