Mark Yarry : Dominelli 'Blindsided' Him, Fund-Raiser Says

San Diego County Business Editor

Mark Yarry was doing what he does best--making a pitch.

But this time he wasn't selling cheap diamonds to unsuspecting foreigners or practicing medicine without a license or posing as a Mafioso for Scotland Yard. And he is no longer peddling unregistered J. David & Co. securities to wealthy San Diegans.

This time Yarry, once a major money-raiser for the fraudulent investment firm, pitched his innocence and a plan to come home.

"Talking helps," he said, chain-smoking during a long, emotional interview. "The more I hear myself, the better I feel. It reconfirms that I didn't do anything wrong. I didn't steal any money; I was blindsided."

Breaking the two-year silence he has maintained since he left California for Europe after J. David's collapse in early 1984, Yarry began a series of interviews here with the statement: "After three days, you'll either believe me or you won't."

Aware that a federal grand jury in San Diego is likely to indict him soon for fraud and income tax evasion, Yarry for the first time discussed J. David's inner workings, his own role in the firm and his relationship with company founder J. David (Jerry) Dominelli. The La Jolla investment firm attracted $200 million from 1,500 investors and eventually brought down the career of San Diego Mayor Roger Hedgecock.

"I want people to believe that I thought I was involved in a legitimate business, not a scam," Yarry, bearded and nearly 30 pounds lighter than when he left San Diego, said over dinner at a fashionable restaurant fronting Buckingham Palace Gardens.

Now, two years after leaving San Diego, he says he doesn't particularly miss his two Rolls-Royces, his chauffeur, his ranch house on four acres of sloping hillside in Poway and his six-figure J. David salary.

On the contrary, he said, he's happy living in a small rented house 40 miles outside London, driving a modest Renault and working as a $2,300-a-month salesman for an England-based pet supply firm.

But the roguish Yarry says he wants to end his self-imposed exile.

"I'd love to go back home; I'm an American (and) I want to go home," Yarry said. "If San Diego is going to demand a pound of flesh . . . there's nothing I can do."

When the federal grand jury issues its expected indictment in the coming months, Yarry said, he will return to the United States voluntarily.

"I don't want to be a fugitive," he said.

There probably were violations of various securities laws because the firm didn't register its clients' accounts with state and federal regulators, he acknowledged.

But he attributed those violations--felonies under federal law--more to bad business decisions than to criminal conspiracies.

Yarry's culpability is "as complete as Dominelli's," according to attorney Michael Aguirre, who has sued Yarry and others on behalf of J. David investors.

Yarry fled San Diego two months after J. David's collapse because, he said, he wanted to avoid harassment of his family by angry investors and inquisitive reporters. He has since lived in France and England.

He has discussed J. David under oath only once--in a deposition to the firm's bankruptcy trustee, during which he invoked the Fifth Amendment protection against self-incrimination 121 times.

In his interviews with The Times over a period of three days recently, Yarry agreed to discuss virtually every aspect of J. David. He refused, however, to talk about his secret Swiss bank account--named Sebastian, after his cat--in which he deposited $530,000 that came from the 1983 sale of his stock in J. David and from the sale of his Rolls-Royces and his house in 1984.

To many investors and their attorneys who have sued Yarry, and to some government authorities, Yarry remains the only unsolved mystery in a company that long ago lost all semblance of mystery.

Yarry's title was managing director of J. David Banking Co. Ltd., which supposedly served as a depository for funds investors believed were headed overseas. In fact, money deposited in J. David Banking Co. Ltd. was never forwarded to foreign banks, but stayed in an account at First National Bank of San Diego, authorities claim.

Yarry was in charge of keeping track of investors' deposits. When a client invested, a secretary would Telex the information to J. David's London office, where Yarry's staff would duly note the transaction. While U.S. regulators were told this version, English banking officials were told that J. David was soliciting clients for investments only in the United States.

Yarry spent his time hopscotching between J. David's luxurious La Jolla offices and its branches in London and Lugano, Switzerland, raising money from international clients and posting U.S. investors' deposits.

"I don't want to be the mystery man, I never did," he said. "But people aren't satisfied, and (believe) there hasn't been enough blood drawn. They say, 'How could one man (Dominelli) do this?' But the facts are that one man did it."

J. David's promises of annual returns of as much as 40% from foreign currency trading made the company the darling of Southern California investors from 1979 until its collapse in February, 1984. Dominelli admitted last year that he did virtually no trading and that he swindled investors out of about $82 million.

Dominelli and Nancy Hoover, his companion and chief associate, marketed the J. David myth by spending lavishly on luxury cars and homes and giving generously to charitable causes.

Dominelli is serving a 20-year prison term after pleading guilty to federal charges of fraud and income tax evasion last year. Hoover still faces state charges of making illegal campaign contributions to former San Diego Mayor Hedgecock, who was convicted of related charges and removed from office last year. Dominelli pleaded guilty to those charges in February.

Yarry insisted he had nothing to do with Hedgecock's involvement in J. David and that it is purely coincidental that he and Hedgecock both retained the same attorney, Michael Pancer of San Diego.

Greed, Yarry said, played no small role at J. David.

"Everyone associated with J. David exhibited greed--employees, investors and the lawyers," he said. "And greed clouds your judgment; mine as well as others'. If you want to believe and you're given enough to get you over the hurdles of your doubts, then you will believe. The way money was talked about . . . with so much of it coming in . . . it lost all sense of reality."

Dominelli, Hoover and Yarry were generally viewed as the troika that made J. David tick, although Hoover and Yarry disliked each other and often argued bitterly, according to former employees.

By his own admission, Yarry was probably Dominelli's closest friend in the firm, although he bristles at the widely held belief that he was Dominelli's chief lieutenant.

"There were 10 No. 3 men at J. David, and each was treated as something special," Yarry said. "That was Jerry's great gift. The king had a lot of princes and he made each feel like he was the favorite son."

But the executives never met as a group, said Yarry. It was always one-on-one with Dominelli. "That's how he built and kept his power and (kept) the thing covered up," Yarry said.

Yarry met Dominelli in 1980, while Yarry was writing a book on commodities trading called "The Fastest Game in Town."

A neighbor of Dominelli's in Rancho Bernardo, Yarry at first invested $15,000 with him. He said he was impressed with how fast his investment increased--so impressed that, in the summer of 1981, he joined J. David's small staff.

As the company profited, so, too, did Yarry.

He moved from a modest home in Rancho Bernardo to a 2,900-square-foot home in Poway.

He bought two Rolls-Royces, had a chauffeur at his disposal, and was given access to the company's two executive jets. He wouldn't disclose his annual income, but said it was in six figures.

When the firm collapsed, so, too, did Yarry's life style. Life since then has been "hellish," he complained, and his self-imposed exile has taken its toll.

In contrast to his former colleagues who consoled and comforted each other in the days after J. David's collapse, Yarry has been isolated. His rare discussions of J. David with outsiders have been brief, superficial and typically on the telephone.

His marriage has been strained as well, he said, noting that his wife has a minority interest in the company where he works--a pet supply firm whose products include a remotely controlled pet-door opener.

His two daughters, ages 16 and 17, are enrolled in private school, but the tuition is paid by his mother, Yarry said.

Earning a living and making money isn't the challenge, Yarry said wistfully during one interview, "getting back my dignity is."

The next morning, Yarry abruptly canceled a scheduled third day of interviews. He said he had become violently ill during the night and had a 101-degree fever.

He remained ill for four days, he would later explain.

Mark Yarry learned how to enjoy the good life early on. A street-wise New York native and the son of a dentist, Yarry learned to survive equally well in Queens or Cannes.

He began one fancy meal in London with a prosaic rum and Coke, talked of how he enjoys fine wines, and then drank several bottles of expensive Evian mineral water.

He can impress with his soft French and then, quickly, can animate with the brassy fervor of a Lower East Sider.

Yarry's formal education, he said, consisted of one semester at a small college in Kentucky.

Yarry's first glimpse of Europe was in 1960 when he spent all of the $10,000 that he inherited from a grandmother by traveling the Continent for eight months.

When he returned, he said, he "concocted a scheme" to pose as a physician, working mostly first-aid house-call cases that "other doctors wouldn't do." Yarry, who said he grew up fascinated by medicine, played doctor not once, but twice--in New York and in Massachusetts.

Authorities discovered Yarry posing as a physician in Massachusetts, where he was charged with practicing medicine without a license. He spent 30 days in jail and concluded afterward that "my medical career (in Massachusetts) was over."

He quickly added, half-seriously: "I never lost a patient, and a lot of doctors can't say that."

With similar brazenness, Yarry later tried to take the California Medical Board exam, but was blocked by state officials because he lacked any formal medical education.

In 1974, Yarry, working in England for a Connecticut-based optical supply firm, was asked by a cab driver if he wanted to buy counterfeit currency, which was then being pumped into the economy by a man so clever and precise that British authorities dubbed him "The Magician."

Yarry decided to play along with the scheme, posing as an organized crime "family" member but actually working as a Scotland Yard informant. What followed was a two-month spy-versus-spy affair that eventually foiled the counterfeiting scheme and led to a nonfiction book about the affair called "Find the Magician!" Yarry is not listed as a co-author, but he said he shared $100,000 in publishing fees with the writer.

It was his fictional disguise in the book as someone with organized crime connections that later led many involved in the J. David affair to claim Yarry was tied to the Mafia, he said.

He describes his life as adventuresome and includes among his exploits a 1972 trip across the Swiss and Italian Alps in a hot-air balloon.

Yarry also worked as a diamond salesman in the mid-1970s, selling in England inferior stones imported from an Arizona firm that called itself DeBeers, after the South African cartel. The Arizona firm seized upon the name because the world-renowned DeBeers had not registered its name in the United States.

There's still a bit of cloak-and-dagger to Yarry.

He refused to reveal his home telephone number in either England or Nice, France, where he said he rents a one-room apartment, saying he wants to remain unavailable to those who would hound him.

As a result, the only way for a Times reporter to initiate communications was and remains the personal classified ads in the International Herald Tribune, published in Paris.

In a similar vein, Yarry at first refused to have his picture taken because he thought that some San Diegans would think that he had grown his beard to conceal his identify. He grew the beard, he said, because a doctor advised him to stop shaving to allow a skin ailment to subside.

In some cases Yarry has made claims that are contradicted by others.

For example, he claims he was a co-founder in the late 1960s of Institutional Investor, a respected business magazine. Staffers say that he was only an advertising salesman.

Similarly, Yarry said he was the interim president of the New Orleans Commodities Exchange in the late 1970s. Staff members of the exchange, which officially opened in 1981, dispute that, acknowledging only that he sold memberships before the opening.

He argued that if he had thought he was guilty of promulgating J. David's Ponzi scheme, in which new investors' deposits are needed to pay off existing clients, he would have fled to a country where extradition would be impossible.

"I may bear some moral responsibility, I'm not saying I don't," he admitted. "I should have asked questions. But if I felt guilt and I wanted to run away from someone prosecuting me, I wouldn't have gone to France. There are lots of countries where the U.S. government couldn't touch me."

Yarry's final sales pitch was in response to a widely held theory that he had been plotting ways to steal from Dominelli:

"If I was a party to knowing that (Dominelli) had ripped off the company, how was I going to rip off something that wasn't there?"

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