Then he started getting into real trouble. As an Indian agent in Illinois, he was blamed for tipping off the Sioux that rival tribes were plotting against them. The Sioux set an ambush, the other tribes retaliated against white settlers as well as the Sioux, and the Blackhawk War was on. Later, Marsh was indicted for selling weapons to the Indians, and he fled to New Mexico and then California in 1836.

In Los Angeles, Marsh passed himself off as a doctor by displaying his Harvard diploma, which was in Latin and couldn't be deciphered by local authorities. Charging exorbitant prices for his medical services, he made money, although he ended up in jail briefly for plotting against the Mexican government. He moved north and bought a large ranch between Mount Diablo and the San Joaquin River in Northern California.

As one of the earliest American settlers, Marsh's letters to Eastern newspapers encouraged pre-Gold Rush immigration. When gold was discovered, Marsh staked a claim near Marysville at what became famed as Park's Bar. The "doctor" dug more than $40,000 in gold from the site, and later made even more selling goods from his ranch to other miners or trading trinkets to the Indians for gold. In one case, he traded the red shirt off his back for $300 in gold dust and nuggets.

By 1855, Marsh was doing very well. He reportedly had buried a vast treasure somewhere on his ranch, and had plans to build the biggest, most elaborate house in Northern California.

But he was a notorious tightwad, which proved to be a fatal character defect. After a dispute with a Mexican cowboy about a fee for breaking horses, Marsh was ambushed by the cowboy and two companions near Martinez, and was stabbed to death.

His buried treasure was never found.