Former Daufuskie Island resort owner sentenced to 5 years in prison on fraud charges
The former owner of Melrose Resort on Daufuskie Island will serve more than five years in federal prison after pleading guilty to wire fraud and tax fraud.
James Thomas “J.T.” Bramlette, 42, of Salt Lake City, was sentenced to 63 months in prison followed by three years of court-ordered supervision by U.S. District Judge Richard Gergel, according to a news release from the Department of Justice. There is no parole in the federal system.
Bramlette and his business partners raised over $10 million from investors to develop Melrose Resort, knowing the resort was in dire financial condition and subject to foreclosure by the original lender. Instead of being used to develop the resort, the funds were used to pay the original lender not to foreclose, pay previous investors, and to pay employees, utilities and taxes. Bramlette also used at least $1.8 million from investors for personal use and to live a lavish lifestyle.
“Instead of being truthful about the continued financial problems at Melrose Resort, Bramlette defrauded investors and misled others who had interests in the property,” said Susan Ferensic, special agent in charge of the FBI Columbia Field Office said in the news release.
A 19-page indictment against Bramlette says he used more investors’ funds to make mortgage payments on his Utah residence and pay rent on his mistress’ apartment, as well as pay for a Range Rover, country club dues and his daughter’s college tuition.
The wire fraud charge is related to more than $500,000 in past due property taxes owed to Beaufort County in September 2016. In order to prevent the resort from being sold at a tax sale, Bramlette created a fake wire receipt saying Melrose Resort had wired the money to the Beaufort County Treasurer’s Office.
The tax fraud charge stems from Bramlette collecting payroll taxes from his employees but failing to turn over the approximately $1 million to the IRS.
Melrose Resort and the Bloody Point Golf Club, which were originally developed in the late 1980s and early ‘90s and merged around 1996, once were a luxurious oceanfront getaway. Amenities included a Jack Nicklaus signature golf course with views of the Calibogue Sound and Hilton Head, an inn, a conference center, swimming pool, equestrian center, tennis courts and beach cottages.
The property first declared bankruptcy in 2009.
Bramlette’s 19-page indictment details the longtime financial struggles of the resort, which was still in bankruptcy when he purchased it between 2011 and 2013. Approximately $17.5 million toward the purchase of four parcels, renamed as Melrose on the Beach, came from a Dutch lender. In or around 2013, Anthony Mark “Tony” Hartman became part-owner.
When Bramlette purchased the property, he told The Island Packet, “We’re going to revitalize this entire project.” He talked about developing an outdoor amphitheater and establishing a market where people could buy necessities without leaving the island.
Instead, the property and its inn fell into disrepair.
In May 2015, Bramlette and Hartmann defaulted on a $700,000 loan from a group of Utah attorneys but did not disclose to investors that they had lost ownership, the indictment stated. The men continued to raise money in the name of the resort.
Bankruptcy was declared a second time in 2017.
According to papers filed in District Court late last year, the case against Hartman was continued to give him time to complete a pretrial diversion program. He faced charges of conspiracy and wire fraud related to Melrose Resort.
A third business partner, Travis Kozlowski, pleaded guilty to wire fraud in 2021 and was sentenced to time served.
A plan for Whitestone Holdings to purchase the vacant Melrose Resort was delayed this summer over issues related to the ownership of the dock on the island that is accessible only by boat.
