Beaufort County lawyer allegedly takes $100,000 from client's account

Stephen Edward Carter, 61, of Port Royal, who operated the Carter Law Firm on Hilton Head Island, was charged Wednesday with breach of trust fraudulent intent.

Carter was in charge of an escrow account in a deal to purchase half ownership in the Palmetto Bay Marina on Hilton Head Island.

Hilton Head resident Jason Bullock had given Carter $250,000 in earnest money in February 2014 on an offer to buy 50 percent of the marina from Carter's client Douglas W. James for about $4.6 million. James is a member of Cross Island Associates LLC, which owns the marina.

Carter disbursed $150,000 as authorized, but was supposed to keep $100,000 in the account until the deal closed. The deal didn't close, and in October 2014, Bullock sued James and Cross Island Associates to get the earnest money back. The suit said the deal was ready to close, but James could not be found to complete the transaction.

Carter filed a counterclaim, saying the closing's failure was Bullock's fault.

On Dec. 2, 2014, Beaufort County Master in Equity Marvin Dukes ordered the $100,000 that was supposed to be left in the escrow account to be put in a trust account with the county clerk of court.

Carter did not comply. He also did not appear at a contempt of court hearing March 2, 2015.

That same day, Dukes reported Carter to the S.C. Office of Disciplinary Counsel.

Carter had previously admitted to the counsel in May 2014 that he had failed to properly represent previous clients in 2009 and 2011 lawsuits, including not notifying them of court dates and being unprepared for trial, the opinion said.

He told the counsel he suffered from depression and would seek help. He was granted deferred discipline then on the condition he seek treatment and fulfill other conditions. But he had not complied with the agreement, and with the new admission of the missing money, his bar license was suspended March 3, 2015.

During later court proceedings in the civil suit, Carter asked for and received more time to pay the money back, but he never did, other than about $7,000. He was also ordered to pay interest and legal fees.

In September, Bullock reported Carter to the Sheriff's Office.

Carter was disbarred in November by the state Supreme Court and ordered to pay the money, with interest and legal costs by the end of 2015. But that didn't happen.

The court's disbarment opinion said Carter admitted to using the money to purchase a vehicle, pay alimony arrears, and to pay for office and personal expenses.

After being charged with breach of trust Wednesday, he was released from the county jail Thursday on a $50,000 personal-recognizance bond.

The lawsuit between Bullock and James continues, with a trial date set in Beaufort County court on Jan. 25.

An attempt to reach James and his new lawyer, Mark Hardee of Columbia, were unsuccessful Friday.

An attempt to contact Bullock was also unsuccessful. His lawyer, Greg Alford of Hilton Head, declined to comment.

Follow city editor Don McLoud at twitter.com/IPBG_Don.

This story was originally published January 8, 2016 at 8:40 AM with the headline "Beaufort County lawyer allegedly takes $100,000 from client's account."