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Hunter Guilty on Four Counts; Jailed as 'Risk'

December 12, 1989|ALAN ABRAHAMSON | TIMES STAFF WRITER

SAN DIEGO — A federal jury Monday found Nancy Hoover Hunter guilty of four counts of tax evasion, acquitted her of one other tax-related charge, and could not decide on the 192 counts of fraud and conspiracy that were at the heart of the eight-month trial.

Hunter's relatives hugged each other and said, "That's good, that's good," as the jury returned its verdict. And Hunter's defense attorney, while arguing immediately afterward that Hunter should remain free on bail pending sentencing, claimed that federal prosecutors had "lost this case."

Those feelings of joy and victory evaporated moments later, however, when U.S. District Judge Earl B. Gilliam, saying Hunter was a flight risk, ordered her to jail without bail pending an April 16 sentencing hearing.

Hunter, her eyes glazed and her steps wooden, was led away by federal marshals out a side door of the courtroom. After a moment, she returned, craning her neck to look at her family, including her husband, Kenneth Hunter of Santa Barbara, who had yelled across the room, "I love you, sweetie!"

Hunter, 51, a former Del Mar mayor who was accused of conspiring to bilk about 1,500 investors out of $80 million, stood still for a moment, then collapsed, apparently having fainted, onto the red-carpeted floor after the judge's order.

Gilliam started to leave the courtroom, and Hunter's niece Sandy Shroeder screamed, "Ruthless! He's ruthless!" and yelled at the judge, "How could you do this to her?"

Gilliam then ordered spectators and reporters from the courtroom, but, as various people went in or out of the room, Hunter could be seen on the floor for the next 20 minutes, sagging in the arms of her attorney, Robert Brewer, or her husband.

Hunter faces up to 20 years in federal prison, or five years apiece on each of the four counts of tax evasion, Assistant U.S. Atty. S. Gay Hugo told Gilliam. Hugo, the lead prosecutor in the case, also told the judge that prosecutors intended to refile the 192 counts against Hunter.

"I can't say anything," Hunter's mother, Virginia Holm, said outside the courtroom. "I just can't believe it."

The chaotic and emotional sequence of events that followed the jury's verdict, delivered on its 15th day of deliberations, capped a trial that began March 28. It is believed to be the longest-running criminal case in the history of the San Diego federal court.

The charges against Hunter stemmed from her role as a top executive in the La Jolla investment firm of J. David & Co. from 1979 to 1984, when its checks began to bounce and nervous investors forced the firm into bankruptcy.

In all, investors lost about $80 million in the J. David affair, a giant Ponzi scheme in which prosecutors alleged that Hunter played an active role.

Hunter's defense lawyers, Brewer and Los Angeles lawyer Richard Marmaro, said she fell in love with the founder of the firm, J. David (Jerry) Dominelli and that love blinded her to any of his illegal activities.

Dominelli pleaded guilty in 1985 to four counts of fraud and tax evasion in connection with the Ponzi scheme and is serving a 20-year sentence in federal prison.

In November, 1986, federal prosecutors indicted Hunter, charging her with 234 counts stemming from her involvement in the now-defunct J. David firm. The indictment followed Hunter's April, 1986, guilty plea to related state charges of conspiring to funnel thousands of dollars--allegedly J. David funds--to Roger Hedgecock's successful 1983 campaign to become San Diego mayor.

The funds were funneled to Hedgecock's campaign through the Tom Shepard & Associates consulting firm, Hunter admitted through her plea. She was sentenced to three years' probation, fined $10,000 and ordered to perform 350 hours of public service, which she did at the Santa Barbara Public Library.

Midway through the federal case against Hunter, Gilliam dismissed 37 of the counts, leaving 197.

Hunter took the stand for more than a week in late October, claiming she was innocent of the state conspiracy charges. She pleaded guilty, she said, only because she knew federal prosecutors were "thinking about this trial" and "I didn't know if I could go through two things."

Hunter's testimony capped the trial's most eventful week. That week, the financial editor of the San Diego Union, Don Bauder, clapped his hand to his forehead in a gesture of disbelief while Hunter was on the stand, prompting a break while Gilliam tried to figure out whether any harm had been done.

He eventually decided jurors had not been improperly influenced by Bauder's gestures and ordered the editor to stay away while Hunter was on the stand.

When the case resumed a few days later, and after Hunter had been on the stand for a few hours, prosecutor Hugo was stricken with chest pains. She was wheeled from the downtown San Diego courthouse on a stretcher and taken to a La Jolla hospital, where she was tested and released after a few hours.

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