U. S. District Judge Earl B. Gilliam on Wednesday denied another motion for a mistrial made by Nancy Hoover Hunter's lawyers, who complained that they had just received 197 pages of documents that prosecutors should have turned over to them by last March 15.
Gilliam resumed Hunter's fraud trial Wednesday after recessing it for a day Tuesday to deal with a continuing dispute between the prosecution and defense over the document issue. Prosecutors said they have now given Hunter's lawyers all notes and memoranda regarding investigators' interviews with both scheduled and potential witnesses at the trial. By law, defense attorneys are entitled to notes pertaining to actual witnesses.
Hunter is charged with 234 counts of fraud, income-tax invasion and conspiracy stemming from her role as a top executive at the once-glamorous La Jolla investment firm of J. David & Co. The firm was headed by J. David (Jerry) Dominelli, who is serving a 20-year prison sentence for his part in a huge Ponzi scheme, in which investors were bilked out of more than $80 million. Hunter, the former mayor of Del Mar, was Dominelli's live-in companion during the firm's heyday.
Her trial resumed with the introduction of a key prosecution document--a note Hunter allegedly wrote to Dominelli, apparently warning him not to use an accounting practice that could result in their activities being tracked.
The handwritten note, which was displayed on a screen for the jury, reads: "I'm not eager for J.D. Securities to clear your Interbank trades. They will then be able to construct their own version of your track record. It could be bad."
The note apparently refers to J. David Securities, a J. David & Co. entity headed by Hunter.
Keeping J. David & Co.'s dismal investment track records from public scrutiny as well as the scrutiny of the firm's employees was a key to the firm's continued ability to lure investors. The prosecutors, S. Gay Hugo and Stephen P. Clark, have alleged that Hunter was aware of the fraud, was integrally involved in it and helped to create the false track records that duped investors and were kept from lower-level employees.
Hunter's lawyers hope to lay the blame solely on Dominelli and convince the jury that she, like other employees, was unaware of his illegal activities.
The handwritten note was identified Wednesday by Jane Sinclair, a prosecution witness who worked for J. David Securities from 1980 until the time of its collapse in 1984. Sinclair said she recognized the handwriting as Hunter's.
Sinclair, who did bookkeeping for J. David Securities and was on its board of directors, also testified that, despite the fact that her job was to prepare the monthly investor account statements, she encountered Hunter one day photocopying a half-inch stack of statements for accounts she (Sinclair) had never heard of.
Sinclair said the account statements showed returns for investors that were "far more favorable" than the ones she handled. She said she questioned Hunter about it and Hunter responded that the investors got better returns because it was a separate, bigger pool with lower fees.
On cross-examination by defense attorney Robert S. Brewer, Sinclair said that, during the entire time she worked for J. David Securities, she thought that both Dominelli and Hunter were "honorable" people.
The trial resumes today with further cross-examination of Sinclair.