Stolen documents in lawsuit involving Myrtle Beach City Councilman Gray prompted court’s policy changes

dwren@thesunnews.comOctober 30, 2013 

— Documents from a probate court case in which Myrtle Beach City Councilman Wayne Gray was accused of mishandling the estate of a widow and her children are missing from the Horry County courthouse, prompting increased security measures in the probate court’s public records room and raising questions about who would have taken the filings.

Although probate court staff have tried to reconstruct the case file with copies of documents provided by the lawyer who represented the widow, many of the documents – including details of the allegations against Gray – still are missing.

“I was shocked to learn that someone had taken public records,” said Deirdre Edmonds, the probate court’s judge since 2003. Edmonds said she is not aware of any other instance in which documents have been stolen from one of the court’s files.

“We have no idea who did this or when the file was gutted,” Edmonds said. “It’s a criminal offense and if we knew who did it we would turn it over to the solicitor’s office.”

The penalty for petty larceny – that is, theft of items valued at $2,000 or less – is a jail sentence of up to 30 days or a fine of up to $1,000, according to South Carolina law. Petty larceny is a misdemeanor.

Gray, a vice president at Tidelands Bank who is running for his fourth term on city council this year, said he does not know what happened to the documents. Debbie Rogers Idol, the woman who sued Gray, said she was surprised to learn that the documents in her case are missing.

Since learning of the theft, the probate court has restricted the public’s access to case files by requiring each one to be signed out by the person who wants to review the file. Court volunteers and staff are the only people allowed to retrieve files from shelves in the public records room. Prior to the theft, members of the public could retrieve and review files without supervision.

The Sun News learned of the theft earlier this month when it sought access to the case file. The newspaper has since reviewed documents in the case provided by Pawleys Island lawyer Richard Smith, who represented Idol.

Those documents include a petition filed on Idol’s behalf that accused Gray of breach of fiduciary duty, negligence, unjust enrichment and conversion related to a pair of trusts set up by Idol’s former husband, William Rogers, who died in August 1995. Rogers, who was Gray’s uncle, appointed Gray to oversee trusts for Idol and the couple’s five children, according to Rogers’ will.

A petition to remove Gray as trustee was filed in September 2007 and Palmetto Heritage Bank was named trustee the following year. The bank continues to administer the trusts.

Gray did not admit any wrongdoing but agreed in July 2008 to pay Idol $92,500 to settle the lawsuit, according to court documents.

“That matter is resolved and there were no claims of liability on my part,” Gray told The Sun News this week. Gray declined to discuss the matter further.

Documents show Gray borrowed nearly $230,000 from the trust accounts through a series of at least 17 unsecured loans he made to himself. Those loans – which ranged from $3,500 to $50,000 and had no documented repayment terms – started one year after Rogers’ death and continued through at least 2005, according to a spreadsheet Gray provided to Smith. Gray said he repaid the loans with interest, but court documents state that proof of that repayment was never received by Idol or her lawyer.

In addition, court documents said Gray did not account for at least $35,000 from a settlement agreement Rogers’ construction company received after his death.

The petition also states that Gray failed to provide accounting for the trusts, made improper and imprudent investments of trust assets and allowed assets to disappear from the trust.

Among the assets that disappeared was a $4,000 Rolex watch that Rogers left for one of his sons. Idol told The Sun News that she started questioning how the trusts were being administered when she asked Gray for the watch in 2007. Idol said Gray told her at the time that he could not locate the watch.

“This was an extremely difficult time for me and my children,” Idol, who owns an event promotion business in Murrells Inlet, said in a written statement to The Sun News.

“The lack of accounting and unaccounted for personal property prompted our action for legal resolution,” Idol stated. “The absence of documentation, the financial burden of forensic accounting and the prospect of ongoing litigation were determining factors in the settlement between the parties. The transfer of the trusts to a financial institution was in the best interests of the beneficiaries.”

Idol brought the case to the newspaper’s attention after reading about a $2.3 million civil judgment Bank of North Carolina filed against Gray earlier this year for failing to repay a loan for his Spring House Restaurant Corp.

The probate court first learned that documents had been stolen from its case file in 2010, when a clerk retrieved the file and saw that everything except a transcript of a court hearing was missing. Edmonds contacted Smith and James McCrackin, a Myrtle Beach lawyer who represented Gray, in an attempt to get copies of their documents to reconstruct the court’s file. Smith provided some documents but McCrackin never responded to Edmonds’ request, according to a memo included in the case file.

The nearly empty case file remained in a court employee’s office for nearly three years and its missing contents had been forgotten until The Sun News asked to review the file earlier this month, according to another memo in the file.

A court employee contacted McCrackin again this month in an attempt to get documents, according to a memo in the file. That memo states that McCrackin apologized for not responding to Edmonds’ request and that he had no documents to provide.

McCrackin told The Sun News this week that he will check his files again to see if he has any documents that could help the probate court reconstruct its case file.

Edmonds said she hopes an ongoing project to digitally scan the court’s files will prevent any future thefts. All probate court files this year have been scanned and the court will be scanning archived documents over at least the next couple of years.

“That way, people won’t be handling the original file,” Edmonds said.

Contact DAVID WREN at 626-0281.

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