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The Honolulu Advertiser
Posted on: Friday, May 15, 2009

Ponzi scammer dies in drive off cliff before Hawaii sentencing


By Peter Boylan and Will Hoover
Advertiser Staff Writers

Hawaii news photo - The Honolulu Advertiser

James W. Lull

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A former Kaua'i mortgage broker who admitted to defrauding more than 50 people out of $30 million drove his truck off a cliff into a ravine in Washington state, killing himself yesterday, the day he was due in federal court in Honolulu for sentencing, according to law enforcement officials.

The body of James W. Lull, 60, was pulled from the wreckage of a white, 2007 Ford Explorer Sport Trac at the bottom of a ravine at about 1:30 p.m. yesterday, according to Sgt. Ed McAvoy of the Washington State Patrol. That was half an hour before Lull was to appear in federal court in Honolulu where he was likely to be sentenced to jail time.

Lull's attorney, Peter Wolff, a federal public defender, said he spoke by phone with Lull on Wednesday. Lull, who was in Seattle, indicated that he would be flying to Hawai'i in time for yesterday's 2 p.m. hearing.

Instead, his body was being pulled from the ravine.

"Where Mr. Lull left the roadway it was about a 200-foot drop," McAvoy said. Officers did not find a suicide note from the wreckage of the truck, McAvoy said.

Lull declared bankruptcy in 2006 and moved to the Seattle area, where he was living when he was indicted in Hawai'i on charges of operating a Ponzi scheme that defrauded investors of tens of millions of dollars.

The wreckage of Lull's white pickup truck was reported to the Washington State Patrol at 1:15 p.m. by a trucker driving over the Fred Redmon Bridge on Interstate 82, about eight miles north of Yakima, Wash.

Lull's failure to show in court in Honolulu prompted the issuance of a bench warrant and spurred a manhunt by U.S. Marshals and the Federal Bureau of Investigation.

Both agencies received word yesterday afternoon that Lull was dead.

SHOWED 'DECEPTION'

After crossing the Fred Redmon Bridge, Lull apparently drove into an open field and then through a barbed wire fence and onto property maintained by the U.S. Army Yakima Training Center. Lull then apparently drove his truck off a 200-foot cliff into the ravine where it tumbled and flipped until coming to rest on its wheels.

Lull, who maintained a residence in Kirkland, Wash., was under federal investigation for possible new crimes in Washington state and showed "deception" when asked in a March lie detector test if he had hidden assets from his victims, according to federal court papers.

Lull, a former Kaua'i mortgage broker, pled guilty last September to defrauding dozens of victims out of $30 million.

U.S. District Judge Susan Oki Mollway was originally scheduled to sentence Lull April 14 but ordered a month's delay after hearing from some of Lull's victims and saying she wanted more information about the extent of Lull's cooperation in recovering their money.

The rescheduled hearing in Mollway's court yesterday ended after less than 25 minutes, when Lull's status changed from defendant to fugitive.

News of Lull's death was not reported until after the hearing.

Wolff, Lull's attorney, told Mollway that he had no idea where his client might be.

"I thought he would have been here," he said.

Mollway, who seemed momentarily startled by what she referred to as Lull's "uncontested absence," said, "I don't know what to do since I don't know what's going on here."

In the courtroom, Wolff suggested that Lull's absence might be due to something innocent, such as a flight delay.

However, prosecuting attorney Clare Connors, assistant U.S. Attorney, asked Mollway to issue a bench warrant for Lull's arrest, which Mollway did. Mollway also revoked Lull's $100,000 bail.

Mollway said as part of Lull's sentencing she had also expected to consider recent new information relating to Lull's case contained in a pretrial services memo, which is sealed.

"All that is overtaken by the fact that Mr. Lull has not appeared," she said. "We can't go forth without the defendant present."

Around half a dozen victims of Lull's scheme had come to testify about how Lull had swindled them out of thousands — and in some cases — millions of dollars. They spoke to reporters after the hearing and before learning of Lull's death.

COUPLE SHOCKED

Two victims, Donnie and Mardi Maione, of Wailua, Kaua'i, said they were stunned when Lull failed to appear. Mardi Maione said she was convinced that Lull was simply delayed and that he would show up.

"I was thinking, 'No way — he's going to come in at the last minute. Wait!' "

When it dawned on her that Lull might have simply skipped out after she and her husband spent $600 to fly to O'ahu and spend the night to tell their story at the hearing, it was as if Lull had ripped them off one more time.

"I can't believe this," said Mardi Maione, outside the courtroom following the hearing, still unaware of Lull's death. "This isn't what we expected. This isn't what we wanted."

Maione said over a 10-year period Lull defrauded them out of their life savings of $75,000. The couple never saw a return on any of that money. How could it have happened? Lull became a family friend, whose kids were playmates with their own children.

"We had a relationship," she said. "He sat at our kitchen table. He lived on our street."

"And now he's gone," added Donnie Maione, a building contractor and retired Kaua'i firefighter. "We trusted him, and he burned us."

Asked where they thought Lull might be, the couple said in unison, "Wherever the money is."