Former Real Estate Developer Sentenced to More Than 5 Years in Fraud Scheme Involving Daufuskie Island Resort | USAO-SC

CHARLESTON, SOUTH CAROLINA James Thomas Bramlette, 42, of Salt Lake City, Utah, was sentenced to more than five years in federal prisons after pleading guilty to wire and tax fraud.

Evidence presented to the Court showed that Bramlette and his co-conspirators raised over $10 million from investors to develop Melrose Resort on Daufuskie Island, knowing the resort was in dire financial condition and subject to foreclosure by the original lender. Bramlette and his co-conspirators repeatedly told investors their funds were being used to develop the resort when, in reality, the funds were used to pay the original lender not to foreclose, pay previous investors, and to pay employees, utilities, and taxes at the resort. Bramlette also used at least $1.8 million from investors for personal use and to live a lavish lifestyle.

“Mr. Bramlette’s prison sentence reflects the seriousness of his offense and the United States Attorney’s Office’s dedication to deterring fraud,” said US Attorney Adair F. Boroughs. “This office will continue to prosecute those who cheat their fellow citizens and steal federal tax dollars.”

Concerning the wire fraud charge, in September 2016 Melrose Resort owed more than $500,000 in past due property taxes. The Beaufort County Treasurer’s Office notified Bramlette that the resort would be auctioned at a tax sale if the property taxes were not paid. In order to prevent the resort from being sold at the tax sale, Bramlette created a fake wire receipt that falsely represented that Melrose Resort had wired money to the Beaufort County Treasurer’s Office to pay the property taxes.

“Instead of being truthful about the continued financial problems at Melrose Resort, Bramlette defrauded investors and misled others who had interests in the property,” said Susan Ferensic, Special Agent in Charge of the FBI Columbia Field Office. “With this sentence, he will pay the consequences in prison and will no longer be able to continue his lavish lifestyle at the expense of those who put their trust in him.”

As to tax fraud charge, Bramlette was required to collect and pay federal payroll taxes from the wages of all employees at Melrose Resort. Bramlette collected payroll taxes from the employees, but he failed to turn over these taxes to the IRS. In total, Bramlette failed to turn over to the IRS approximately $1 million in payroll taxes.

“Employment tax evasion results in the loss of tax revenue to the United States Government.” stated Donald “Trey” Eakins, Internal Revenue Service (IRS) Special Agent in Charge, Charlotte Field Office. “Failure to pay over withheld taxes is a serious offense. Corporate executives have a responsibility to withhold income taxes for their employees and then remit those taxes to the IRS. The IRS Criminal Investigation will vigorously pursue anyone who collects these taxes and uses the funds for their own personal gain.”

United States District Judge Richard M. Gergel sentenced Bramlette to 63 months in federal prison, to be followed by a three-year term of court-ordered supervision. There is no parole in the federal system.

The case was investigated by the FBI and the IRS. Assistant US Attorney Amy Bower prosecuted the case.

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