Nancy Hoover Hunter, who was convicted in December on federal charges of tax evasion, deserves a new trial because a jury found her guilty of a phantom tax law, and the judge who presided over her case improperly pressured the jury, her lawyers said Friday.
In legal briefs filed with the San Diego federal court, Hunter's lawyers also asked that a new trial be moved to San Francisco. Hunter can't get a fair trial in San Diego because there's been so much publicity about her case, defense attorneys said.
Hunter, convicted after an eight-month trial of four of 197 counts, is already set to face a second trial next month on the remaining 192 counts, primarily dealing with fraud and conspiracy charges stemming from her role as a top executive in the failed La Jolla investment firm J. David & Co.
Hunter's lawyers contended Friday that she should be tried again on the four tax evasion charges because, after what is believed to be the longest criminal case in the history of the San Diego federal court, she was wrongly convicted the first time.
Convicted on Dec. 11, Hunter, 51, a former Del Mar mayor, faces up to 20 years in prison. Immediately following her conviction, U.S. District Judge Earl B. Gilliam ordered Hunter to jail while she awaits her sentencing on March 6.
The jury acquitted Hunter of one other tax charge but deadlocked on the 192 counts stemming from her purported involvement in a Ponzi scheme run by the J. David firm from 1979 to 1984.
Federal prosecutors alleged that Hunter created false documents both to lure investors to J. David and then to lull them into staying put while the firm slid toward bankruptcy. Investors lost about $80 million in the scandal.
The four tax counts involved thousands of dollars that Hunter received from her lover, firm founder J. David (Jerry) Dominelli, but did not report on her personal income tax forms for the years 1980 to 1983. At trial, Hunter said Dominelli, now serving a 20-year sentence in federal prison for fraud and tax evasion, told her that she should not consider the money income to her and that he would be responsible for any tax on it.
When the jury got the case, "one or two other jurors" told juror John Posey, 44, of National City, that, even if the money from Dominelli was a gift, the law still was that she had to pay the tax on any amount over $10,000, defense lawyers said Friday in their briefs.
That was not what Gilliam had told the jury the law was and, besides, it was not an accurate statement because no such law exists, the lawyers said.
However, because of what he was told, Posey switched his vote from not guilty to guilty on each of the four counts, he said in a sworn statement filed with the lawyers' briefs.
The jury deadlocked, 11 to 1, in favor of conviction on the 192 fraud and conspiracy counts. Posey was the lone holdout.
The panel originally was split over those counts, Posey said in his statement. After six days of deliberations, though, Gilliam told the panel that it "should have reached a verdict by now."
Though the judge retracted that statement the next day, "the damage was done," Posey said. "I think that jurors who were looking for a way out of the deliberations then saw that the easiest way out was to side with the jurors who were voting guilty," he said.
"By the time that Judge Gilliam retracted his statement, it was too late to stop this momentum," he said.
Referring to Posey's remarks, defense attorneys said Gilliam's "unwarranted intervention had the disastrous effect of coercing a verdict."
In asking that the second trial be moved to San Francisco, the lawyers said the public had been "literally bombarded on almost a daily basis with articles" about the first trial, from last March to last December.
Because of press attention, "it is now impossible" for Hunter to get a fair trial in San Diego, the attorneys charged.
Defense lawyers told Gilliam before the first trial that it should be moved because of extensive publicity. He denied that request.