Ex-Executive for J. David Wants to End 2-Year Exile
Acknowledging that he may have participated in various securities laws violations, Mark Yarry, once a major money-raiser for the fraudulent J. David & Co. investment firm in San Diego, now says that he wants to end his self-imposed two-year exile.
Yarry said that if he is indicted by a federal grand jury investigating the firm he will return to the United States.
“I don’t want to be a fugitive,” he said during a series of interviews with The Times. “I’d love to go back home; I’m an American (and) I want to go home. (But) if San Diego is going to demand a pound of flesh . . . there’s nothing I can do.”
Yarry’s remarks broke a two-year silence that he has maintained since he left California for Europe after J. David’s collapse in early 1984. Yarry, 46, 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 with promises of annual returns as high as 40%. Its demise eventually brought down the career of San Diego Mayor Roger Hedgecock, whose 1983 campaign was secretly bankrolled by J. David.
Dominelli later admitted he invested virtually none of his clients’ funds and that he lost about $82 million in investor money. Dominelli is now serving a 20-year prison sentence after pleading guilty last year to fraud and income tax evasion.
Yarry, who said he fled to avoid harassment of his family by angry J. David investors and curious reporters, said he did not know J. David was a Ponzi scheme, where new investor funds are needed to pay off existing clients.
“I want people to believe that I thought I was involved in a legitimate business, not a scam,” said Yarry, bearded and nearly 30 pounds lighter than when he left San Diego.
Indictments Expected
“With the exception of a possible violation of securities laws no one has yet come up with one piece of evidence to my knowledge that shows I was in any way an accomplice to Jerry Dominelli,” he said.
Government prosecutors are now attempting to discover how much Yarry and others affiliated with the once-high-flying investment firm actually knew about the company’s fraudulent operations. Grand jury indictments are expected in the next few months, according to sources close to the case.
In addition to possible securities laws violations, authorities are also probing Yarry’s secret Swiss bank account--which he named Sebastian, after his cat--that purportedly contained $530,000. More than half the money in that account, which Yarry liquidated in mid-1984--was from the sale of Yarry’s stock in a J. David subsidiary.
Yarry may owe more than $150,000 in back federal income taxes from that account and other transactions, according to sources close to the J. David case. Yarry refused to discuss the Sebastian account.
He says his checkered past includes selling inexpensive diamonds, practicing medicine without a license and posing as a Mafioso to break a British counterfeiting ring for Scotland Yard. He also has authored a book on commodities trading and claims to have crossed the Swiss and Italian Alps in a hot-air balloon.
Doesn’t Miss Old Life
Yarry says that 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, which is partly owned by his wife.
But life in exile has been hard on Yarry, his wife and two teen-age daughters, he said. He has been isolated and his rare discussions of J. David with outsiders have been brief, superficial and typically on the telephone.
“Talking helps,” he said, chain-smoking during one 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 blind-sided.”
He has discussed J. David under oath only once--in a deposition to the firm’s bankruptcy trustee in March, 1984, during which he invoked the Fifth Amendment protection against self-incrimination 121 times.
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.”
