The Final Guilty Plea Wraps Up the Lengthy J. David Swindle Saga
A former executive with the La Jolla investment firm J. David & Co. pleaded guilty Tuesday in San Diego federal court to two felony counts, finally closing the court files on an $80-million fraud that turned out to be one of San Diego’s most riveting and sensational scams.
In a plea bargain that averted a trial next week, Mark Robert Yarry, 51, of Southampton, England, pleaded guilty to mail fraud and the unlawful sale of securities. In exchange, prosecutors agreed to drop the original 26-count indictment against Yarry when he is sentenced May 26 by U.S. District Judge Earl B. Gilliam.
Yarry, who was managing director of a J. David bank, faces up to 10 years behind bars and a fine of $260,000. But Assistant U.S. Atty. George D. Hardy, the prosecutor in the case, said the government will ask for no more than five years in prison.
“We are gratified that the final chapter can be written with a guilty plea rather than with an extended, expensive trial,” Hardy said Tuesday. Added Yarry’s defense attorney, San Diego lawyer Michael Pancer: “There was a collective sigh of relief by all parties to have (the J. David saga) finally resolved.”
J. David & Co. collapsed eight years ago after attracting thousands of affluent clients by promising investors abnormally high returns. It turned out that what J. David was running was a Ponzi scheme, in which money from new investors was used to pay off old investors, and little actual commodity trading was done.
The complicated fraud bilked about 1,500 investors of $80 million from 1979 to 1984. It led to years of court battles against J. David’s principals.
J. David (Jerry) Dominelli, the firm’s founder, pleaded guilty in 1985 to fraud and tax evasion in connection with the scheme. He is serving a 20-year sentence in federal prison.
Nancy Hoover Hunter, the firm’s second-in-command who carried on a love affair with Dominelli, endured an eight-month trial in 1989, the longest-running criminal case in the history of the San Diego federal court. After being charged with 197 counts, she was convicted of four. Hunter, a former mayor of Del Mar, is serving a 6 1/2-year prison term.
Edward J. (Ted) Pulaski Jr., the firm’s top salesman, went to trial last year on felony charges of using the mail to sell unregistered securities. After three weeks of deliberations, the jury ended up deadlocked. Prosecutors opted last Oct. 11 to drop charges against him rather than go through a second trial.
Yarry, who served as director of an offshore bank that the J. David firm set up, had been set to go to trial Feb. 11. He was indicted in 1987 on fraud and securities charges, prosecutor Hardy said.
Yarry pleaded guilty Tuesday to misleading federal regulators who were investigating the J. David firm and to selling unregistered securities.
Yarry “made some mistakes and admitted to those,” defense lawyer Pancer said. “But he did not know Jerry (Dominelli) was stealing or defrauding people of their funds.”
Pancer said Yarry’s motivation in striking a plea bargain was simple. “This matter has been dragging on for some 10 years now, since (Yarry) started to work at J. David,” Pancer said. “He was most anxious to get that period of his life behind him.”
Yarry remains free pending sentencing on $100,000 bail, according to court records.
