CINCINNATI – James T. Hammes, 54, formerly of Lexington, Kentucky, was sentenced in U.S. District Court today to 96 months in prison. Hammes pleaded guilty in October 2015 to one count of wire fraud and 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.
Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio and Angela L. Byers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Field Division, announced the sentence handed down today by U.S. District 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, following a tip from a hiker who had seen the defendant’s story on television.
“Hammes embezzled a lot of money over a long period of time,” Acting U.S. Attorney Glassman said. “As the district court recognized, his scheme was sophisticated; he abused the trust that his employer had placed in him; and sheer greed motivated him. Hammes followed up his crime by coldly abandoning his family without explanation or warning and running from the law for six years under someone else's name. But no one can run from justice forever, and today his lies were punished. Hammes more than earned every minute of the term of imprisonment that the district court imposed today.”
Acting U.S. Attorney Glassman commended the cooperative investigation by the FBI Cincinnati Division, with assistance from FBI- Richmond Division, FBI- Indianapolis Division, Internal Revenue Service – Criminal Investigation, and the U.S. Marshal’s Service, as well as Deputy Criminal Chief Emily N. Glatfelter and Criminal Chief Kenneth L. Parker, who are prosecuting the case.