Former J. David Lawyer Admits Guilt in Fraud

Michael A. Clark, a lawyer who worked for the fraud-ridden J. David & Co. investment firm, pleaded guilty Tuesday to two counts of securities violations and agreed to cooperate with federal prosecutors investigating the bankrupt company.

Clark, 46, a former partner in the La Jolla law firm of Wiles Circuit & Tremblay, was considered a close associate of J. David (Jerry) Dominelli, the founder of the firm that defrauded investors of about $82 million.

In a plea bargain signed Tuesday, Clark promised to testify before a federal grand jury and at upcoming trials of principals in the investment scheme.

Because of Clark’s close association with Dominelli, his cooperation and potential testimony are considered useful to prosecutors. Clark was one of the few non-staffers at J. David who had access to the luxurious wood-paneled inner sanctum where Dominelli reportedly conducted trades and consummated deals.

Clark pleaded guilty before U.S. District Judge Earl Gilliam to two counts of using the mails to sell unregistered securities. Each charge carries a maximum penalty of five years in prison and a $10,000 fine.

However, Clark will not be sentenced until next January, after his grand jury and trial testimony is completed. Prosecutors will recommend a sentence based on how completely Clark cooperates over the next year, according to Assistant U.S. Atty. Gay Hugo.

Dominelli is serving a 20-year prison term for his role in the fraud, but his second in command, Nancy Hoover, the former mayor of Del Mar, has not yet been tried.

Hoover, Dominelli’s former live-in companion, was indicted in November, 1986, on charges of fraud, conspiracy and income tax evasion.

Clark and his former law firm have already lost a civil suit brought by five J. David investors, who were awarded $580,700 in actual and punitive damages.