Lexington embezzlement fugitive, known along the Appalachian Trail, to plead guilty

CINCINNATI — A federal court filing shows that a plea deal has been reached in the case of a former accountant arrested along the Appalachian Trail six years after he was accused of embezzling $8.7 million from his Cincinnati-based employer.

James Hammes, 53, of Lexington had pleaded not guilty and was scheduled for trial next week on wire fraud and money-laundering charges from 2009. A notice of a plea agreement was filed Thursday in U.S. District Court, and his trial has been canceled.

No details of the agreement, which is subject to court approval, were released. Hammes' attorney didn't return calls seeking comment.

The FBI said Hammes fled soon after being confronted about money missing from his employer, a Pepsi-Cola bottler. Authorities haven't said what they think happened to the money and haven't commented on his whereabouts the past six years.

Agents arrested him May 16 in tiny Damascus, Va., during the annual Trail Days festival. People there say Hammes had become a regular on the Georgia-to-Maine hiking trail, where he was known as a genial, bushy-bearded man known as Bismarck.

Trail guidebook writer David Miller said Bismarck had surprisingly high visibility on the popular trail. He showed up in photos in hikers' journals and on social media. Miller said he sent Hammes notes for his guidebook on information about whether a hotel was giving hikers special rates.

Hikers often adopt trail names to be known by during their trail adventures. Hammes is a Milwaukee native who was living in Kentucky.

Hammes, a licensed pilot, had credited successful investment in a software company for extra money that paid for scuba diving trips to the Caribbean in the years before his indictment, according to former in-laws, who were interviewed for an episode of the CNBC series American Greed. A fellow hiker has been credited with recognizing Bismarck from the show, leading to Hammes' eventual arrest.

Hammes was the Lexington-based controller for the southern division of G&J Pepsi-Cola bottlers. Called by company officials to Cincinnati headquarters in February 2009, he was confronted about missing money that investigators say topped $8.7 million.

FBI Special Agent Pamela Matson stated in an affidavit that G&J funds were deposited into an unauthorized account that played off the name of a vendor. Investigators found that Hammes opened the account in 1998, she said. He repeatedly wrote checks to the sham vendor account, then moved the deposits into his own bank account, according to Matson.

Accounts have placed Hammes in Maine and northern Indiana when he wasn't on the trail during his time on the lam, but the FBI wouldn't discuss its own findings. His wife in Lexington divorced him years ago.

This story was originally published October 3, 2015 at 12:00 AM.