INSIDE EDITION Investigates a Financial Psychic

Would you take financial advice from a psychic? A man who called himself "America's prophet" said he could predict the marketplace…and many people believed him, but they lost millions of dollars. He denies any wrongdoing. INSIDE EDITION investigates.

Would you take financial advice from a psychic? People around the country have given Sean David Morton millions of dollars to invest. He says he can make you rich using his psychic powers.

Morton runs something called the "Prophecy Research Institute." He's a popular radio personality and is well-known at new-age seminars.

"Hey, invest your money with me. Give me money, I'll make you more," said Morton at one seminar.

His website shows him posing with well-known celebrities.

He's quite the name-dropper, saying in one video clip, "Buzz Aldren, Neil Armstrong, I have two godfathers that have walked on the moon."

He even claims his financial forecasts are endorsed by former treasury secretary Henry Paulson, saying, "I've known (him) for about twelve years."

"I was naive. I should have done my fact checking," says investor Carole Dunn.

Carole Dunn saw Morton speak at a new age conference in New York City. The 64 year-old invested most of her life savings, 20,000 dollars, with Morton. So why did she do it?

"He said he was a psychic. He said that when he got his predictions, he would call his trader," said Dunn.

Dunn says five months later, nearly all the money was gone.

"He said, 'Oh, you see what happens. You lose the money and you blame the broker.' He just laughed. He laughed in my face," said Dunn.

Law professor Elizabeth Goldman and her students at Cardoza Law School in New York City, now represent Dunn in a lawsuit against Morton.

"Given that he said he could read into the future, he should never have lost any money," said Goldman.

It appears that Morton's financial empire and that impressive sounding "Prophecy Research Institute" is actually being run out of a second floor apartment in Hermosa Beach, California. On the gate of Morton's "world headquarters" is a warning to authorities that it is foreign soil, A Consulate for the Republic of New Lemuria, an imaginary and mythical place somewhere in the middle of the Pacific Ocean.

We didn't want to risk a diplomatic incident, so Sr. Investigative Correspondent Matt Meagher caught up with Morton as he picked up his mail. You'd think someone with psychic skills would have known we'd track him down.

INSIDE EDITION's Meagher asked Morton, "Can you tell us where the six million dollars that investors gave to you went? Can you talk to us about your psychic powers?"

"I don't know what you're talking about," Morton responded as he got into his car.

"Are you a bad investor or just a lousy psychic? Or both?" asked Meagher.

Carol Dunn says it's unlikely she will ever see her life savings again.

"I just hope he is stopped from what he is doing, which is swindling innocent, naive people," said Dunn.

Morton has denied her allegations. The Securities and Exchange Commission recently filed a lawsuit against him for securities fraud, and said his psychic powers were "nothing more than a scam." Morton also denies those allegations.