|U.S. Attorney’s OfficeOctober 23, 2015|
CINCINNATI—James T. Hammes, 53, formerly of Lexington, Kentucky, pleaded guilty in U.S. District Court to one count of wire fraud and has agreed to pay nearly $7.7 million in restitution, specifically, approximately $6.7 million to G & J Pepsi-Cola Bottlers, Inc. and $1 million to Cincinnati Insurance Company.
Carter M. Stewart, United States Attorney for the Southern District of Ohio and Angela L Byers, Federal Bureau of Investigation (FBI) Special Agent in Charge—Cincinnati Division, announced the plea entered into today before Judge Susan J. Dlott.
According to court documents, from about 1998 through February 2009, Hammes embezzled more than $8.7 million from his employer, G & J Pepsi-Cola Bottlers, Inc., a large, privately held manufacturer and distributor of Pepsi products that is headquartered in Cincinnati.
Hammes served as a controller for the company, and was responsible for all financial accounting and internal controls for his division, including supervising accounts payable to vendors for services provided to the company’s division.
The defendant set up phantom vendor accounts and manipulated monthly accounting reports, using a miscellaneous account to charge off fraudulent checks and then manipulating legitimate accounts to offset the amounts carried in the miscellaneous account.
The stolen money that Hammes invested and traded generated IRS 1099 forms. Hammes voluntarily made estimated tax payments to the IRS totaling at least $2.7 million using the funds that he stole from his employer. Despite making the estimated tax payments, he failed to file tax returns for multiple tax years.
Hammes was questioned about the issuance of possible fraudulent checks in February 2009, at which time he fled and spent the majority of six years as a fugitive hiking the Appalachian Trail and living under an alias, which belonged to a real person. Federal criminal charges were filed against Hammes and he was arrested in Virginia in May 2015.
Hammes faces a potential maximum sentence of 20 years in prison.
U.S. Attorney Stewart commended the cooperative investigation led by the FBI Cincinnati Division, with assistance from FBI- Richmond Division, FBI- Indianapolis Division, Internal Revenue Service—Criminal Investigations, and the U.S. Marshal’s Service, as well as Assistant United States Attorney Emily N. Glatfelter and Criminal Chief Kenneth L. Parker, who are prosecuting the case.
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