Plea Bargain Could Mean 20-Year Term for Dominelli

Jailed financier J. David (Jerry) Dominelli, whose now-fallen money-trading firm once lured nearly 1,000 investors and $100 million, could face a prison sentence of 20 years under terms of a plea agreement with federal prosecutors.

Dominelli will plead guilty next week to four felonies--two for crimes committed before the bankruptcy of his once-mighty J. David & Co. investment firm, and two for crimes occurring after, according to sources close to the case.

The pleas include one count of mail fraud and a tax violation charge before the Feb. 13, 1984, involuntary bankruptcy of J. David & Co., as well as charges of bankruptcy fraud and mail fraud after the bankruptcy.

Each carries a maximum prison sentence of five years.

Assistant U.S. Atty. Robert D. Rose, who has led the yearlong federal grand jury probe of Dominelli and his investment company, would not comment on the nature or number of the charges involved in Dominelli’s plea. The agreement ends the federal government’s investigation of Dominelli, although the grand jury will continue to investigate others connected to the J. David imbroglio.

Dominelli, who had been indicted by a federal grand jury on 25 counts of fraud and perjury for events after the bankruptcy of J. David, was to have entered his guilty pleas this afternoon before U.S. District Judge William B. Enright, but the proceeding was delayed until March 21 because of court-scheduling conflicts.

The two pre-bankruptcy charges were never officially brought by the government, although the federal grand jury is still investigating Dominelli and J. David activities before the collapse and was expected to indict the 43-year-old financier on several charges, possibly including wire, securities, mail and tax fraud.

The government will recommend that Dominelli be sentenced to the Federal Correctional Institution at Pleasanton, a federal prison about 40 miles east of San Francisco, according to the plea agreement.

If Dominelli is sentenced to the maximum 20 years, he would be expected to serve at least seven but no more than 14 years in prison. Typically, federal prisoners serve between one-third and two-thirds of their sentences.

The agreement with Dominelli does not deal with federal grand jury action against any one else connected to J. David, nor does it promise that the state charges of conspiracy and perjury will be dropped in connection with the alleged funneling of thousands of dollars to Mayor Roger Hedgecock’s 1983 mayoral campaign. Dominelli’s attorneys in the state charges were involved in some of the federal plea-bargaining talks.

Because he is still recovering from the effects of a stroke on Oct. 2 that left him partially paralyzed, Dominelli’s competence to plead guilty was partly at issue in the plea-bargaining negotiations.

Court-appointed psychiatrists Mark A. Kalish and Murray H. Rosenthal, who previously examined Dominelli and found him to be competent to stand trial, were involved in a portion of the plea-agreement process.

Rose, in a court filing last week, asked Enright to rule that Dominelli is competent to plead guilty and quoted Kalish’s finding that Dominelli understood the plea bargaining process.

“He understood that he could plead guilty to several charges in exchange for the dismissal of other charges,” Kalish wrote.

Co-defendant Parin Columna, meanwhile, will plead guilty on March 21 to one misdemeanor count of aiding and abetting Dominelli during the financier’s flight to the Caribbean island of Montserrat in April to avoid imprisonment, said Michael J. McCabe, Columna’s attorney.

In return, federal prosecutors will dismiss the eight-count felony grand jury indictment now facing Columna and will recommend that he be given probation and no prison sentence.

“Dominelli’s disposition greatly affected the government’s willingness to go to trial against an individual who clearly isn’t one of the main actors,” McCabe said.

Rose would not comment on Columna’s agreement.

Columna, a local contractor who has been fiercely loyal to Dominelli, was accused of removing crucial company documents in the days before and after the J. David bankruptcy. Federal prosecutors also accused him of transporting news and financial wire service machines to Montserrat in April.