Ex-J. David Aide Says Hunter Had Access to Data on Firm’s Woes
A former financial officer for the J. David & Co. investment firm testified Wednesday that he prepared statements for J. David (Jerry) Dominelli and Nancy Hoover Hunter indicating the dismal financial shape of some J. David subsidiaries.
Chris Kalabokes, who worked in the La Jolla offices of J. David & Co. just before the firm’s collapse in 1984, said the statements were prepared at Hunter’s and Dominelli’s request and for their eyes only.
The testimony appeared to undercut Hunter’s contention that she was unaware of the illegal activities that led to the downfall of the apparently profitable investment firm.
Hunter is charged with 234 counts of fraud, conspiracy and income-tax evasion stemming from her alleged role as a key executive in the firm. After the firm was forced into bankruptcy court in 1984, it became clear that the operation was huge Ponzi scheme, where money from new investors was used to pay off old clients and little successful trading was done.
Hunter actively participated in “all facets of the operations,” especially personnel matters, Kalabokes testified.
Kalabokes said reports he prepared for about seven months, beginning in June, 1983, indicated that all of the J. David subsidiaries under his control lost money every month, particularly J. David Securities, which “showed significant losses.”
Although Kalabokes oversaw a number of J. David entities, he was denied access to documents and other information related to some of the major subsidiaries and several checking accounts, he said.
“With a smile on his face, (Dominelli) told me it was none of my business,” Kalabokes said.
Kalabokes, who is now president of a Northern California winery, is expected to take the stand again this morning.