Judge Warns of ‘Fertile Ground’ but Denies Mistrial for Hoover
The judge in the Nancy Hoover Hunter fraud trial on Friday turned down a request by her lawyers that a mistrial be declared because prosecutors had failed to turn over documents related to a witness who testified Thursday and Friday.
However, U. S. District Judge Earl B. Gilliam said the lawyers were on “very fertile ground” and may raise the issue again next week when the trial resumes.
Hunter is charged with 234 counts of conspiracy, mail fraud, fraud by a commodity pool operator, making false statements to a federal agency, income-tax evasion, and aiding and assisting in the false preparation and filing of income-tax returns. The charges stem from her role as a top executive in the J. David & Co. investment firm, which bilked investors of at least $80 million in the early 1980s.
The mistrial request came as one of Hunter’s lawyers, Robert Brewer, concluded his cross-examination Friday of John Farrish, the former manager of a Bache, Halsey, Stuart, Shields branch office where Hunter once worked as a stock broker. Farrish, who now works for a brokerage firm in Minneapolis, took the stand Thursday as the fourth prosecution witness.
Farrish testified that he was suspicious of J. David (Jerry) Dominelli, the founder of J. David & Co., long before the firm was forced into bankruptcy court by nervous investors in February, 1984. Hunter, who became Dominelli’s live-in companion, and several other Bache employees quit their jobs and went to work for Dominelli in 1980 and 1981 as Dominelli’s business began to boom, Farrish said. Dominelli himself had worked for Bache but quit in 1979 to begin his own firm.
Farrish said he could not understand how Dominelli could be producing 40% to 50% returns on investments. He said he once wrote Dominelli a letter asking him to explain documents that apparently were false investment “track records” prepared by Dominelli to indicate that he had made large profits at Bache when, in fact, he had lost money for investors.
Despite several confrontations, Dominelli never explained the discrepancies, Farrish said. Hunter was present during one of those confrontations, which occurred on a street in La Jolla, he said.
Hunter’s lawyers are attempting to persuade the jury that Dominelli alone knew of the fraud being committed and that she was unaware of his illegal activities.
11 Pages of Notes
The documents that were not turned over to the defense were 11 pages of handwritten notes and typed memorandums prepared by Internal Revenue Service agents, who interviewed Farrish in 1982, and by FBI agents, who talked to him in 1985.
Near the end of cross-examination, Farrish mentioned that he had seen a memorandum in a prosecutor’s office earlier this year, prompting Brewer to complain that the document had never been turned over to him as required by federal court “discovery” rules.
Assistant U. S. Atty. Stephen P. Clark said he had been under the impression that the defense had received the document and pointed out that an inventory filed with the court listed the handwritten notes.
