Hunter Testifies to Her Love for Dominelli

In a long-awaited appearance, a teary-eyed Nancy Hoover Hunter took the stand in her own defense Wednesday and talked of love and her affair with J. David (Jerry) Dominelli, founder of the failed J. David & Co. investment firm.

Hunter, who is charged with 197 counts of tax evasion and fraud, described how she and Dominelli met, how they fell in love in 1979 and how he wrote her letters in which he said he loved her “more than anything” and promised to live his life with her.

Her testimony took so much time that court adjourned for the day before Hunter was able to describe her version of business at Dominelli’s La Jolla investment firm and its collapse in 1984. About 1,200 investors lost about $80 million in the J. David affair, a giant fraud in which prosecutors allege Hunter played an active role and which led to Dominelli’s conviction.

Hunter’s testimony was consistent with the theme her defense attorneys have been stressing since the lengthy trial began in March: that Hunter was blinded by her love for Dominelli and was unaware of his illegal activities.

Dominelli pleaded guilty in 1985 to four counts of fraud and tax evasion in connection with the investment firm’s Ponzi scheme and is serving a 20-year sentence in federal prison.

Clients were lured to J. David & Co. by the use of phony investment records and the promise of fabulous returns on their money. In reality, J. David had a dismal investment record and old clients were paid with money from new investors.

In February, 1984, its checks began to bounce, and nervous investors forced the firm into bankruptcy.

Hunter described Wednesday how she first met Dominelli, in the late 1970s, when they were both married to other people and worked at the same La Jolla brokerage firm--Bache, Halsey, Stuart, Shields--where she had worked since 1976.

At first she disliked Dominelli, she said, thinking he was a male chauvinist. But, by the summer of 1979, she came to like him, then love him, as he told her stories about his poor background and his service in Vietnam. In fact, Dominelli had never been to Vietnam, Hunter’s lawyers have said.

Hunter said she confessed to her then-husband, George Hoover--a former officer in the U.S. government’s foreign service who later became a stockbroker and with whom Hunter had two children--that she was in love with Dominelli.

Dominelli, meanwhile, promised that one day Hunter and her children would live with him as a family, she said. And he wrote her letters in which he said “he loved me more than anything in the world” and promised to spend his life with her, Hunter said. She believed him and “read and reread the letters many times.”

Eventually, Hunter and Dominelli began living together and spent millions of dollars of investors’ money on expensive homes, cars and furs. They spent more than $1.5 million to remodel office space in La Jolla, Chicago and San Francisco, prosecutors have said.

Hunter and Dominelli eventually broke up, after J. David collapsed. She has since remarried and lives with her new husband, businessman Kenneth Hunter, near Santa Barbara.

On the stand Wednesday, Hunter had time to turn only to J. David’s initial months. In 1979 and 1980, she said, she typed drafts of the brochures Dominelli used in luring investors.

In line with the defense theory that Dominelli was in sole control of the company, down to even the smallest details, she said he wrote and made all revisions to the brochures. She simply typed them, she said.

Many of the jurors were attentive to Hunter’s every word and leaned forward in their seats to listen to her. She was expected to take the stand again today for what her lawyers estimated would be at least another two days of testimony.

The defense is expected to rest its case by the end of next week.