Hunter Admits Guilt on 4 Felony Counts : Crime: The plea bargain, reached as she was about to go to trial a second time, ends federal cases against her in the J. David scam.

Nancy Hoover Hunter pleaded guilty Tuesday to four felony counts stemming from the J. David & Co. investment fraud, bringing to an end various federal cases against her by finally admitting criminal involvement in the $80-million scam.

Under a plea bargain struck on the day Hunter was due to go to trial again on fraud and conspiracy charges linked to the J. David collapse, she pleaded guilty to two counts apiece in two separate cases against her. She was immediately sentenced to 10 years in prison, the same term she received for a conviction last year on tax evasion charges.

Hunter, a former Del Mar mayor, admitted that she created a false investment brochure, misled a federal commodities regulator and sold unregistered securities through the mail. She had claimed for years that she was innocent of all charges, and endured an eight-month trial last year that resulted in a conviction only on four counts of tax evasion.

In exchange for the guilty pleas, federal prosecutors agreed to drop the hundreds of remaining charges against Hunter. Prosecutors also promised not to seek further criminal charges against her, but left the Internal Revenue Service free to pursue civil action against Hunter in connection with the tax convictions.

Immediately upon hearing Hunter say she was guilty, U. S. District Judge Earl B. Gilliam sentenced her to the 10-year prison term. But Gilliam ordered the term to run concurrently with the 10-year sentence he imposed after Hunter was convicted in December on the tax counts following that first trial on charges stemming from the J. David affair.

Hunter, 51, who essentially served as the second-in-command at J. David, cried Tuesday as she told Gilliam that she was “terribly sorry” because she had “caused a lot of harm to people.”

“That’s a burden I’m trying to live with, your honor,” she said. “It will never leave me for the rest of my life.”

The complicated J. David fraud bilked about 1,500 investors of some $80 million from 1979 to 1984. It involved 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 alleged that Hunter played a key role in the scheme, creating false documents to lure investors to J. David and then lull them into staying put while the firm slid toward bankruptcy, which it 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 scheme and is serving a 20-year sentence in federal prison.

After last year’s eight-month trial, a jury convicted Hunter on Dec. 11 of only the four tax counts--out of 197 total charges. It acquitted her of one other tax charge and deadlocked, 11 to 1 for conviction, on 192 other counts, primarily fraud and conspiracy stemming from her role at J. David.

Hunter’s first trial is believed to have been the longest-running criminal case in the history of the San Diego federal court.

Prosecutors had been prepared to go to trial again--beginning Tuesday--on those 192 counts. They also had indicated that after that case ended, Hunter faced yet another trial, on securities violations connected to the J. David affair.

Hunter, however, averted any more trials by pleading guilty to two counts apiece in each of those two cases and agreeing to drop any appeals from the first trial. In return, Assistant U.S. Atty. S. Gay Hugo, the lead prosecutor on the case, dropped the 190 other counts due to be tried immediately and the 54 securities counts in the other case.

In a written agreement detailing her pleas, Hunter admitted she helped Dominelli create an inflated version of his 1980 trades for a brochure designed to attract investors to J. David.

She also said she misled a federal commodities regulator. On June 7, 1982, Hunter instructed a J. David employee to tell the regulator that J. David traded only out of one commodities account when, in fact, it maintained several, she told Gilliam.

The two remaining counts involved the mail sale by J. David of securities that were not registered with federal regulators. Hunter said the sales went through even though it was known at J. David that federal law required registration.

In the written agreement, Hunter said she “willfully and intentionally closed her eyes to events around her.”

Upon Hugo’s recommendation, Gilliam ordered that Hunter serve her sentence at a minimum-security facility. He also added a five-year probation term after the 10-year prison term ends, making the sentence match precisely the one he imposed for the tax charges.

Gilliam levied no fines. He did not order fines for the tax counts, either.

The judge did not indicate Tuesday when Hunter would be eligible for parole.