Man With Laguna Beach Ties Sentenced for Defrauding Elderly Couple

A 56-year-old former Laguna Beach man was sentenced on Monday to 14 years in federal prison for defrauding an elderly couple out of $5.5 million in a gold investment scheme.

In a bizarre, lengthy sentencing, John Arthur Walthall argued with U.S. District Judge Andrew Guilford, tried to fire his attorney, and lashed out at the victims who he claimed defrauded him.

Guilford admonished Walthall for repeatedly interrupting him, warned him that he would be removed from the court if he couldn't be quiet, and even said Walthall had lied about his health in an attempt to delay his trial.

Guilford refused to let Walthall delay the sentencing so he could get a new attorney. Guilford ladled praise on Walthall's attorney, James Riddet, for his "aggressive" defense of his client.

But Walthall—whose most recent residence had been in La Habra—claimed he was the victim.

"From day one, I've been caught up in an entrapment and fraud scheme," Walthall said.

Walthall wanted to read a 607-page statement he said he had been working on for six months during today's sentencing. Guilford refused to let him, but accepted the voluminous document into the court record.

Guilford acknowledged Walthall had a history of health problems, even lapsing into a coma at one point, but in the weeks leading up to the trial Guilford said he finally accepted what prosecutors were telling him that Walthall was faking his illnesses.

Guilford was convinced by secret video footage that authorities obtained of Walthall carrying around his wheelchair without any problem.

"You were lying to me," Guilford angrily said to Walthall. "And I do not appreciate it ... I'm tired of you lying to this court."

As Walthall continued to protest, the defendant's son, Christopher, stood up and told his father, "You have to stop."

Walthall claimed the victims set him up to steal his "intellectual property."

Walthall even claimed that his girlfriend's father, who put up his house so Walthall could make bail, stole gold from the defendant. After Walthall was released, he jumped bail and fled to Nevada, where he was later recaptured and then put on trial.

Walthall was convicted Dec. 2 of four counts of wire fraud and a count of failure to appear.

Walthall was arrested in 2009 and indicted for defrauding the Laguna Niguel couple, who were in their 80s. Walthall used the money to buy investments and cover personal expenses.

When he was confronted by the couple with the fraud, Walthall gave them back $1.3 million, and later agreed to pay them another $760,000 in a settlement of a civil lawsuit, Assistant U.S. Attorney Mark Takla said.

Guilford today ordered Walthall to pay $2.4 million in restitution to the couple, but he has little ability to meet the commitment, Takla said.

Walthall accused the prosecutors and the FBI of "railroading" him.

"This is wrong. How can you do this?" Walthall said. "How can you live with yourselves?"

Guilford told Walthall that he hopes he can one day stop blaming the victims and understand that, instead, they all had supported and loved him.

"Mr. Walthall, as I look at your life, I see it strewn with people who loved you and were hurt for it," Guilford said.

Walthall told Guilford he wanted to appeal his conviction. Riddet said he would help him file the paperwork, and Guilford allowed him to then quit the case.

—City News Service