Hunter’s Fraud and Tax-Evasion Trial Is Recessed as Prosecutor Becomes Ill

S. Gay Hugo, the lead prosecutor in Nancy Hoover Hunter’s lengthy fraud and tax evasion trial, was stricken with chest pains Tuesday as Hunter testified and was eased out of San Diego’s downtown federal courthouse on a stretcher.

Hugo, 46, was taken out of U.S. District Judge Earl B. Gilliam’s courtroom shortly before 11:30 a.m., about 20 minutes after Hunter, testifying in her own defense, pointed out to the judge from the stand that Hugo appeared to be in discomfort.

Hugo was rushed to Scripps Memorial Hospital in La Jolla, where she underwent a “battery of tests” and was discharged shortly after 3 p.m., said Lynn Morra, a hospital spokeswoman.

Gilliam, who immediately called a recess when Hugo was stricken, tentatively ordered testimony to resume today, the judge’s law clerk said. U.S. Atty. William Braniff, however, said late Tuesday that federal prosecutors “expect Gay back in court Thursday” and would ask Gilliam to continue the trial one more day.

Hunter is facing 197 counts of fraud and tax evasion stemming from her role as a top executive in J. David & Co., the La Jolla investment firm that collapsed in 1984 when nervous investors forced it into bankruptcy court.

Investigators later showed that the J. David firm, headed by J. David (Jerry) Dominelli, Hunter’s former lover, bilked 1,200 investors of $80 million. Dominelli pleaded guilty in 1985 to four counts of fraud and tax evasion in connection with the firm’s Ponzi scheme and is serving a 20-year federal prison sentence.

Hugo, the chief prosecutor in the case, has argued since Hunter’s trial began in March that Hunter was second in command at the firm and was actively involved in carrying out the giant fraud. Defense attorneys claim Hunter was blinded by her love for Dominelli and unaware of any illegal activities.

Hugo’s illness was the second unusual event in as many days of testimony to bring the trial to a halt. On Friday, the financial editor of the San Diego Union, Don Bauder, made faces of incredulity during Hunter’s testimony, prompting a break while Gilliam tried to figure out whether any harm had been done.

Gilliam allowed Hunter--who wept during that interruption--to resume testifying last Friday only after he was satisfied that jurors had not been improperly influenced by Bauder’s gestures and ordered him to stay away from the trial while she was on the stand.

Tuesday marked Hunter’s fourth day of testimony. She was well into it, discussing a company J. David had contracted to handle client accounts, when she whispered to Gilliam from the stand as she pointed to Hugo.

Hugo sat still at the prosecutors’ table and did not say anything as jurors, reporters and spectators filed out of the courtroom.

After paramedics arrived, they gave Hugo oxygen, but she was sitting up and alert as they wheeled her out of the courtroom. “Oh my God, they’re out there,” Hugo said when she saw a crowd of onlookers gathered to see her leave by the door to the rear hallway of the courtroom.

Hugo has been a federal prosecutor in San Diego for 5 1/2 years, Braniff said. Before moving to San Diego, she prosecuted organized crime cases in Chicago, he said.

Hugo also is a Del Mar city councilwoman. Coincidentally, Hunter is a former mayor of Del Mar.