Virginia innkeeper: Lexington fugitive, caught at hiking festival, was 'one of my favorite hikers'

Lexington fugitive James T. Hammes, accused of embezzling $8 million, was attending an annual hiking festival in the tiny town of Damascus, Va., when he was arrested Saturday by federal agents after six years on the run.

Susie Montgomery, who runs Montgomery Homestead Inn in Damascus, said Hammes was staying at her bed-and-breakfast for the town's annual Appalachian Trail Days festival when he was arrested.

Hammes, 53, had been a regular at the inn since about 2010, and he was known by the trail name "Bismarck," Montgomery said Tuesday.

Several men in uniform knocked on Montgomery's door Saturday morning, went to the room where Hammes was staying and led him away in handcuffs, she said.

"I was totally surprised," Montgomery said. "He was one of my favorite hiking people, very quiet and polite, and probably had been staying here about once a year since 2010."

Hammes allegedly embezzled more than $8.7 million from G&J Pepsi Cola Bottlers Inc. from 1998 toearly 2009, while he was living in Lexington, according to a 75-count federal indictment. Hammes worked as the controller at the company's division in Lexington.

The indictment was returned in May 2009 in Cincinnati, where the company is based. By then, Hammes had vanished. Federal authorities have been looking for him ever since.

He didn't turn up until last weekend in Damascus, a town of about 815 in the Blue Ridge Mountains of Washington County, Va.

The Appalachian Trail runs through Damascus, making it a favorite stopping point for people hiking the 2,200-mile route. Hiking and camping are a major part of the area's economy.

The three-day Trail Days festival is a major annual event, regularly drawing 10,000 or so hikers, campers and outdoors enthusiasts to Damascus.

Indications are that Hammes quietly attended the festival for about the past five years, said Washington County Sheriff Fred Newman, whose office assisted federal agents in arresting Hammes.

Newman said Tuesday that he didn't know where Hammes was living between his periodic visits to Damascus.

Newman said agents contacted him Friday night, saying they thought Hammes might be in Damascus for Trail Days. On Saturday morning, they traced Hammes to Montgomery Homestead Inn.

The FBI has not said how it found Hammes or how it traced him to Damascus.

Hammes was indicted by a federal grand jury on 75 charges: 38 counts of wire fraud and 37 counts of money laundering. G&J Pepsi-Cola Bottlers Inc., a private company, is a manufacturer and distributor of Pepsi products.

G&J attorney Aaron Herzig said the company has been working with the FBI since the case began, and leaders hope some of the money might be returned.

"We're certainly glad that Mr. Hammes has been apprehended, and we're eager to let the justice system move forward," he said. "Our goal is to get out of the way and let the justice system do its job. We're sure the U.S. attorney will handle it, and we certainly hope to recover as much (money as) we can."

When Hammes checked into the B&B last Thursday, he used the name Bismarck, as he usually did when attending Trail Days, Montgomery said.

"When people come here for Trail Days, many of the hikers have these trail names, something like Poison Ivy or Snakebite," she said. "I always called him Bismarck."

Montgomery said she doesn't watch much television, and she hadn't seen any of the crime shows — American Greed and America's Most Wanted — that had featured Hammes' case over the years.

Since learning about the case, she has Googled Hammes' name and has seen old pictures of him, which she said look nothing like the man she knew.

"He has this really big beard now," she said. "I don't even know if I would have recognized him even if I had seen the shows."

Hammes used the inn repeatedly, Montgomery said.

"I don't go deep into people's histories when they're here, but he was a very nice man, a very thoughtful person, and very kind."

Montgomery said she attended Hammes' arraignment Monday in federal court in Abingdon, Va. Federal officials say he will be returned to Ohio to face the charges against him.

""I have known this man ... as one of my favorite hikers who ever came by here," Montgomery said. "We get a really calm, quiet clientele here, just really normal people, and I know that Bismarck was really well liked."

This story was originally published May 19, 2015 at 9:58 AM with the headline "Virginia innkeeper: Lexington fugitive, caught at hiking festival, was 'one of my favorite hikers'."