“McNair Law Firm intentionally withheld material information about the September [2015] Sales from the two mortgage holders to conceal numerous assets in violation of federal and state law”

Lane Jefferies [McNair’s Lawyer] knew about and, more importantly, was concerned about Gabby’s wire. This proves he knew about the illicit funds and was an active participant in the conspiracy to defraud the banks, the Mitchells and Rabon & Rabon, Inc .

Myrtle Beach residents Karon and Kyle Mitchell filed a motion this past week in the Fifteenth Judicial Court to void the fraudulent sale of $777,000 worth of downtown Myrtle Beach real estate they previously owned.

The lawsuit claiming fraud reads: There is no issue of material fact in dispute as to whether the sale of September 3, 2015 was procured by fraud by all of the parties involved and is void and/or voidable under South Carolina law.

The lawsuit states:

Sarah Ginsburg orchestrated a scheme in which $777,000.00 was paid for the two properties owned by Rabon & Rabon, Inc., with $235,000.00 of that money being paid “under the table” to Jack Rabon and others. There are actually two instances of fraud in the transaction.

The most obvious fraud lies in the specific representations of Mr. Jeffries [Lane Jeffries – McNair Law Firm Lawyer at that time] and Mr. Rabon to Plaintiffs and numerous courts that only $542,000.00 was being paid for the two properties. These allegations pertinent to the fraud directly against Plaintiffs [hereinafter the “Direct Fraud”] are verified by Michelle Cohen, (the real estate agent involved in the sale) Jack Rabon (the President and Vice President of the Corporation and primary benefactor of the illicit funds), and the Biderman Defendants (the purchasers of the properties).

The second instance of fraud was only recently uncovered in discovery and deals with fraud perpetrated by the lawyers, at the direction of the client, against the creditors of the Corporation. McNair Law Firm intentionally withheld material information about the September Sales from the two mortgage holders to conceal numerous assets in violation of federal and state law [hereinafter the “Asset Concealment Fraud”].

Jacob Biderman is a citizen of Austria who operates a jewish educational institution in Myrtle Beach through Friends of LBS, LLC. The original written contract with Friends of LBS, LLC was for the sale of Sea Palms #3 and the Brick House for the total price of $542,000.00.

However, the actual deal was for Biderman to pay $777,000.00 for both properties, with the additional $235,000.00 to be paid to Jack Rabon and others (exclusively) via a wire transfer and cash. This payment arrangement cut owners Kyle and Karon Mitchell out of their portion of $235,000 of the proceeds of the entire sale. The lawsuit claims that not only was McNair Law firm aware of the fraud, but a lawyer and perhaps lawyers of the firm actually participated in that fraud.

The downtown Myrtle Beach properties named inthe fraudulent schemes include:

All that certain piece, parcel or lot of land situate, lying and being in the City of Myrtle Beach, Dogwood Neck Township, Horry County, South Carolina, shown and designated as Lot Three (3) of Block Nineteen (19) according to a map or plat of Hotel Section of Myrtle Beach, as made in June and July if 1926, under the supervision of Stanley H. Wright, Engineer, which map or plat is recorded in the Clerk of Court’s Office for Horry County in Plat Book 1 at page 84, reference to which is hereby made as a part and parcel of this description. TMS # 181-11-03-005/ PIN # 444-01-04-0044 [hereinafter the “Brick House”]

All those certain pieces, parcels or lots of land, with improvements thereon, situate, lying and being in the City of Myrtle Beach, Dogwood Neck Township, Horry County, South Carolina, shown and designated as Lot Numbers Seventeen (17) and Eighteen (18) of Block Nineteen (19), as shown on a map of the Hotel Section of Myrtle Beach made in June and July 1926, under the supervision of Stanley H. Wright, Engineer, and recorded in the office of the RMC for Horry County, South Carolina, in Plat Book 1 at page 84, reference to which is craved as forming a part of these presents.
TMS # 181-11-03-002 / PIN # 444-01-04-0051

All that certain piece, parcel or lot of land, with improvements thereon, situate, lying and being in the City of Myrtle Beach, Dogwood Neck Township, Horry County, South Carolina, shown and designated as Lot Number Two (2) of Block Nineteen (19), as shown on a map of the Hotel Section of Myrtle Beach made in June and July 1926, under the supervision of Stanley H. Wright, Engineer, and recorded in the office of the RMC for Horry County, South Carolina, in Plat Book 1 at page 84, reference to which is craved as forming a part of these presents.
TMS # 181-11-03-004 / PIN # 444-01-04-0043[collectively hereinafter “Sea Palms #3”]

Motion to Void Sale – Final Combined Judge Counsel Copy by David L Hucks on Scribd

*In January 2015, Jack Rabon executed a contract with Shai David for the sale of several Rabon & Rabon, Inc. properties for $1 million. Rabon and David had a separate, unwritten agreement that David would pay Rabon an additional $735,000.00 “off the record” for the properties. Lane Jefferies [McNair Law Firm Lawyer] was present at most of the meetings while these negotiations took place and actually discussed the illicit payments in a text message exchange with Rabon on January 10, 2015.

Officially, Sea Palms #1 was sold to David for $242,000.00 in February 2015 and Sea Palms #2 was sold for $175,000.00 in March 2015. These sales took place without approval from the Probate Court or notice to the minority shareholders. The Sea Palms #2 sale resulted in cash of $128,289.57 belonging to the Corporation that was deposited directly into the McNair Law Firm Trust account. Once Plaintiffs discovered the sales, they filed suit against Rabon.

In their Answer, the McNair Firm misrepresented to the court and creditors that the money obtained from the sale of Sea Palms #2 was used “to preserve assets of the Corporation.” In fact, McNair actually held more than $120,000.00 in Rabon & Rabon, Inc. funds in its trust account at the time it made this representation. Ultimately, only $48,460.30 the $128,289.57 was spent towards expenses for the Corporation.

Michelle Cohen was the realtor involved in the deal and the primary representative of the Biderman Defendants. Ms. Cohen confirmed the conspiracy to pay the additional illicit funds via affidavit.

Jacob Biderman, Atid Properties, LLC, Friends of LBS, LLC and Sarah Ginsberg admitted in their joint answer that the additional $235,000.00 was paid for the two properties outside of the closing.

Therefore, the payment of the illicit and undisclosed $235,000.00 in funds is admitted by all of the parties directly involved. There is a dispute as to who received $50,000.00 of the illicit funds, but all parties agree that $185,000.00 went to Jack Rabon through Daisy Ridge, LLC and cash.

On August 20, 2015, Lane Jefferies made a motion in the Horry County Probate Court to sell two properties owned by Rabon & Rabon, Inc. In the motion and in direct representations to Plaintiffs, Lane Jefferies represented that Friends of LBS, LLC agreed to pay $145,000.00 to Rabon & Rabon, Inc. for the Brick House and $397,000.00 for Sea Palms #3, for a total of $542,000.00. These representations were false. Jack Rabon and Lane Jeffries knew the aforementioned representations were false at the time they were made to the Mitchells and the Probate Court.

Both the corporate resolution drafted by Jefferies and the Consent Motion signed by the Probate Court represented that only $542,000.00 was being paid for the property as opposed to the actual agreed upon price of $777,000.00. Due to the impending loss of the property to BB&T, and the false understanding that no better offer existed, the Mitchells signed the Resolution and the Consent Order on August 25, 2015.

Upon the executed Resolution and Consent Order, the final stages of the conspiracy were set into motion. Biderman formed a new LLC, Atid Properties, LLC, for the sole purpose of taking title to Sea Palms #3 and the Brick House. Jack and Nicole Rabon formed a new company, Daisy
Ridge, LLC, for the sole purpose of receiving the illicit funds via wire from Biderman. The formation of Daisy Ridge, LLC was suggested by Lane Jefferies who referred the Rabons to Robert Frenz, an attorney in Columbia, for its formation. Jefferies actually provided the fraudulent address for Rabon to use as the office for Daisy Ridge, LLC via text message.

After the LLCs were formed, the last piece of the conspiracy involved the money. The money from Biderman would be transferred through three wire transfers.

The First Wire consisted of the legitimate funds under the contracts and transferred to the Emery Law Firm Trust Account from a newly created Bank of America bank account in the name of Atid Properties, LLC. This total of $527,627.77 arrived no later than September 2, 2015.

The Second Wire in the amount of $100,000.00 was wired from Biderman’s account in Austria to a bank account in Chile in the name of Gabby Yosef, Michelle Cohen’s brother.

These funds were withdrawn in cash to be handed to Jack Rabon.

The Third Wire was in the amount of $135,000.00 and was transferred to a PNC Bank Account in the name of Daisy Ridge, LLC. Due to the anti-money laundering regulations in the U.S., the Third Wire had to go through a clearinghouse in New York and it did not arrive by September 3, 2015.

This caused a ripple in the plan, resulting in Jack Rabon demanding that additional security be paid for the illicit funds in the amount of $135,000.00. Biderman wrote three checks for $45,000.00 each that were given to Lane Jefferies as security for the illicit funds.

Lane Jefferies signed a receipt for these three checks on September 3, 2015. Jefferies asserted that these checks were for “security for the brick house,” but this is false. All funds necessary for the closing of both properties arrived in the trust account of the Emery Law Firm no later than September 2, 2018, the day before the three checks were handed to Lane Jefferies.

On September 2, 2015, Lane Jefferies engaged in a series of texts with Jack and Nicole Rabon. These texts are the proverbial “smoking gun” with regard to proving Lane Jefferies’ knowing and intentional involvement in the conspiracy.

These texts demonstrate his knowledge of both wires involving the illicit monies from Biderman. The single text that conclusively proves Lane Jefferies’ direct involvement reads as follows: “Damn. Jack, can you get Michelle on the phone and see if gabby got his wire?”

The only “gabby” involved was Gabby Yosef, the brother of Michelle Cohen. The only way Gabby Yosef was involved with any party in general, or with the real estate transaction on September 3, 2015 in particular, was through the wire of $100,000.00 to his bank account in Chile.

Lane Jefferies knew about and, more importantly, was concerned about Gabby’s wire. This proves he knew about the illicit funds and was an active participant in the conspiracy to defraud the banks, the Mitchells and Rabon & Rabon, Inc.

*EDITOR’S NOTE – The statements in this legal complaint concerning Shai David were taken as a sworn affidavit by Jack Rabon. Mr. David disputes those statements as factually untrue and not accurate.

“For the past 67 days of divided county government, it has cost us $96.4 million to operate the county based on its current 2019 total budget.“

In his Tuesday testimony, County Administrator Chris Eldridge stated that he only notified former Chairman Mark Lazarus, Councilman Tyler Servant, Councilman Gary Loftus, and Councilman Harold Worley that he was calling in the State Law Enforcement Division (SLED) to investigate a concern he had. His concern was based on hearing 4 minutes of a 90 minute recording. Eldridge believed incoming Chairman Johnny Gardner attempted to extort MBREDC C.E.O. Sandy Davis.

The rest of County Council had no knowledge of Eldridge’s decision to call SLED in.

Sandy Davis, MBREDC C.E.O. and her assistant recorded incoming Chairman Johnny Gardner without notifying him. While Eldridge claimed he heard what could have been extortion, the SLED report ultimately concluded there was no hint of extortion on the audio. The SLED report also stated that Eldridge “had malicious intentions.“

Eldridge told County Council he called in SLED on the morning of December 20th, because a Fitsnews article was in the public domain that morning and he felt he needed to act without consulting full council.

Eldridge told council he called SLED in at 9:55 a.m. on December 20th.

Just after Eldridge’s call, the article headline changed and included SLED’s involvement. The weight of that narrative, which included SLED, gave substance to the issue causing all local mainstream media to run with the article before the afternoon’s inauguration.

Only five people in total knew SLED was called in. How did FITSNEWS know so quickly when no other major media outlets were made aware?

MyrtleBeachSC news spoke with Councilmen Worley and Servant. Each stated they would never leak such an investigation. Neither had spoken to Eldridge on the morning of the 20th about this and neither knew the timing of when SLED was called in that day.

Councilman Loftus responded to us by email, “Not me“.

Former Chairman Mark Lazarus texted us, “Not me nor anyone affiliated with me. This will be my last correspondence with you regarding this matter.” Sent from my iPhone Mark Lazarus

We also reached out to SLED who told us it was not their protocol to make random bloggers, like Fitsnews, singularly aware of investigations they conducted.

Fitsnews actually reached out to SLED to confirm a “tip” they had been given that an active investigation was requested. They were made aware of the investigation by a “source”. SLED did not reach out to Fitsnews.

That left Chris Eldridge. Mr. Eldridge responded only after he realized that all councilmen, including the former Chairman had replied. Said Eldridge, “No, as previously stated, and no further comments.” For the record, Mr. Eldridge has never responded to any of our previous questions.

Of the five who knew, three had no motive for giving the county and its leadership such a black eye. Councilmen Worley, Servant, and Loftus have shown deep concern over the unrest this affair created in our community.

If sour grapes could be defined as a motive, Mr. Lazarus would certainly have one. However, all who have spoken publicly, including Eldridge, state Mr. Lazarus made peace with the Gardner election. He is choosing to move forward.

Chris Eldridge knew the exact moment when he called SLED in. Listening to his testimony this past week and following his actions of the past sixty days, a clear pattern of Eldridge’s unwillingness to accept the people’s choice for county chairman becomes apparent.

Meanwhile, Mr. Gardner, under intense media scrutiny, has shown a steady and patient hand dealing with an issue portraying him as guilty until proven innocent. His resolve in the situation shows he is just the man for this transitional moment in Horry County history.

Success = Effort/Resistance

The bureaucratic, Horry County top administrative swamp is clearly resistant to the kind of change Gardner represents. It was obvious at Tuesday’s packed council meeting, the public is squarely behind Gardner, however, and not the bureaucrats.

The Cost Of Divided Government

After Tuesday’s vote, several councilmen have expressed concerns over the cost of firing Chris Eldridge, despite the 6 to 6 vote of no confidence from those same employers.

Since the SLED leak of December 20th, Horry County government has been at an administrative stand still. Last Tuesday’s vote exposed just how divided county government is. Chairman Gardner expressed he could not work with Chris Eldridge. As Chairman, Gardner has every right to pick his top administrative team. He deserves to have people he can trust.

Does divided government have a cost?

With a total budget of $525,494,705, it costs Horry County $1,439,771 per day to operate. For the past 67 days of divided local government, it has cost us $96.4 million in total to operate the county based on its current budget.

Questions remain as to whether one county bureaucrat was able to subvert the will of 83,000 county voters. If Worley, Servant, Loftus, and Lazarus are to be believed, that is just the case.

Despite surviving the 6 to 6 “no confidence” vote of last Tuesday, several of Eldridge’s council supporters privately admit there is no future for him in local government. Chris Eldridge simply over-played his hand entering into a realm that should be reserved to voters only.

As for his part, we sent the following email to Will Folks of Fitsnews.

________________________________________________________

Will,
We have now heard from all five named by Eldridge, including Chris Eldridge.  Your first article (originally posted 12.19.18),  while salacious, lacked the muscle and the political discrediting of a SLED investigation.

Your second article written on Dec. 20th prior to Gardner’s inauguration, naming SLED’s involvement caused a chain of events that lead to all other media outlets running with the “extortion” narrative. 

  
After hearing from all 5 involved,  it is clear one local government person of interest used your media, coupled with SLED, as a weapon to smear an innocent man who won the popular vote from 80,000 Horry County residents just weeks prior.   

The SLED report is clear.  There was no extortion, (EVER),  as the MBREDC C.E.O. herself stated. Not sure if you heard the audio prior to publication, but that certainly should have been a minimum bar considering what was at stake. 

I will be reaching out to Tom at SLED.  We know, from experience,  it is NOT protocol for SLED to randomly call selective news outlets and inform them of an investigation.  When they do such,  it is always through a press release to every news outlet.

In my discussions with all involved, it has become clear who the credible and non credible voices are among the 5 (including Eldridge) that knew Eldridge requested SLED’s involvement on 9:55 a.m. on December 20th.

The timing here on December 20th  leaves very limited options as to whom your source might be.  I am sure you are aware of this.

I consider this a serious matter.  The rights of voters to decide their elected officials are paramount. 
 Our article needs sunlight so as to see that nothing like this EVER happens in Horry County again.
Had SLED been called in and the matter kept confidential,  that would be a different story.

I believe both your blog site and SLED were used as weapons in this matter.

It is now left to our council and our community to heal this mess.  AND WE WILL!

Sincerely,
David Hucks

MyrtleBeachSC News

UPDATE 3/6/19: Last week, state Representative Russell Fry and his colleagues on the sub-committee refused to even give H.3456 a hearing vote.

Fry, the Chief Whip of the GOP caucus, has told Horry residents that he supports the bill but won’t vote for it because he doesn’t like the sponsor of the bill.

Essentially he’s saying he won’t restore South Carolinians Second Amendment rights because of a playground tiff.

Fry’s committee meets again tomorrow in the Statehouse at 9am.

Call him at (803) 212-6781 and tell him to put H.3456 back on the agenda and pass it once and for all.

Representative Jonathan Hill introduced a “Constitutional Carry” bill in the SC House. “Constitutional Carry” though is a loosely defined term that even the most knowledgeable gun rights advocates cannot agree upon. Thus it is not enough to state the intent of the bill; the real question is: What will it do?

Permit-less Carry

H. 3456 [previously 3700], as introduced, will allow permit-less carry by introducing an “exception that swallows the rule” of SC Code Ann. 16-23-20. Subsection (A)(17) specifically exempts from the prohibition on carrying a handgun “a person who is not prohibited from possessing firearms under state law.” This new exception would effectively limit the prohibition in 16-23-20 to only those persons, such as felons, who cannot legally possess firearms under SC law.

Open Carry

In excepting all lawful firearm owners from the prohibition in 16-23-20, the bill will remove restrictions on carrying a handgun openly. While the law will not specifically state that a handgun can be carried openly, there will be no prohibition on doing so. Under the traditions of the English Common Law, that which is not prohibited is allowed. Thus open carry will become available to the people of SC.

To further clarify the intent of the bill, the definition of “concealable weapon” is altered by removing language requiring a firearm carried pursuant to a CWP to be concealed.

The bill is being discussed in subcommittee tomorrow. Both Hill and NMB Representative William Bailey (a co-sponsor on the bill) reached out to us. Hill sent the following:

I need a quick favor TODAY to help me pass Constitutional Carry.

You see, I’ve been working to get this bill (H.3456) through the legislative process. In spite of opposition and stall tactics, a committee hearing has finally been scheduled for 9AM on Thursday!

Now, could you call three committee members for me? Tell them:

1. PASS H.3456 immediately, with no more delays!
    
2. This isn’t going away until they do!

If you want, you can also tell them that:

• Free citizens don’t need permission to exercise their 2A rights.
   
• South Carolina should allow open carry as an option.
  New York-style gun restrictions have no place here!
   
• The permit mandate prevents more than half of legal gun owners from being allowed to carry their own weapon for self defense!

These are the committee members that I need you to call:

1. Rep. Russell Fry
   803-212-6781
    
2. Rep. Weston Newton
   803-212-6810
    
3. Rep. Peter McCoy
   803-734-3120

“The tie vote leaves no wiggle room for Mr. Eldridge. He has lost more than the confidence of county council. Mr. Eldridge has lost the confidence of Horry County residents.”

In front of a packed county auditorium, Coastal Councilmen Gary Loftus, Tyler Servant, Harold Worley, and Bill Howard voted against firing County Administrator Chris Eldridge. The packed auditorium, however, clearly wanted County Administrator Eldridge fired.

Coastal cities, especially the city of Myrtle Beach, are still smarting from the defeat of former Horry County Council Chairman Mark Lazarus last June. Many have been unwilling to accept his loss.

Meanwhile, current County Chairman Gardner now has the support of county voters west of the intracoastal waterway by a margin of more than four to one. Gardner won last June’s primary largely because of county voters who supported him three to one back then.

There are 323,000 Horry County residents. The city of Myrtle Beach stands at just over 28,000. The City of Myrtle Beach has the most residents among the three coastal cities. For decades, the City of Myrtle Beach ran the county. Residents voted last June to take the county back from coastal focused leader Mark Lazarus.

The arrogance County Administrator Eldridge demonstrated while being questioned by county-elected councilmen was palpable. Coastal-elected councilmen largely remained silent. Eldridge’s defiance, however, mirrored the very attitudes demonstrated previously by Lazarus himself.

The Arrogance Of Eldridge

The 6 to 6 tie vote, however, leaves Eldridge in a precarious position. A 50% approval rating from his employers is certainly not a vote of confidence.

Chairman Gardner stated honestly that he is unable to work with Eldridge. Gardner’s own humility aside, he is the elected County Council Chairman. Mr. Eldridge’s future horizons in Horry County appear as limited as his preferred boss, Mr. Lazarus.

Lazarus’ Legislation De-Funded By Coastal Cities

On the same night Mr. Eldridge’s fate was being determined, the city of Surfside Beach voted (7 – 0) to terminate funding to the very hospitality tax Lazarus extended and planned to use to fund I-73.

The 6 to 6 County Council tie vote leaves no wiggle room for Mr. Eldridge. He has lost much more than the confidence of county council. Mr. Eldridge has lost the confidence of Horry County residents.

Why? As this news outlet reported, it was Jim Wiles, Lazarus Campaign Manager who leaked the infamous memo to Will Folks of Fitsnews. Eldridge states clearly in his testimony yesterday, he only consulted Lazarus, Loftus, and Worley before calling in SLED.

Lazarus is the residue of the Coastal – County divide in which Chris Eldridge clearly took a side.

Surfside Beach held a special city council meeting last night to consider adopting the same city ordinances approved by Myrtle Beach and North Myrtle Beach.

Surfside Beach City Council voted unanimously 7 to 0 to keep all hospitality funds inside the city. This vote terminates the city’s payments to Horry County’s 1.5% hospitality tax.

This vote also means an additional $1.3 million to the city without raising any taxes on local residents.

With this vote, three coastal cities have now approved first reading to cut off funding for former Horry County Council Chairman Mark Lazarus’ signature legislation.

The hospitality tax brought in over $41 million to Horry County. Former Chairman Mark Lazarus had designs on using the tax to fund building Highway 22 to the Horry County line. Such a move would have created a real estate boom for local housing and land developers, like Waccamaw Land and Timber. Lazarus works for that real estate group and has enjoyed a long history there.

On this same night, County Council voted on whether to fire Lazarus’ top ally County Administrator Chris Eldridge. That vote ended in a tie. Eldridge will keep his job for now.

Horry County School Board President Ken Richardson gave a press release at 9 a.m. this morning concerning a SLED investigation of questionable past behavior related to Horry County Schools. Communications between Robbie Ferris, First Floor CEO and President, the contractor selected to design the schools, and, Keith Powell , a school board attorney regarding First Floor’s proposal to HCS began four months before the HCS board was notified.

HCS Public Statement-03!05!19 by David L Hucks on Scribd

After S.C. Attorney General Alan Wilson received a complaint, HCS Superintendent Rick Maxey was contacted by a SLED agent in December 2015 about the selection of First Floor.

In the coming weeks, the district will be releasing emails between school board attorney Keith Powell and First Floor CEO Robbie Ferris that were later forwarded to SLED, in response to a Freedom of Information Act request from PAPR, an open records advocacy group.

A statement released at this morning’s press release was signed by Superintendent Maxey, board president Ken Richardson and facilities committee chair Neil James. The statement can be read just above.

The schools associated with these communications include Ten Oaks, Myrtle Beach and Socastee middle schools, St. James Intermediate School and Socastee Elementary School.

Statements from sources associated with the matter, told MyrtleBeachSC News that up to $50 million in question in regards to the agreements are part of the SLED investigation.

Horry County has called a special meeting tomorrow concerning human resource issues related to top administrative staff.

March 5th: 3:30 p.m.-Horry County Council Special Meeting, Horry County Government & Justice Center, 1301 Second Avenue, Council Chambers, Conway.

This event is open to the public for public input and residents are encouraged to attend.

“So as to set an example, not allowing county employees to ever use this ploy again in future campaigns of candidates, Horry County Council must deal directly with Eldridge and Carotti.”

A State Law Enforcement Division report released today by Jimmy A. Richardson, the Solicitor of the 15th Judicial Circuit, showed no evidence of extortion by current Horry County Council Chairman Gardner or his partner in regards to an audio that was recorded by MBREDC C.E.O. Sandy Davis. SLED briefed the solicitor on the report over the past week.

Davis said Eldridge and county attorney Arrigo Carotti were the only two who made her feel threatened in the ordeal. “She felt Eldridge wanted the report for malicious reasons,” the report said.

A memo sent out by Horry County Attorney Arrigo Carotti, at the demands of Horry County Administrator, Chris Eldridge, created problems for those two key county administrators legally with the return of today’s SLED report.

A secretly recorded meeting attended by Sandy Davis, MBREDC C.E.O., her associate Sherri Steele, Luke Barefoot, and incoming Chairman Johnny Gardner last December led County Attorney Arrigo Carotti to write a memo to council. Carotti’s memo claimed an attempt was made at extortion. His boss, Chris Eldridge, immediately called in SLED to investigate.

Chris Eldridge sits on the board of the Myrtle Beach Regional Economic Development Corporation (MBREDC).  At the time of the audio recording, so did former Horry County Chairman Mark Lazarus. Both equally held a position that allowed them to put pressure on Davis.

After the memo’s release, Davis informed the media, “A lot of it’s fabricated.”  However, using the memo and audio as leverage, Horry County Administrator (and MBREDC Board Member) Eldridge asked the South Carolina State Law Enforcement Division (SLED) to investigate his and Carotti’s claims of extortion. “President Davis believed the reason Administrator Eldridge wanted a copy was because he wanted to release the recording before County Chairman Gardner was sworn in as Horry County Chairman,” the report said. Carotti and Eldridge claimed Luke Barefoot, a business associate of current Horry County Council Chairman Gardner, worked to extort the MBREDC leader. 

County Councilman Al Allen told WPDE news that the timing of the investigation was fishy and that he and other council members still have not been briefed about why the investigation was ordered.

“Senior staff should have briefed us on this,” Allen said. “They have had more than one opportunity to do this, but why they chose not to, I still have not gotten an answer on that, and to this day, council has not been briefed on it. It was just very, very, I think, unprofessional and appears to have been planned in a timing to disrupt an incoming chairman and to possibly slow down the business of the county council– and it has done exactly that.“

Chairman Gardner told local Sun News, “What probably needs to happen is we need to get the report, talk to my council and see what’s next.” Gardner said he had not yet seen the report.

Davis says she never felt extorted or threatened by Barefoot or Gardner.  The returned SLED report exonerates Gardner entirely. Eldridge’s and Carotti’s actions in the matter are left unresolved and are now a matter that Horry County Council must address.

So as to set an example, not allowing county employees to use this ploy again in the future campaigns of other candidates, residents agree that Horry County Council must deal directly with Eldridge and Carotti.

County Attorney Carotti told council at a recent meeting that they would not need to fire him. He said that, if the council loses faith in him, he would quit. Councilman Worley encouraged him to do just that if the report came back with his and Eldridge’s participation in suspicion.

The cast of those involved included a former S.C. Highway Commissioner Mike Wooten, (who also sits on the Board of the MBREDC), Mark Lazarus (former Horry County Council Chairman), Will Folks (A Columbia Based Political Blogger), Luke Barefoot (A business manager for incoming Chairman Johnny Gardner), Sherri Steele (Director of Investor Relations for the MBREDC), Morgan Martin (A high-powered Horry County Attorney now hired by Sandy Davis), Horry County Councilman Gary Loftus (who also is a MBREDC Board member), and Sandy Davis (C.E.O. MBREDC)

TIMELINE OF EVENTS

While news of the drama first became public on December 20th,  the timeline of those events date back to the middle of November. For the record, December 20th was the date an article first ran in blogger Will Folks’ Fitsnews.  December 20th was also Garnder’s inauguration date.

In mid-November Sandy Davis began reaching out to Gardner business associate Luke Barefoot requesting a meeting with the incoming Chairman.  Davis felt the meeting was necessary as she expressed a desire to meet over what she believed were concerns Gardner may have held about the Horry County, “tax payer” funded organization.

Gardner had previously been critical of the ongoing, poor, past performance of the MBREDC, which is provided over $1 million annually by local taxpayers.  The organization has a history of turning over top management.  The organization also has a history of press releases announcing high profile businesses scheduled to bring new jobs into Horry County.  Oftentimes, those companies never materialize or they do come after being provided government assistance and assurances, only to then disappear in the middle of the night never creating the jobs promised.  (ONE RECENT EXAMPLE)

Gardner campaigned in 2018 that he would stop such wasteful spending.  He promised residents that he would make public safety and wise planning his highest priorities. 

_____________________________________

Nov. 20th: As reported by the Sun News, 
“MBREDC Board Member Mike Wooten sues Fitsnews”. Wooten filed suit in Georgetown County with the 15th Judicial Circuit on Nov. 20th. According to the filing, Wooten sued over four separate instances that he believed FITSNews libeled him in posts published on the site.  Fitsnews Publisher, Will Folks was made aware of the suit through the media. 

Folks informed MyrtleBeachSC news, however, that he had not been served as of November 23rd.  Wooten never responded to our inquiries.

Last month Folks informed our team that he was eventually served by Wooten.

EARLY DECEMBER ————————–

At Davis’ request, Luke Barefoot and incoming Chairman Gardner agree to meet with Davis and Sherri Steele, MBREDC Director of Investor Relations.  Davis and Steele discuss secretly recording the meeting without informing Gardner.  According to Carotti, that decision is based on “concerns” Davis held about potentially being extorted because of previous conversations she had with Barefoot in setting up the meeting.  Davis has since refuted allegations made by Carotti, stating “she never felt extorted”.  

Carotti’s memo reports that several other individuals became involved once Davis opened up about the meeting, including MBREDC Chairman Fred Richardson, MBREDC Treasurer Neyle Wilson and Chris Eldridge (Horry County Administrator and MBREDC Board member).

Dec. 5th Sandy Davis meets with Horry County Attorney Arrigo Carroti.  Davis tells Carotti about the secret recording Steele made of Luke Barefoot during their public meeting at the Bistro restaurant in Conway, S.C. 

According to a memo later emailed by Carotti, Davis claims that Barefoot stated an eminent negative article was coming from local writer Paul Gable and that payment to a local publicist and political operative Donald Smith would  head off that article. Carotti also claims Davis talked to Donald Godwin, owner of Southern Asphalt, who told her that they had done the same to him, and that he had paid, and that it didn’t matter because when you stop paying they’ll write bad stuff about you anyway.

GODWIN DENIES THOSE STATEMENTS MADE BY CAROTTI.  In an article published by Gable, Godwin states he has never spoken to Davis about Gable.  While not speaking specifically about each item in the memo, Davis tells the media that the memo is filled with fabrications. 

 Wednesday, Dec. 19, 2019: A meeting was attended by Chris Eldridge, Mark Lazarus, Gary Loftis, Sandy Davis, MBREDC Treasurer Neyle Wilson, Sherri Steele and Arrigo Carotti at the MBREDC office to listen to the Davis recording. 

ACCORDING TO THE CAROTTI MEMO: When Chris arrived, he, Gary, and Carotti went to the back, which was Sandy’s office, in which was a round table around which Neyle Wilson, Mark Lazarus, Chris Eldridge, Arrigo Carotti, and Gary Loftis sat around. Behind her desk was Sandy Davis, and seated in another part of the room was Sherri Steele.

After some brief remarks, Mark Lazarus began by saying that the $40,000 was discussed before the recorded meeting at the Bistro restaurant. And that the prior discussion was what concerned Sandy about the meeting leading to the recording. The $40,000 payment information is not on the recording itself per Carotti’s memo. That number was apparently told to Lazarus by either Davis or Steele, but Carotti’s email does not specify which of these two were having such conversations with outgoing Chairman Lazarus. 

Dec. 19th – Carotti sends an email to Horry County Council with the memo below attached. 

Fitsnews then runs a feature on Gardner’s inauguration day, December 20th – Horry County Government Rocked By Recording Of Alleged Extortion

Chris Eldridge then uses the memo to call in the S.C. South Carolina Law Enforcement Division to investigate the “Extortion Claims”.  All major, local media then pick up the Extortion narrative as run by Fitsnews.

Afterwards, Paul Gable,  Publisher of the Grand Strand Daily writes he has never spoken with Luke Barefoot or Sandy Davis about a negative article. Gable publishes that he never has nor does he now have intentions to write such an article.  Incoming Chairman Gardner denies the assertions made by Eldridge and Carotti.  Davis denies being “Extorted”.  Barefoot denies extorting anyone.

MEMO WRITTEN BY CAROTTI LABELED ATTORNEY-CLIENT PRIVILEGED

I started typing up this narrative on 12-14-18 as a result of events that have taken place since Dec. 5 as memory fades over time, and this debacle is broadening.
On Wed, Dec. 5, I met with Sandy in my office for our regular weekly meeting. She had nothing in terms of new projects or updates, but we did talk about Tim, as he wasn’t present and she reminded me that he was in NYC. I asked how he was doing, as I usually do when he is not present,
and she told me that he wasn’t working out and that she was going to let him go, unless he brings back something remarkable from NYC, which she did not anticipate happening.
We had talked about the annual meeting before, I believe, and Mark having addressed the group previously and that Sandy had tried to get up with Johnny Gardner to make arrangements for the upcoming meeting but had not heard back from him. Sandy said she contacted him again to discuss
whether he would address the group, or wanted Chris to do it this time, or a combination. She said that a meeting was scheduled for her to meet with him, but at the meeting it was both Johnny Gardner and Luke Barefoot. Luke did the talking and asked if it was OK for him to speak freely
in front of Sherri, who Sandy had brought along. Sandy said that Luke asked her who did public relations for the EDC. Sandy told him that EDC did their own. Then Luke told her that Paul Gable was getting ready to print an article against the EDC pointing out her lack of education specifically,
and that she could head that off, and any similar blogs in the future, by retaining Donald Smith to do the EDC’s public relations. Sandy told me proudly that she told him to tell Paul Gable to go ahead and print the article as she had a degree she could show everyone. She said that Luke also
inquired about how much authority she had to retain Donald Smith without going through the EDC Board, and that she could get those services for $30,000 or $40,000 (I forget which she mentioned).
Sandy scoffed at the idea of spending that much for PR work, and told Luke Barefoot that the limit of her authority was only $5,000. I told her, good for her, to stand up for herself as she did. She said that Luke Barefoot did all the talking, and Johnny Gardner just sat there listening. I asked her
if she had mentioned this to anyone else, and she said she had told Fred Richardson and Chris Eldridge. When I asked what their take on it was, she said Fred was very mad and said he was going to call Luke Barefoot and give him a piece of his mind. She said that Chris was upset as well. She said that she also had talked to Donald Godwin who told her that they had done the same to him, and that he had paid, and that it didn’t matter because when you stop paying they’ll write bad stuff about you anyway.
When I saw Chris, I mentioned the discussion I had with Sandy, and he said basically she had told him the same thing. He said he was going to meet Sandy later in the day, and would inquire more about it.
The next day, Thursday, Dec. 6, I saw Chris and asked him how it went. He said that remarkably, Sandy told him that there was a recording of the meeting, done by Sherri. Chris provided some information that I wasn’t aware of: that Sandy spoke with Luke Barefoot before the meeting; that
because of her discussion with Luke Barefoot, she became concerned about going alone to the meeting and decided to bring Sherri with her; that apparently she mentioned bringing Sherri along during her pre-meeting discussion with Luke Barefoot, and that’s when Luke Barefoot inquired
whether he could speak freely in front of her; that apparently, the meeting was for more than making arrangements for the upcoming annual meeting; that Sandy and Sherri discussed recording the meeting because of their concerns, and were figuring how to do it without the others noticing
it. Chris expressed his desire to obtain a copy of the recording, and Chris asked me to call Sandy to ask her for a copy. In the meantime, Scott Ritchie was called over so that he could assist us in getting a copy of the recording off of Sherri’s phone.
I called Sandy, according to the directory on my desk phone at 10:48 am on Dec. 6, to follow up with Chris’ request. She had to speak somewhat softly and explained that she was in Pawley’s Island for some meeting. When I relayed to her Chris’ request, she became anxious and said she would not provide it, that she would delete it rather than provide it, that she did not want to get anyone in trouble, and that this is not what she signed up for. I asked her to hold on while I got Chris, because he needed to listen to this. Chris was not in his office and did not answer his cell phone. But then he texted me that he was in the restroom (according to my cell phone, the text was at 10:50 am) and I responded that Sandy was on the phone and that I needed him. After a little while Chris came to my office, and I told him that Sandy did not want to give over the recording, and I asked Sandy to please repeat what she had told me. She basically said she did not want to do it. She said that’s what she gets for opening her mouth. I said not saying anything could get her in trouble also (said more so that she wouldn’t feel like she did something wrong by letting others know what had happened). I asked her what if what was done was in violation of the law somehow, she responded that she wasn’t going to press charges anyway. When told that this was a County/MBREDC issue, not hers personally, and that she had been asked by the Administrator to turn over the recording and that she was a County employee and would just be doing what the Administrator was requesting, she maintained firm that she would not turn it over, but would keep it (I think). She said it was not recorded on a County phone, and I told her that I didn’t that that really mattered. She said she was going to call Neyle about the situation, and I said that was a good idea if she felt that would help the situation.
Chris himself then reached out to Neyle and I believe got a text from him saying that he was in some kind of Board meeting. Chris called and spoke to Fred, who relayed that he was mad because he thinks they took advantage of Sandy and Sherri because they were women. I called Scott Ritchie who had been trying to reach me during this time, and told him to stand down.
The next thing that happened relating to this is a voicemail message a got from Neyle Wilson saying that he was returning my call. I called Chris but did not get him, and got a text from him right away that he was in a deer stand (not able to speak), so I texted him that Neyle had left me a
voicemail message saying that he was returning my call, but that I had not called him (according to my cell phone, the text was at 4:01 pm on Dec. 6). Chris forwarded to me a text he had sent to Neyle earlier asking him to call me. So, I called Neyle Wilson.
I relayed to Neyle everything Sandy told me and what Chris said she told him about what Luke Barefoot said about the upcoming Gable article and what was offered to head it off. Neyle listened, but then said that it appears that his interpretation of what Sandy told him happened was different
from our interpretation of what she told us. I thought that was an interesting choice of words, seeing how that observation assumes that everyone was told the same thing. But I used that terminology from that point forward. He said that Sandy said there was nothing to it, that basically
it was just said in passing. Luke Barefoot was involved because he had been associated with the old EDC, Partners. I told him that because there was a difference in interpretation that was all the more reason to have the recording as that was the best evidence of what actually was said. He
agreed. But he said that at any rate the recording is hard to hear because he believes they were in a restaurant or place like that when it happened. He said that Sandy had spoken with an attorney.
He said that she told him that she was told that what she was doing was obstruction of justice. I told him twice that I never said that, and would have no reason to. He said that she told him I said it made no difference that it was not recorded on a County phone. I told him that I had said I didn’t believe that mattered. I told him that Sandy also told me that Luke had asked her about the extent of her authority so that she could hire Donald Smith without having to go to the Board. Neyle said she did not tell him that. He said basically that she was concerned that Gardner and them had said negative things about the EDC, and was afraid that this would make matters worse, and that they would really be against her. He suggested that it was best just to leave the matter alone. I questioned
about possible recurrence. He saw my point. I suggested that maybe just let Chris listen to the recording as I believe Sandy previously had offered that. He suggested in return that he just listen to it, and only the part of the conversation dealing with the upcoming Gable article and what was
offered, and report to us his interpretation. I reiterated my belief that Chris has a right to hear it for himself. He seemed to agree. He said he believes there was in fact a “veiled threat” that was made.
He said he would speak with Sandy about it, and that in fact she was calling him at the moment.
When I relayed all of this to Chris later in the evening, he said the restaurant they went to was the Bistro. Also, he said that Sandy had told him that she was not aware that Sherri was actually going through with the recording until she inquired later and found out that she did.
On December 17, 2018, I received a request from Scott Bellamy to meet with me. With the help of Gina Livingston, a meeting for 2 p.m. was scheduled in my office. I thought Scott was coming to see me to follow up with me on the drowning cases. When in my office, Scott said he represented
Donald Smith, and that he had an email in which the Administrator said certain things about Donald Smith, and that Donald Smith had nothing to do with the meeting and anything that was said, that he couldn’t control what others may have said, and that he didn’t want Chris to say
anything more as that may affect his business. He said that the email said that Chris was going to brief County Council on Tuesday, and asked if there was any way Chris could hold off doing so.
He stated his belief that the EDC was separate from HCG, and only received funds from HCG, and that all this should be in the hands of the Board of EDC, and if they determined there was something to it, then County Council could become involved. I asked to see the email he was referring to and, after some reluctance, he handed it to me. It was an email that was sent from Sandy Davis to Jim Apple and Fred Richardson, forwarding this email from Chris to Neyle Wilson
and the string under it:
From: Eldridge, Chris
Sent: Wednesday, December 12, 2018 12:24 PM
To: Wilson, Neyle [email protected]
Cc: Sandy Davis [email protected]; Mark Lazarus [email protected]; Carotti,

Arrigo [email protected]; Gary M. Loftus [email protected]
Subject: Taped Recorded Barefoot-Gardner Conversation

We can discuss it at the board meeting tomorrow. Either way, I will talk
with my Council at Tuesday night’s meeting, too. The conversation points
that Sandy shared with Arrigo and I from her meeting with Luke Barefoot
and Johnny Gardner – payment to Donald Smith for a public relations
contract, complete with detailed questioning on what Sandy Davis could
approve herself without board approval – could be viewed as unethical and
possibly illegal. That Donald Smith worked Johnny Gardner’s campaign is
widely known. Asking for thousands of dollars to be funneled to him is very
concerning. An unwillingness to share the taped recording of the
conversation raises even more concerns – a taped recording, I may add,
that you, Sandy and Sherri acknowledge exists and has been downloaded
to a Dropbox file. Something of this nature can’t be “brushed under the
rug.” Doing so jeopardizes the credibility of the MBREDC and all it has
accomplished.
I’ve copied in Mark [Lazarus] and Gary [Loftus], since they are both board members and bosses of mine.
Scott Bellamy told me that he understands there was a recording. I told him that there appears to be more than one version of what took place, and that the best evidence of what took place would be the recording. He agreed whole heartedly that we all should sit down and listen to it.
Scott also told me that Sandy hired Morgan Martin to represent her and that he had spoken to Morgan. Morgan told him that Sandy told him there was nothing to it, and that the recording was made because Fred Richardson (he had difficulty with his name as well as Sandy’s, apparently not knowing them) was tending to his wife who was dying, and could not make the meeting himself, so told Sandy to take good notes.
Again, I reiterated that there appears to be more than one version of what took place, and that a review of the recording seemed to be the best approach, to which he agreed. I told him I would relay his client’s concerns to Chris. Scott told me that he would relay to Donald Smith that we met
and that it was a good meeting. We also talked about our days in law school, our families, our careers, and the practice of law today.
On the afternoon of Tuesday, December 18, 2018, I received a voicemail message from Scott Bellamy who indicated that he was traveling and that he was following up to see if I had spoken to Chris about what he and I talked about. I did not return his call.

A meeting was scheduled for Chris, Mark, Gary, and me to go to EDC to listen to this recording for Wednesday, Dec. 19, 2018. I arrived 5 minutes early, the next to arrive was Gary, then Mark.
Chris was running late. Mark went to the back. When Chris arrived, he, Gary, and I went to the back, which was Sandy’s office, in which was a round table around which Neyle, Mark, Chris, I, and Gary sat around. Behind her desk was Sandy, and seated in another part of the room was
Sherri.
After some brief remarks, Mark began by saying that the $40,000 was discussed before the meeting. And that the prior discussion was what concerned Sandy about the meeting leading to the recording. This was information he apparently was told. I was given the opportunity to explain my dismay with having been brought into this situation, as I was the attorney and shouldn’t have been.
I also explained that I have been told several different versions of what took place, and didn’t know what actually had taken place. There was some more discussion, but then the recording was played over a speaker that was placed in the middle of the round table. The recording was of good quality,
although there was a lot of background noise consistent with a restaurant.
I could hear Sandy’s voice and a gentlemen’s voice, who I assumed was Luke Barefoot. What I recall specifically was the gentleman saying that Donald Smith was in the shadows and could influence votes or was somehow in control behind the scenes. He also mentioned “the figure we
had discussed”, could be paid to Donald Smith for something having to do with the Beach Ball Classic, and that “would give you political cover”.
We were played only about 4 minutes of what I understand was an hour and a half long recording.
Although asked if we wanted to hear anything else, I deferred to the client.
While it was suggested that it might be best to leave well enough alone, and that the recording would be preserved in case anything came up later, I advised that I would not suggest that the 7 in the room decide that we were going to conceal the matter. I indicated that I could not be privy to
that, and that I had prepared this narrative, would be finishing it up when I got back to the office, and would be sending it to Chris and Mark, as I believed that I was responsible for advising my client of what all I have been told.
The issue came up of whether I wanted a copy of the recording and I responded that I would defer to my client in that regard. Chris said he wanted a copy. Mark suggested that a request be made, and if denied, then Council could be informed. So, we left it that Chris would make an official
written request for a copy of the recording. Sandy was strong in her unwillingness to provide a copy.
I have written this to the best of my recollection.
Arrigo

 

Despite protests from Mark Lazarus -former Horry County Council Chairman, Karen Riorden – Myrtle Beach Area Chamber C.E.O., and Tony Cox – SCDOT Highway Commissioner, Myrtle Beach City Council voted unanimously on a first reading to cease a 1.5% county hospitality tax payment on Tuesday, February 26th. The Hospitality Tax funds were allocated by Horry County at $25 million annually to fund future I-73. The contract with SCDOT is a 20 year minimum contract.

The town then passed an ordinance to keep those funds inside the city.

While City Manager, John Pedersen claimed the issue had nothing to do with I-73, Lazarus, Riorden, and Cox argued that the new ordinance would effectively kill I-73.

MyrtleBeachSC news learned from Surfside Beach Councilman Randle Stevens that Surfside Beach will also be discussing enacting a similar effort today with city staff. The measure could be brought up at Surfside Beach’s next City Council meeting.

We also learned from sources in North Myrtle Beach that a special meeting will be called for that same purpose there as well.

Sixty percent of the funds that support the $41 million annual tax are collected in these three coastal cities. Unless Horry County intends on passing a new 1% tax county-wide, residents of the towns of Loris, Conway, Aynor, and the unincorporated areas of Carolina Forest, Garden City, and Socastee will now largely fund the I-73 project.

If taken, actions by the three coastal towns will make it virtually impossible for Horry County to honor its contract with SCDOT, signed last December.