A 59-year-old Anaheim woman admitted her part Wednesday in a securities fraud scheme that cost victims hundreds of thousands of dollars and was immediately sentenced to seven years behind bars.

Madelynn Renee Jones pleaded guilty to one count each of use of a device or scheme to defraud with a sentencing enhancement for property damage exceeding $200,000, acting as a broker-dealer without certification, and using untrue statements in the purchase or sale of a security.

Multiple other felony charges were dismissed as part of the plea deal, according to court records. She could have faced up to 31 years in prison if convicted at trial of all the charges filed against her last year.

Co-defendant Kevin David Grace, 51, pleaded guilty for his part in the fraud in October and was sentenced to two years behind bars.

Most of the allegations involved “cold calls” that were done to solicit investors for Neoteric Energy Inc., according to a motion to increase bail for Grace.

According to an affidavit filed with the bail-raising motion, Orange County district attorney investigator Ernest Hu said Grace was listed as president of the company and Jones as treasurer.

One of the fleeced Neoteric investors was an 86-year-old Minnesota resident who lost $50,000 and another was an 80-year-old Arizona resident who lost $25,000, Hu said.

Total Neoteric investor losses were $294,200, which included a $199,200 investment made by a woman in Ohio, according to Hu.

Neoteric was described to investors as an “oil and gas company” that was “developing and marketing game-changing” technological advances for clean energy, according to Hu, who alleged that most of the victims’ money went to the defendants’ personal expenses.

Grace was not instrumental in developing the technological breakthrough advertised to investors, Hu alleged. The founder and president of the company that developed it said Grace “initially helped him think up a broad concept for what would later become” the product, Hu said.

“Grace never had a role in developing or funding” the product, Hu alleged in the affidavit.

During the investigation, Hu “learned Grace has an extensive criminal history, including but not limited to misdemeanor convictions for drug charges (multiple), DUIs (multiple), hit-and-run, and domestic violence, and felony convictions for being an accessory to crime, grand theft, forgery and drug charges (multiple), including for which he is currently serving a three-year jail sentence,” according to the affidavit.

The criminal history was not divulged to investors as is required, Hu said.

Neoteric wasn’t the only scam Jones was involved in, according to Hu, who alleged that she also tricked investors into sinking cash into other companies.

The 86-year-old investor from Minnesota lost a total of $235,000 in three other investments outside of Neoteric for which he was allegedly solicited by Jones, according to Hu, who said Jones was accused of bilking investors out of at least $554,200.

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