In March 2015, Hayden Krumm sat on his couch watching a rerun of American Greed. The episode featured James T. Hammes, an accountant who stole $8.7 million from his employer and disappeared six years earlier. Krumm recognized him. He’d hiked with that face and photographed it. But on the Appalachian Trail, Hammes was known as “Bismarck.”
That moment of recognition drives Episode 120 of Oh My Fraud. It’s a story about an 11-year embezzlement scheme and a six-year run from the FBI. The case offers a lesson for accounting teams: Hammes didn’t defeat a sophisticated control system. As controller of G&J Pepsi-Cola Bottlers’ southern division, he effectively was the control system.
To understand how the fraud worked, we have to start with his job.
One controller held too much authority
Hammes studied accounting at Sangamon State University and worked for a Coca-Cola distributor before joining G&J in 1995. G&J is an independent, family-owned bottler and distributor, not PepsiCo itself.
As controller, Hammes oversaw the division’s accounting, internal controls, and accounts payable. He understood how to add a new vendor to the system, issue checks, and record expenses. He knew what reports reached headquarters. Nobody stood between Hammes and the checkbook because he was supposed to be the person protecting it.
In 1998, he turned that authority into a fraud scheme. G&J bought plastic-wrap materials from C.W. Zumbiel Company, a real supplier. Hammes opened a National City Bank account in Zumbiel’s name, but the signature card listed his own name and home address. He then created a second Zumbiel vendor code in G&J’s accounting system.
Hammes delivered unsupported check requests to accounts payable and instructed employees to use the unauthorized vendor record. There was no invoice or purchase order. He also told them not to mail the checks. They were to give the checks directly to him.
Getting the money out was only half the job. Hammes also had to bury the transactions in the books.
Hiding the evidence in plain sight
Hammes deposited G&J’s checks into the unauthorized Zumbiel account. He then wrote checks from that account to himself and deposited them into his personal Fifth Third Bank account, sometimes within a day or two. Some of the money later moved into investments.
To hide the theft, he charged the payments to a miscellaneous account, manipulated legitimate accounts to offset the balance, and altered monthly reports before headquarters received them. He initiated the payments, controlled their accounting, and influenced the reports used to review his work.
Between 2007 and February 2009, roughly $3.3 million passed through the unauthorized account. Investigators also traced at least $1.6 million into a TD Ameritrade account. The government ultimately valued the full scheme at $8,711,282.42.
The 2007–09 bear market wiped out most of Hammes’s investments, but he kept stealing. In January 2009, three transfers over 13 days totaled $590,000. Another $190,000 followed on February 18. In another odd twist, Hammes paid at least $2.7 million in estimated taxes with stolen money but didn’t file tax returns for several years.
By February 17, G&J discovered that $4.6 million in checks to Zumbiel had entered an unauthorized account since at least 2004. Zumbiel never received the money, and Hammes’s endorsement appeared on the checks. As FBI Special Agent Jonathan Jones said, “He got away with it for so long because he knew how to manipulate his subordinates and how not to raise accounting red flags.”
The FBI questioned Hammes on February 23. He denied involvement, requested an attorney, left G&J’s headquarters, and disappeared. The accounting investigation became a manhunt.
“Bismarck” hid in a community built on trust
A search of Hammes’s home suggested he’d planned his escape. Investigators found records of the fraudulent transactions, research about assuming another identity, and the birth and death certificates of an infant who’d died years earlier.
For the next six years, Hammes spent much of his time on the Appalachian Trail. As Bismarck, he grew a long beard, slept in a hammock, attended church, helped other hikers, and appeared in photos and trail journals. He even sent guidebook author David Miller corrections for future editions.
Hammes was visible because visibility made him look innocent. He told hikers his name was Brian Wofford but hid much of his real biography. Patrick Bradlow, a retired federal bank examiner and former fraud examiner, hiked with Hammes for weeks without becoming suspicious. “I took it hook, line and sinker,” Bradlow later said.
Then Krumm saw the American Greed rerun. He found his trail photos and contacted the show, the FBI, and Hammes’s daughter. Investigators now had recent pictures, a trail name, and a predictable destination: Trail Days in Damascus, Virginia. On May 16, 2015, agents arrested Hammes at the Montgomery Homestead Inn.
Once they caught the fugitive, attention returned to the failed controls.
The controls that could have stopped him
Hammes pleaded guilty in October 2015 to one count of wire fraud. Prosecutors dismissed the other 74 counts, and he agreed to nearly $7.7 million in restitution. In June 2016, a judge sentenced him to 96 months in federal prison and three years of supervised release. Federal records indicate Hammes was released in 2022.
For accounting teams, the practical lessons are straightforward:
- Separate incompatible duties. Vendor creation, payment approval, recording, reporting, and control review shouldn’t belong to one person.
- Review the vendor master file. Two records for the same supplier should trigger an investigation.
- Require supporting documents. No invoice or purchase order should mean no check, regardless of who requests it.
- Examine canceled checks. Confirm who received and endorsed a payment, not merely that the check cleared.
- Give employees a safe escalation path. Accounts payable staff need authority to pause unsupported requests from senior employees.
These controls don’t signal distrust. They protect the company, its employees, and the integrity of its accounting function.
Trust is not an internal control
Hammes’s scheme relied on a duplicate vendor record, unsupported checks, weak oversight, and employees who reasonably assumed the controller could be trusted. It ended when people finally examined the evidence that had been there all along.
Separate key duties. Review duplicate vendors. Require documentation. Look at endorsements. And most importantly, make sure the person administering a control isn’t the only person reviewing it.
Listen to the full Oh My Fraud episode for the complete story of the $8.7 million fraud and the Appalachian Trail fugitive known as Bismarck.