Man with alleged links to Daufuskie Island’s Melrose Resort arrested in $65M fraud case

A man with alleged ties to Daufuskie Island’s bankrupt Melrose Resort has been arrested and accused of defrauding investors out of as much as $65 million.

Jacob Keith Cooper, owner of the Total Wealth Management investment firm, was arrested last month on 18 felony charges in his home state of Utah and is currently sitting in a San Diego jail awaiting a preliminary hearing set for Wednesday.

His alleged crimes include conspiracy, fraud, making false statements in connection with securities sales, and theft from an elderly or dependent adult. His bail is $1.5 million, according to documents from the San Diego District Attorney’s office.

Total Wealth Management affiliates Douglas Shoemaker and Nathan McNamee have also been charged with similar offenses.

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

Some of that money may have ultimately flowed to the Melrose Resort and its owner J.T. Bramlette and the Pelorus Group, SEC investigators allege.

Pelorus Group officials did not respond to requests for comment for this story. A spokesman for the SEC said the agency cannot comment on ongoing cases or investigations. Tanya Sierra, spokeswoman for the San Diego County District Attorney’s Office, declined to comment beyond saying Cooper was arraigned last Wednesday and a trial date is expected to be determined later this month.

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.”

But court documents lay a trail of breadcrumbs that appear to lead from Total Wealth Management to the owners of the shuttered Daufuskie Island resort, who filed for Chapter 11 protection in March and stalled an impending foreclosure sale.

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.

Hartman is described in court documents as a Bramlette business partner and operating partner in the Daufuskie Island venture.

Court documents allege PPCN received over $24 million from Total Wealth Management investors who were promised 12.5 percent annual returns.

“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,” an according SEC documents.

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

Hartman, Cooper and other Total Wealth Management officers are facing a class action lawsuit from investors in California.

Attorney Maria Severson, who represents the investors, said last week that the defendants in the suit “are very, very cavalier” with other people’s money.

“A lot of the (investors) are retirees with no earning capacity and their money is just gone,” she said. “This is an economic crime, but it has had a very personal impact on the victims. They’ve lost sleep; they’re depressed; they don’t know what to do.”

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

This story was originally published May 1, 2017 at 3:08 PM with the headline "Man with alleged links to Daufuskie Island’s Melrose Resort arrested in $65M fraud case."