J. David Executive Gets 10-Year Term for Evading Taxes
Nancy Hoover Hunter, convicted of four counts of tax evasion in connection with the J. David & Co. investment fraud, was sentenced Tuesday to 10 years in federal prison.
Hunter, 51, a former top executive with the failed La Jolla investment firm, begged U.S. District Judge Earl B. Gilliam for mercy, crying and holding on to a lectern for support as she said she was “terribly sorry for all the pain and suffering I’ve caused.”
Hunter’s attorneys had pleaded with Gilliam to view her conviction apart from the complicated J. David fraud, which bilked about 1,500 investors of about $80 million from 1979 to 1984.
But Gilliam said the case was “a little more than an income-tax violation case.” The judge added, “We have in this case the motive, the extravagance and, uppermost, the people who were hurt.”
Gilliam, who could have sentenced Hunter to 20 years in prison, added a five-year probation term after the 10-year prison sentence concludes. But he did not impose a fine. The judge said he was not ready to consider when Hunter would be eligible for parole.
The giant J. David fraud involved a Ponzi scheme in which money from new investors was used to pay off old investors and little actual trading was done. Prosecutors allege that Hunter created false documents to lure investors to J. David and then to lull them into staying put while the firm slid toward a bankruptcy that was declared in February, 1984.
Hunter’s former lover, firm founder J. David (Jerry) Dominelli, pleaded guilty in 1985 to fraud and tax evasion in connection with the scheme and is serving a 20-year sentence in federal prison.
A jury convicted Hunter Dec. 11 of the four tax counts--out of 197 total charges. It acquitted her of one other tax charge but deadlocked on 192 other counts, primarily fraud and conspiracy stemming from her role at J. David.
The tax charges involved nearly $2 million that Hunter failed to report on her personal income taxes for the years 1980 through 1983, evading nearly $1 million in taxes. At the trial, Hunter said Dominelli had assured her he would take care of any tax.
Prosecutors have said they intend to go to trial again on the 192 counts. A May 1 trial date has been set. When the second trial ends, Hunter faces yet another trial on securities violations connected to the J. David case.
