EMBEZzlement case Hiker pleads guilty to wire fraud

Associated Press

CINCINNATI

A Kentucky accountant who spent much of six years as a fugitive hiking the Appalachian Trail pleaded guilty Friday to a wire fraud count and agreed to pay back money embezzled in an $8.7 million case.

Federal authorities will drop 74 other counts of wire fraud and money laundering against James T. Hammes under an agreement that includes explaining what happened to the millions diverted from his employer, a Cincinnati-based Pepsi-Cola bottler, in a scheme the FBI said began 17 years ago.

U.S. District Judge Susan J. Dlott accepted the plea after asking him a series of questions, including whether he was pleading guilty because he is, “in fact, guilty.”

“Yes, I am,” Hammes, 53, replied.

Judge Dlott said she would sentence him after reviewing results of a presentencing investigation that could take months. She warned him that she still could impose the maximum sentence of 20 years, even though his deal with the government called for less time. He said he understood.

FBI agents arrested Hammes in May at an inn in Damascus, Va., during the annual Trail Days festival. The inn’s operator and fellow hikers say he was known by the trail name Bismarck, an affable, bushy-bearded hiker who often appeared in photos and online posts with other hikers along the more than 2,000-mile trail stretching from Georgia to Maine.

An assistant U.S. attorney, Emily Glatfelter, told the judge that Hammes agreed to pay $7.68 million in restitution, with $6.68 million going to his former employer and $1 million to its insurer. She said authorities have already seized other money and property from Hammes, including more than $11,000 in cash and gift cards totaling $3,600 he had when he was arrested and $70,000 more in cash found in a Fort Wayne, Ind., storage unit.

She said he also has agreed to file tax returns from several years when the embezzlement was going on. The prosecutor said Hammes paid more than $2 million in estimated taxes to the Internal Revenue Service, but didn’t file returns every year.

Hammes’ attorney, Zenaida Lockard, an assistant federal public defender, declined to comment after the hearing.

Hammes was called to Cincinnati by his bosses in February 2009 about the missing millions, questioned by the FBI, then disappeared.

Hammes, a Milwaukee native, was the Lexington-based controller for the southern division of G&J Pepsi-Cola Bottlers Inc. The FBI said Hammes created a sham account that played off the name of a G&J vendor, wrote checks to it then moved the deposits into his own accounts.