- Associated Press - Monday, May 13, 2013

RICHMOND — When Jonnie R. Williams believed he had discovered a way to make tobacco less harmful, the Virginia car salesman-turned-entrepreneur tried to sell his method to anyone who would listen.

Persistent phone calls to the nation’s top cigarette makers often started with the colorful venture capitalist, once dubbed a “super salesman” by a local newspaper, dropping names and promising the world.

“He knew anybody and everybody and they were all endorsing his idea,” said Chris Coggins, who ran the research and development department at Lorillard Tobacco Co. in the mid-1990s. “He very much is a hobnobber, that’s his raison d’être, if you like. … He was a salesman like you wouldn’t believe.”

Two decades later, revelations of Mr. Williams‘ lavish gifts and his company’s generous political donations are at the center of a growing scandal dogging the state’s two top Republicans — Gov. Bob McDonnell and Attorney General Kenneth T. Cuccinelli II.

The FBI is looking into Mr. Williams‘ relationship with Mr. McDonnell and his wife, each of whom promoted Mr. Williams‘ company’s latest health care breakthrough — an anti-inflammatory supplement — around the same time he paid $15,000 for the catering at their daughter’s wedding. Mr. Cuccinelli also has come under scrutiny for failing to report that he vacationed at Mr. Williams‘ homes and held stock in the company, Star Scientific Inc.

Meanwhile, Star Scientific Inc. is facing a federal securities probe and three shareholder lawsuits, alleging trumped up claims for its newest supplement, Anatabloc, which boasts Hall of Fame golfer Fred Couples as an ambassador.

Mr. Williams and company officials declined to be interviewed.

In more than 30 years in business, Mr. Williams, the son of a retired sailor-turned-Philip Morris employee has earned his share of scars and riches.

Early on, Mr. Williams established himself as a gifted car and real estate salesman in his hometown of Fredericksburg. By the time he was 24, he drove a gold Mercedes, owned two homes and had started a local optical shop, according to newspaper articles in the Free Lance-Star from the 1970s and 1980s.

His optical business collapsed after a fine for fitting contact lenses without a license, leaving tens of thousands of dollars in debts, according to a 1981 article. As the shop’s equipment was auctioned off, one person told the paper: “If the auctioneer really wanted to make some money, he’d auction off Jonnie’s address and phone number.”

He invested in other medical businesses, including Spectra Pharmaceutical Services Inc., a failed Massachusetts company that touted an ointment to possibly cure eye diseases. The Securities and Exchange Commission accused Mr. Williams of using research with false claims to promote Spectra’s stock.

Mr. Williams, without admitting guilt, paid back the alleged ill-gotten profits, plus interest, totaling $295,000.
The three shareholder lawsuits make similar allegations against Star Scientific, saying the company made false or misleading statements regarding clinical trials of its Anatabloc supplements.

“They promoted the product by creating the impression that Johns Hopkins University and the medical facility there had endorsed it,” said Thomas Shapiro, a Boston attorney for one of the shareholders.

Still Mr. Williams, 57, has had successes, including investments in the maker of laser vision-correction systems that eventually became part of Abbott Laboratories Inc. He has been involved in startup bio-tech companies for more than a decade and owns numerous properties, including a six-bedroom house outside Richmond valued at $2.2 million.

Mr. Cuccinelli and some of his staff stayed at the home in 2010 when they were transitioning into office. According to property records, he also owns two homes at Smith Mountain Lake — one valued at around $2.3 million — that played hosted to both Mr. McDonnell and Mr. Cuccinelli.

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