Judge Delays Ruling on Hunter Trial

A federal judge ruled Tuesday that it was too soon to decide whether Nancy Hoover Hunter could get a fair shake in San Diego at her retrial on fraud and conspiracy charges stemming from the collapse of the J. David & Co. investment firm.

Responding to a defense plea to move the second trial to San Jose or San Francisco because of intense publicity about Hunter’s first trial, U.S. District Judge Earl B. Gilliam said he had no choice but to wait until May to decide.

The law, Gilliam said, allows him to transfer a case only after the questioning of prospective jurors, due to begin May 1 in the second trial. If it appears then that San Diego-area jurors cannot be impartial, then the time would be right to consider a transfer, Gilliam said.

Hunter, convicted at the first trial of four counts of tax evasion connected to the giant J. David & Co. fraud, faces a retrial on 192 other counts, primarily fraud and conspiracy stemming from her role at the failed La Jolla firm.

Two weeks ago, Gilliam sentenced Hunter to 10 years in federal prison on the tax evasion charges, saying her case was “a little more than an income tax violation” matter.

The jury that convicted Hunter of the four tax counts deadlocked, 11 to 1, for conviction on the 192 fraud and conspiracy counts. It acquitted her of one other tax-related charge.

About 1,500 investors lost about $80 million in the J. David affair, a Ponzi scheme in which money from new investors was used to pay off old investors and little actual trading of stocks or money market funds was done.

Prosecutors allege that Hunter, a former Del Mar mayor, created false documents to lure investors to J. David and then to lull them into staying put while the firm slid toward the bankruptcy that was declared in February, 1984.

Hunter’s ex-lover, firm founder J. David (Jerry) Dominelli, pleaded guilty in 1985 to fraud and tax evasion in connection with the Ponzi scheme and is serving a 20-year sentence in federal prison in Pleasanton, Calif.

Hunter’s first trial, which ended Dec. 11, took eight months and produced enough newspaper clippings to fill two volumes, Gilliam said Tuesday. The judge said he kept a copy of every single story written about the case.

Defense lawyer Richard Marmaro contended that the publicity has been so intense--and, he said, so adverse--that Hunter could not be guaranteed a fair trial the second time around in San Diego.

Defense lawyers commissioned a survey earlier this month of potential San Diego-area jurors and discovered that 84% of the people surveyed recognized Hunter’s name, Marmaro said. The random telephone survey of 308 people also revealed that 32% believed Hunter was guilty of the 192 fraud and conspiracy counts, Marmaro said.

Assistant U.S. Atty. S. Gay Hugo, however, told Gilliam that the law rarely allows a federal judge to move a case out of the original jurisdiction and permits a transfer before a case actually begins--with the questioning of jurors--only in “extreme circumstances.”

The survey proved only that there was still a vast majority of people who had not formed an opinion about Hunter, Hugo said, adding that hardly qualified the circumstances as “extreme.”

Gilliam said he agreed with Hugo. If, after jurors were questioned, Marmaro wanted to renew his request to move the trial, the judge said, he will take up the matter again at that time.

After Hunter’s second trial concludes, she faces yet another trial on securities violations connected to J. David. That trial will begin Oct. 16, Gilliam announced Tuesday.