Ex-owner of Daufuskie’s Melrose Resort pleads guilty to fraud totaling millions of dollars
The former owner of a failed resort on Daufuskie Island pleaded guilty to federal charges Monday of defrauding Beaufort County, the IRS and investors of millions of dollars.
James Thomas “J.T.” Bramlette, 42, of Salt Lake City, pleaded guilty to wire fraud and tax fraud in federal court in Charleston, according to the U.S. Attorney’s office in Charleston.
Prosecutors said Bramlette committed wire fraud against Beaufort County in the amount of $500,000 in unpaid taxes, failed to pay $1 million in payroll taxes to the IRS, and used at least $1.8 million of investor money for personal use without disclosing any of it to the IRS.
Bramlette, a real estate developer, owned the Melrose Resort on Daufuskie Island. The property was originally a luxurious resort developed in the late 1980s with a Jack Nicklaus Signature golf course and views of the Calibogue Sound and Hilton Head Island.
However, the resort struggled financially for years on the island that’s accessible only by boat. The U.S. Attorney’s office said Bramlette came into the picture when he borrowed $17.5 million to purchase the resort out of bankruptcy in 2011. At the time, he told the Island Packet newspaper he bought it for $13 million.
“Bramlette thought he could resale the resort soon after the sale, but his attempts to refinance or sell the resort failed repeatedly throughout the case,” according to the U.S. Attorney’s office press release.
The resort lost money every month and fell into disrepair, leading to an eventual foreclosure judgment in 2014 for $27 million. The indictments against Bramlette said he lost all ownership that year but never told that to investors, whom he raised $10 million from and issued promissory notes.
Wire fraud
The Utah real estate developer remained on as manager of the resort. Part of his duties included paying property taxes. In September 2016, the resort owed $502,759 to the Beaufort County Treasurer’s Office.
As a result, the treasurer’s office put the property up for sale for unpaid taxes. Bramlette, according to prosecutors, created a fake wire receipt indicating the resort had wired the $502,759 it owed to the county so the property was removed from the tax sale list.
In reality, the Melrose Resort had only $121.07 in its bank account at the time.
Tax fraud
The U.S. Attorney’s office said Bramlette collected $1 million in payroll taxes from Melrose Resort employees but never turned that money over to the IRS.
The agency also said he used $1.8 million of investor money for personal use and did not disclose it to the IRS.
According to the indictments, Bramlette used the funds for items like “the mortgage payments on his residence in Utah, the car payments for his Range Rover, his daughter’s college tuition, his country club dues, the rent for his girlfriend’s apartment, and other living expenses.”
He also used the funds instead of paying staff, according to the court documents.
Federal prosecutors indicted Bramlette and a co-defendant, Anthony Mark Hartman, in April 2019. He’s had his bond revoked twice. Once was as recently as April 2021 when he was charged with attempted murder in Sandy, Utah, court documents show.
Bramlette originally pleaded not guilty in the federal case against him.
While the golf course and Island House Inn remain closed, other parts of the resort property have reopened. Privately owned cottages have been renovated, and the former Melrose Beach Club is now home to the Bell’s at the Beach restaurant overlooking the beach and two resurfaced pools.
