Court hears from Hilton Head embezzlement victims; judge delays Christy’s sentencing

Several victims of a former Hilton Head Island property manager’s multimillion-dollar embezzlement scheme were in court Monday in hopes of seeing him sentenced.

Those hopes were not to be realized.

Don Christy — former owner of Property Administrators Inc., who pleaded guilty in May 2016 to one count of federal wire fraud — didn’t provide District Judge David C. Norton with a complete financial disclosure, which presumably would shed light on how Christy might have used the estimated $3.5 million he stole from multiple property owners associations on the island.

“I think it just fell through the cracks,” Chrsity’s attorney, Mike Macloskie, said after the hearing, in reference to the paperwork. “And I have some responsibility there.”

Norton heard from victims and Christy’s friends and family but declined to sentence Christy until he was “satisfied” that he’d received the complete financial disclosure.

The hearing was disappointing for several Hilton Head property regime leaders, who have traveled to Charleston’s J. Waties Waring Judicial Center before and have left without closure. While they don’t want to see Christy serve a maximum sentence of 20 years, they say, they do think he deserves jail time.

Those regime leader did learn the fate of Lisa Arnold — Christy’s former accountant — who pleaded guilty to a felony charge during a separate hearing.

Arnold accepted a plea deal from Assistant U.S. Attorney Rhett DeHart, whom she helped build a case against her former boss. She received two years of probation after pleading guilty to one count of misprision of a felony — meaning that she knew a crime was being committed but failed to report it to authorities.

“She’s a victim of this like everyone else,” Arnold’s attorney, Rose Mary Parham, said after her client’s hearing. Arnold’s meticulous record-keeping was vital to the Federal Bureau of Investigation’s case, Parham told the court, adding that Christy had taken advantage of Arnold’s “shy” demeanor. As part of the deal, Arnold admitted to having knowledge of and concealing Christy’s wire fraud from 2007 to 2013.

In May 2016, DeHart described Christy’s yearslong scheme during which he made unauthorized transfers from clients’ accounts, charged them bogus fees and prepared false financial statements.

Former clients such as Ray Pfeiffer, Roger Jones and Bob Houlihan say Christy’s actions cost them thousands of dollars.

Pfeiffer, president of Inverness Village Homeowners Association, told the court his regime had lost $505,000. The regime’s insurance policy allowed it to recover $300,000, but the remaining amount — plus legal fees — is lost.

“We basically want to see justice done,” Pfeiffer said, “because we haven’t gotten any so far.”

Roger Jones, former president of the St. Andrew Common regime, said his association has recouped all but $10,000 of the $755,000 it lost. Still, he was frustrated that Christy wasn’t sentenced Monday. And while he heard Christy’s supporters tell Norton about the 73-year-old’s military service during Vietnam and reputation as a family man, Jones was unmoved.

“None of those people were doing business with (Christy),” Jones said. “So their ox wasn’t gored.”

Bob Houlihan, president of Turnberry’s association, said Christy didn’t take any money from his regime — but the association had to spend $20,000 in legal and associated fees to find that out.

When asked why he traveled to Charleston for Christy’s hearing, Houlihan said: “Because I had a level of trust, and I was offended by his actions, and I’m sticking with it.”

Houlihan paused.

“And I realize how lucky I was,” he said.

Regarding Christy’s financial disclosure, Macloskie said he had “no idea” what it might reveal.

The attorney expects his client to have that information to his probation officer in “two to three weeks.”

Then, Macloskie said, he and Christy will come back.

Christy faces a maximum of 20 years in prison, restitution payments and up to a $250,000 fine, DeHart said in May 2016.

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This story was originally published February 6, 2017 at 3:16 PM with the headline "Court hears from Hilton Head embezzlement victims; judge delays Christy’s sentencing."