Politics

Another Twist in the Skydive Myrtle Beach Controversy

Another interesting twist has appeared related to the Skydive Myrtle Beach controversy with Horry County over the county’s closing of the Skydive Myrtle Beach business.

Nearly two years ago, the county used a Director’s Determination by the Federal Aviation Administration to close the landing zone for skydivers at Grand Strand Airport and evict Skydive Myrtle Beach from a hangar at that airport.

The Director’s Determination was based on 112 alleged safety violations committed by Skydive Myrtle Beach, which were documented and reported by Horry County Department of Airports personnel and/or Robinson Aviation personnel who are contracted by the county to staff the control tower at Grand Strand Airport.

In a recent post about the ongoing controversy, we quoted a letter by Horry County Attorney Arrigo Carotti that backed away from calling the documents proof of safety violations by SDMB.

Carotti’s letter, which was included with a response to a FOIA request for documents related to SDMB safety violations, stated, in part, the documents provided “may or may not demonstrate violation by Skydive Myrtle Beach of Horry County Department of Airports Minimum Standards, as that assessment has not been undertaken.”

Several days after the story was posted, the following was contained in an email to at least one county council member:

“On Aug 15, 2017, at 11:24 AM, Carotti, Arrigo wrote:

The misrepresentation of facts and the law has been ongoing on the part of Mr. Holly, misguided bloggers, and Holly surrogates for several years now, involving universally unsuccessful litigation by Holly, and pending litigation against the FAA, the State of South Carolina, Horry County, officials and employees. There have been no new admissions, the FAA’s and County’s sound positions in the matter remaining the same. 

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Horry County Reverses Story on Skydive Myrtle Beach Alleged Violations

Nearly two years after evicting Skydive Myrtle Beach from Grand Strand Airport for, allegedly, committing numerous safety violations, Horry County now won’t claim the skydiving business committed any violations.

In a cover letter providing 126 documents responding to a Freedom of Information Act request for all public documents associated with Skydive Myrtle Beach safety violations, Horry County Attorney Arrigo Carotti stated in part, “These records are provided in an abundance of caution, in that each may or may not demonstrate violation by Skydive Myrtle Beach of Horry County Department of Airports Minimum Standards, as that assessment has not been undertaken.” (See full letter below)

What is astounding about that statement is that two years ago the exact same documents were provided to both the Federal Aviation Administration and S.C. Fifteenth Circuit Court as proof of safety violations by Skydive Myrtle Beach.

In 2014, Skydive Myrtle Beach lodged a complaint with the Federal Aviation Administration against Horry County Department of Airports alleging discriminatory actions against Skydive Myrtle Beach by HCDA.

In response, Horry County Department of Airports reported to the Federal Aviation Administration that Skydive Myrtle Beach was the subject of 112 alleged safety violations (contained in the 126 pages of documents) while conducting business at Grand Strand Airport.

On October 7, 2015, the FAA issued a Director’s Determination Report, authored by Randall Fiertz, the FAA Director of Airport Compliance and Management Analysis, in response to Holly’s original complaint, supposedly basing the report on those safety violations.

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Myrtle Beach City Election Issues

Less than three weeks remain before filing officially opens for the upcoming Myrtle Beach city elections.

Already a number of people have emerged to announce their intention to run against the four incumbents up for reelection. While I’m sure there will be a large field of challengers, we won’t know exactly who is in the race until filing closes.

In the meantime, there are some interesting dynamics developing for this year’s election.

In the past few months, council has drawn criticism for the threatened use of eminent domain to take control of several properties in the Superblock after secretly purchasing approximately 10 other properties in that area.

After being exposed, the city announced a plan to redevelop the area with a new, $10 million building to, reportedly, house Chapin Memorial Library and a new Children’s Museum.

There are questions whether eminent domain taking of a property can be used for such a purpose and whether $10 million of taxpayer money is best spent on this project when public safety needs, among others, are critical at this time.

Shootings on Ocean Boulevard and in other parts of the city highlight the amount of violence that has infringed on Myrtle Beach streets. After the Father’s Day weekend incident during which eight people were wounded on Ocean Boulevard, the city placed barricades on one section of Ocean Boulevard, ostensibly for crowd control, but in front of retail stores and restaurants which occupy an area the city would also like to see be redeveloped.

The businesses in the area of the barricades reported drops in sales of 30-60 percent from previous years numbers.

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U.S. Attorney Enters Skydive Myrtle Beach Lawsuit

The U.S. Attorney for the South Carolina District has notified the Florence Federal District Court that she will be representing the individual federal defendants in a federal tort claims lawsuit brought by Skydive Myrtle Beach Inc.

The notification is included in a motion, signed by Interim U.S. Attorney for S.C. Beth Drake, to the court requesting an extension in filing a response just as time for a response was running out.

Skydive Myrtle Beach named Horry County, Horry County Council, the Federal Aviation Administration and a number of officials with all agencies individually as defendants.

The lawsuit claims Skydive Myrtle Beach was illegally closed when Horry County Council and its Department of Airports worked with the FAA to deprive Skydive Myrtle Beach of its constitutional right to due process and equal protection under the Fourteenth Amendment of the U.S. Constitution.

In 2014, Skydive Myrtle Beach lodged a complaint with the Federal Aviation Administration against Horry County Department of Airports alleging discriminatory actions against Skydive Myrtle Beach by HCDA.

In response, Horry County Department of Airports reported to the Federal Aviation Administration that Skydive Myrtle Beach was the subject of 112 alleged safety violations while conducting business at Grand Strand Airport.

In October 2015, the FAA issued a 73 page Director’s Determination Report supposedly basing the report on those safety violations. Horry County subsequently used this report as an excuse to shut down Skydive Myrtle Beach operations at Grand Strand Airport.

Skydiving is an approved aviation activity at all airports receiving FAA grants, according to FAA guidelines. Grand Strand Airport and the Horry County Department of Airports receive FAA grants on a routine basis.

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Proper Expenditure of Hospitality Tax Revenue

A suggestion for the use of hospitality tax revenue was made at Tuesday night’s Horry County Council meeting that makes too much sense to ignore.

In a discussion of New Business, council member Paul Prince spoke about the poor conditions of many roads in the county as well as some need for advance planning in adding additional lanes to Hwy 90, Hwy 905 and roads extending off of those two.

Prince suggested meeting with the Horry County legislative delegation and governor Henry McMaster to find some funds to help with these roads.

Council member Harold Worley suggested spending the “two and one-half percent” on the roads. Worley’s reference was to the county’s hospitality tax.

Governments supposedly collect taxes in order to provide public goods and services. Think here roads, bridges, police, fire and mass education.

Hospitality tax is a little different in that state law requires hospitality tax revenue to be spent on tourism related expenses.

When hospitality tax was first approved by county voters in a county wide referendum, one percent of the total was designated to the government jurisdiction in which it is collected while one and one-half percent was designated to pay off bonds for Ride I projects.

The Ride I bonds are expected to be paid off on or before 2019. The one and one-half percent designated to those bonds brings in revenue of approximately $38 million per year to Horry County.

While it may take a little tweaking of state law to spend all of that revenue on the county road system, it is hard to argue that tourists do not use virtually all of the roads in that system. In addition the tax revenue could be spent on necessities such as public safety.

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New Insights Into Founders Group International Lawsuit

(Pictured above, Dan Liu (left) and Nick Dou)

Investigation into the lawsuit filed in the 15th Judicial Circuit by Nick Dou against Dan Liu and three Chinese corporations over properties held collectively by Founders Group International continues to bring new revelations to the surface.

According to a source familiar with the lawsuit, Dan Liu was served locally with the lawsuit in recent days.

Liu’s peer to peer lending company, which did business in the Peoples Republic of China (PRC) under both its Mandarin name “Yiqian Funding” and its English name “Easy Richness”, raised the money that was used to buy golf courses and other property in Horry and Georgetown counties.

According to records in Horry County, Liu and Dou established approximately 16 limited liability corporations to hold the various properties purchased in Horry and Georgetown counties. Collectively, the llc’s are known locally as Founders Group International.

According to court documents, Dou holds 10 percent interest in Founders Group International and the associated llc’s. The three Chinese corporations, for which Liu acts as exclusive U.S. agent, hold the remaining 90 percent of the llc’s.

According to sources familiar with Yiqian Funding, the company raised a total of approximately 10 billion Yuan ($1.5 billion) from approximately 60,000 investors over a six year period. Estimates are that at least $300 million was taken out of the PRC for investment in the U.S.

Sources with knowledge of Yiqian said what was purchased was not really important to Liu. His main goal was getting the money beyond the borders of the PRC.

For that purpose, Liu established the three Chinese corporations, apparently nothing more than shell corporations, to receive the investor money from Yiqian Funding to use for purchases in the U.S.

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It’s Working on Ocean Boulevard

Myrtle Beach city officials are sticking with the phrase “It’s working” since putting up barricades and increasing police presence on Ocean Boulevard following shooting incidents in the past several months.

It’s just not clear what’s working.

The phrase was initially coined for a series of local ads by the Myrtle Beach Area Chamber of Commerce attempting to justify the one cent tax for tourism promotion.

Now, “It’s working” has apparently entered the local lexicon of government officials to give vague answers about questionable initiatives.

The questionable initiatives are the barricades and uses of some police officers to perform duties other than patrolling the boulevard to prevent further acts of violence.

The only real effect seen from the barricades to date is to minimize foot traffic of potential customers to the many food and other commercial establishments in the heart of what used to be the busiest area of Ocean Boulevard.

Since the barricades were put in place two weeks ago, business owners in the area told Grand Strand Daily that their revenues are down 40-50 percent from previous years.

“It was Fourth of July weekend and it looked like a weekend in March,” said one business owner. “There is nobody around and our sales are way down.”

Several police jurisdictions have volunteered officers to Myrtle Beach for weekend help in patrolling the Boulevard. The idea is to increase police presence to discourage the types of violence seen just a few weeks ago.

However, several business owners report Myrtle Beach Police Department officers have been visiting their establishments to check on things like valid business licenses and look for minor discrepancies from Myrtle Beach ordinances.

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Old and New Issues Surround Chuck Jordan Case

The recent arrest of Conway High School football coach Chuck Jordan for alleged assault and battery in the third degree on a student may have as much to do about 1989 issues as current ones.

According to sources familiar with the incident, Jordan was in his office when an altercation between the student involved and a substitute teacher erupted in a school hallway. Jordan reportedly responded to a request from someone who went to his office and said words to the effect ‘somebody needs to help.’

A section of the police report on the incident states Jordan “unlawfully and without just cause placed his hand on (student’s) neck and shoulder area.”

A key piece of evidence in the case is film from a security camera in Conway High School. According to sources who viewed the video, the student is moving toward Jordan who has his hands up and appears to be waving at someone on the side. A person moves in from the side and behind the student, attempting to pin the student’s arms to his side and drag him out a door. While this is being done, Jordan and the student are very close and Jordan’s hands appear to come in contact with the student in the student’s shoulder and neck area for a brief period.

Initial reports in local media quoted a family member of the student that Jordan choked the student and slammed him. Neither allegation is visible on the security video, according to sources who have viewed it.

The incident occurred on May 26, 2017. Jordan was arrested on June 8, 2017 by Conway police. The student was arrested for causing a disturbance in a school. The school district immediately placed Jordan on administrative leave.

According to sources familiar with the incident, the student and substitute teacher are both African American while Jordan is white. Race shouldn’t have anything to do with the issue but it may be a factor in the back story.

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Records Reveal Different Picture of Founders Group International

When Nick Dou filed a lawsuit against Dan Liu and three Chinese corporations last week, he brought to light much more than one Chinese partner of Founders Group International, LLC suing other Chinese partners.

According to the lawsuit, Dou owns 10 percent of approximately 16 LLCs with one or more of three Chinese corporations owning the other 90 percent of each LLC. The parties primarily conducted business locally as Founders Group International, LLC.

Dan Liu appears not to have a direct ownership interest in any of the 16 LLCs, but rather acts as exclusive U.S. business agent for the three Chinese Corporations.

However, further research on business transactions involving one or more of the LLCs as well as the three Chinese corporations revealed that Liu now appears to hold mortgages on virtually all of the collective Founders Group International, LLC golf courses and development property in Horry and Georgetown counties.

Between February 2017 and May 2017, well over $100 million in promissory notes and mortgages were transferred to Dan Liu in a series of approximately 25 transactions recorded in Horry County.

Seventeen of the recorded transactions assigned promissory notes and mortgages from one or more of the three Chinese corporations for which Liu allegedly acted as exclusive U.S. agent to Liu. Papers for eleven of the transfers to Liu were signed on February 3, 2017 and recorded on February 10, 2017 and papers for the remaining six transfers were signed on April 28, 2017 and recorded on May 25, 2017.

The remaining transactions were preliminary assignment of promissory notes and mortgages so they could ultimately be assigned to Liu.

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Chinese Fireworks Erupt Over Founders Group International, LLC

Fireworks have erupted between the two Chinese principal owners of Founders Group International, LLC (FGI) as Nick Dou, one owner of the corporation, filed suit against Dan Liu, the other owner of the corporation, and three Chinese corporations Liu allegedly acts as exclusive agent for, in 15th Judicial Circuit Court on June 22, 2017.

According to the complaint, case number 2017-CP-2603932, Dou alleges Liu was stripping assets out of the corporation for personal and other uses. The suit alleges breach of contract, fraud and conversion by Liu.

Additionally, Dou asks for a full accounting of corporate assets as well as a temporary restraining order directing Liu “shall not divert, remove, alienate, convert, encumber or otherwise manipulate any corporate assets of FGI or any of the other FGI Entities for his personal use or benefit, until such time as the claims raised in this action have either been resolved by this Court, settled and/or withdrawn by the Parties to this action…”

The filing also states, “Plaintiff Nick Dou is informed and believes that the assets and property of FGI and the affiliated FGI Entities are at grave risk and danger of loss, and of material injury and impairment, at the hands of Defendant Dan Liu, if such property and assets are left under the exclusive control of Defendant Dan Liu.”

Dou asks the Court to “exercise its authority pursuant to S.C. Code Section 15-65-10, et seq., and immediately appoint a receiver over the property, assets, and operation of FGI and the affiliated FGI Entities.”

The three Chinese corporations named as co-defendants with Liu are: Jiangsu Tianru Danfo Commerce and Industry Co., Ltd., Nanjing Shuojun Trade and Industry Co. and Nanjing Xinyuanyuan Commerce and Trade Co., Ltd.

According to the complaint, all three corporations are organized and existing under the laws of the Peoples Republic of China and none of the three corporations have been “admitted to or authorized to conduct business in South Carolina.”

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