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Man sentenced to 63 months over Melrose Resort development

Ross Norton //August 8, 2022//

Man sentenced to 63 months over Melrose Resort development

Ross Norton //August 8, 2022//

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A Utah man has been sentenced to more than five years in federal prison for the part prosecutors say he played in a fraud scheme involving Daufuskie Island Resort.

James Thomas Bramlette, 42, of Salt Lake City, Utah, was sentenced after pleading guilty to wire and tax fraud, according to a news release from the U.S. Attorney’s Office. U.S. District Judge Richard M. Gergel sentenced Bramlette to 63 months in federal prison, to be followed by a three-year term of court-ordered supervision. There is no parole in the federal system.

In evidence presented to the court, the U.S. Attorney’s Office said Bramlette and others raised more than $10 million from investors to develop Melrose Resort on Daufuskie Island, knowing the resort was in “dire financial condition” and subject to foreclosure by the original lender, the news release said. 

Bramlette and what the news release called his “co-conspirators” repeatedly told investors their funds were being used to develop the resort when the funds were actually used to pay the original lender not to foreclose, pay previous investors, and to pay employees, utilities and taxes at the resort, the release stated. Bramlette also used at least $1.8 million from investors for personal use and to live a “lavish lifestyle.”

“Mr. Bramlette’s prison sentence reflects the seriousness of his offense and the United States Attorney’s Office’s dedication to deterring fraud,” U.S. Attorney Adair F. Boroughs said in the release.  “This office will continue to prosecute those who cheat their fellow citizens and steal federal tax dollars.”

According to the U.S. Attorney’s Office, in September 2016 Melrose Resort owed more than $500,000 in past due property taxes. The Beaufort County Treasurer’s Office notified Bramlette that the resort would be auctioned at a tax sale if the property taxes were not paid, the release said, and in order to prevent the resort from being sold at the tax sale, Bramlette created a fake wire receipt that falsely stated that Melrose Resort had wired money to the Beaufort County Treasurer’s Office to pay the property taxes.

“Instead of being truthful about the continued financial problems at Melrose Resort, Bramlette defrauded investors and misled others who had interests in the property,” Susan Ferensic, special agent in charge of the FBI Columbia field office, said in the release. “With this sentence, he will pay the consequences in prison and will no longer be able to continue his lavish lifestyle at the expense of those who put their trust in him.”

Regarding the tax fraud charge, Bramlette was required to collect and pay federal payroll taxes from the wages of all employees at Melrose Resort. Bramlette collected payroll taxes from the employees, but he failed to turn over those taxes to the IRS, the release said.  In total, Bramlette failed to turn over to the IRS approximately $1 million in payroll taxes.

“Employment tax evasion results in the loss of tax revenue to the United States government,” said the news release, quoting Donald “Trey” Eakins, IRS special agent in charge, Charlotte field office. "Failure to pay over withheld taxes is a serious offense. Corporate executives have a responsibility to withhold income taxes for their employees and then remit those taxes to the IRS."

Assistant U.S. Attorney Amy Bower prosecuted the case. Information about others accused in the case was not made available.

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