SC Resort Scam Kingpin Pleads Guilty To Tax And Wire Fraud In Charleston

A Utah developer who engineered a South Carolina real estate deal that left a remote coastal vacation spot in physical and financial ruin pleaded guilty to federal wire and tax fraud charges on Aug. 30.

James T. "J.T." Bramlette, 42, of Salt Lake City will be sentenced later, said acting U.S. Attorney Rhett DeHart.

The Salt Lake City man has been described as the ringleader of a real estate firm that bought the struggling Melrose Resort on Daufuskie Island near Hilton Head about a decade ago.

Accessible only by boat and occupying a prime spot on Calibogue Sound, the nearly 700-acre property began to take shape in the 1980s. It eventually included a luxury inn, cottages, a Jack Nicklaus-designed golf course, tennis courts, an equestrian center and home sites.

But the concept never took off with homebuyers and vacationers, partly because of its isolated location. The company that owned it in 2009 filed for bankruptcy. The Bramlette-led Pelorus Group bought it two years later for $13 million, backed by $17.5 million from a lender in the Netherlands.

"This loan was a short-term bridge loan with high interest rates," according to DeHart's office. "Bramlette did not put any of his own money into the purchase. Bramlette thought he could resale the resort soon after the sale, but his attempts to refinance or sell the resort failed repeatedly throughout the case."

He and his associates went on to raise at least another $10 million by pitching high-yield promissory notes to investors, mostly in the western U.S., who were told their money would be used to renovate the shuttered South Carolina property and buy more land. They never followed through with those assurances.

By 2014, the loan from the Dutch financier was in arrears. Efforts to refinance or sell Melrose failed.

And while they lost their ownership stakes by mid-2015, Bramlette and his partners continued to raise funds for the deal without disclosing they had been forced out by creditors, according to court filings.

It's believed that some of the money they brought paid down some of the mortgage, but Bramlette squandered at least $1.5 million on personal expenses, such as a Range Rover, country club dues and college bills, according to prosecutors.

He also was accused of fabricating a receipt showing that Melrose had wired $502,759 to Beaufort County in 2016 to pay property taxes and avoid a foreclosure sale while working for the resort as its manager.

In addition, Bramlette collected but failed to pay about $1 million in payroll taxes to the Internal Revenue Service, the government said.

"Bramlette lived a lavish lifestyle, and he spent money on himself even when he failed to pay employees, vendors and subcontractors," DeHart told U.S. District Court Judge Richard Gergel at a hearing Monday in downtown Charleston. "The accountant at his company urged Bramlette to draw a salary and not use investor money for personal use. Bramlette ignored this advice and failed to report this income to the IRS or even file income tax returns.

He pleaded not guilty in April 2019 and was released on bail. While awaiting trial in Utah, Bramlette continued to have run-ins with the law. For example, he failed to show up for a mandatory drug test earlier this year and was described as being "argumentative" and uncooperative with his probation officers, according to court filings.

In April, Bramlette was charged with simple assault and arrested. He's been behind bars ever since.

Bramlette was transferred from Utah to the Charleston County jail on Aug. 17 and he was scheduled to plead guilty in the Melrose fraud case last week. At the start of the hearing, he asked through his public defender for more time to consult with his lawyer. Gergel allowed the extension.

Bramlette faces up to 25 years in prison and $260,000 in fines for the two federal fraud charges.

His plea narrows the number of defendants in the Melrose case to one. Anthony Mark "Tony" Hartman, who helped Bramlette raise money, recently asked Gergel for more time to explore his legal options.

A third Bramlette associate, Travis Kozlowski, pleaded guilty to his role in the scam in October 2019. Gergel sentenced him to time served on July 16 based partly on his extensive cooperation with federal investigators.

Melrose Resort has never reopened and is in a state of decay. The Dutch lender that financed the original purchase a decade ago now controls the property. It's been trying to sell it for an undisclosed amount.