Melrose Resort owners deny affiliation with man arrested in $65M fraud case

Lawyers representing the owners of the bankrupt Melrose Resort on Daufuskie Island have denied a direct connection between the resort and a Utah man arrested last month for allegedly bilking investors out of up to $65 million.

Jacob Keith Cooper, owner of the Total Wealth Management investment firm, was arrested on 18 fraud-related felony charges and is currently sitting in a San Diego jail awaiting a court hearing set for May 11.

Cooper’s name appears in court documents relating to a U.S. Securities and Exchange Commission investigation into The Pelorus Group and J.T. Bramlette, who owns the Melrose Resort.

“Mr. Bramlette and The Pelorus Group are not affiliated with Total Wealth Management and Jacob Cooper,” according to a statement issued earlier this week by attorney John Tang. “Total Wealth Management and Mr. Cooper are not investors in the Melrose Resort.”

Cooper, 40, has been accused by SEC investigators of “misappropriat(ing) millions of dollars in investor funds ... through a Ponzi-like scheme,” court documents show.

While Tang’s statement — issued through a California-based public relations firm — denies affiliation between Cooper and Bramlette, court documents suggest some Total Wealth Management investor funds may have ultimately flowed to the Melrose Resort.

Documents from the SEC show that Cooper’s alleged connection to Bramlette is through Anthony Hartman, who runs a Colorado investment firm called Private Placement Capital Notes II LLC, or PPCN.

Tang’s statement acknowledges that “PPCN is an investor in the Melrose Resort.”

In court documents, SEC investigators allege that “according to Hartman, beginning in 2011, most of the PPCN investor money — over $22 million — was transferred to (Bramlette) and the Pelorus Group to invest in a resort located on Daufuskie Island.”

Those investors — “many of whom are retirees” in the San Diego area — have allegedly not seen any returns since 2014, court documents show.

Tang said in his statement, “As was explained to the SEC, the SEC’s allegation that PPCN invested $22 million in the project is wildly overstated.”

Tang did not respond to a series of follow up inquiries related to his statement, including a question regarding how much money PPCN has invested in the resort.

An SEC spokesman said earlier this week that the agency could not comment on the status of any possible ongoing investigations relating to the resort.

Bramlette has not been directly accused of a crime, and a statement that accompanied an October SEC court filing regarding the Pelorus Group’s role in any financial wrong-doing said the agency “is continuing its fact-finding investigation and, to date, has not concluded that anyone has violated the federal securities laws.”

Bramlette and the Pelorus Group were ordered by a California judge late last year to provide documents relating to investigations into whether investor funds from Total Wealth Management and PPCN were funneled to the resort. The SEC filed subpoenas for those documents in July.

Court documents filed last month show the resort’s owners have complied with the order and Tang’s statement said the company has “cooperated with the SEC in its investigation.”

The resort filed for Chapter 11 bankruptcy protection in March, stalling an impending foreclosure sale.

“The current insolvency proceedings are intended to provide protection while Mr. Bramlette and The Pelorus Group focus on seeking refinancing for this important project,” Tang said in his statement.

Bramlette and the Pelorus Group were sued last month by a former Melrose Resort employee, who claimed she was not paid for two months of work despite promises that she would be reimbursed. Resort officials have declined to comment on the suit.

Bramlette is personally listed as a defendant in at least four other Beaufort County civil lawsuits since 2013.

This story was originally published May 5, 2017 at 12:10 PM with the headline "Melrose Resort owners deny affiliation with man arrested in $65M fraud case."