Captain’s Cove Club President Faces Charges for Disclosing Confidential Information

By Linda Cicoira — Criminal charges were filed against the president of Captain’s Cove Golf & Yacht Club Tuesday that allege he violated six state and federal laws when he directed confidential information about property owners be published on the homeowners’ association website. The charges were filed in Accomack General District Court.

“I think the charges are unfortunate,” said Board President Timothy R. Hearn, 58, a commercial real estate businessman who bought and “bailed out” the development’s utility company in 2010 and lives in Cockeysville, Md. “I know they misled the magistrate’s office as to what has occurred. I’m sure once it is in front of a judge, it will quickly be resolved in my favor.”

According to court records, one charge each was brought by seven property owners. The case will be prosecuted by Elizabeth Wolff, Accomack’s assistant commonwealth’s attorney.

“You have to be a member to see” the 1099 tax forms listed online, said John Ward, a resident of Captain’s Cove, a former board member, and one of the people who filed the court documents. 

However, he added, “You can click (the privileged information) and send it to anyone you want to.” Ward said state Sen. Lynwood Lewis’ employer ID is also on the site because he did legal work for the organization. Lewis was not among the complainants.

Ward claims mostly former directors were targeted because they were paid for serving. “He (Hearn) decided to tell everyone that we stole,” Ward said. “He decided to tell everyone we took money, we weren’t supposed to take. He stopped the stipends.” Ward said the payments were legal and were included in the group rules. But, giving out the Social Security numbers or employer identification numbers of those recipients is not legal. “Everybody who got a check in a two-year period” got a 1099 tax form that included their numbers, he said.

“John Ward challenged the current board of directors to prove he took the money,” said Hearn. “A piece of the evidence was the 1099s.” Ward went to the state HOA ombudsman and requested the forms be shown without redaction and then claimed they showed too much information, said Hearn.

“From 2008 to 2012 while these individuals and others were on the board of directors, the association lost on average $250,000 per year … through fiscal mismanagement,” said Hearn. “Every year an audit was done and those numbers were shown” but the directors didn’t try to make it up. “They were not investing in capital improvements,” he added. “They had not been transparent.”

The former directors “were taking money from the association under the guise of being reimbursed for travel expenses” of between $200 to $400. “Very creative from on their point when most were a quarter-mile away. Over five years, the money they took, and as members of the Environment Control Committee, was close to $200,000.”

“It never happened,” said Ward. “There’s no such thing. It’s not arguable.”

Ward said when he got on the board, the officers were paid $200 a meeting and the other directors were paid $150 a session. There were about 10 meetings a year for a total of $30,000 in three years. Regarding the travel vouchers, Ward also said that wasn’t true. “Nobody went anywhere. I can walk to the meeting. It’s unbelievable. I don’t know what’s wrong with him. It’s made up.”

Ward said the payment amounted to about $2 an hour with the rest of the work that went with the position. “The lowest salary I ever got.” Ward wanted to know what was wrong with getting paid for being a director. Regarding the charges against Hearn, he said, “By breaking the law, he had to prove to me? You can’t do that.”

“It’s not just my side of it,” Hearn continued. “It’s the board’s. More than $1.4 million of liquidity is on the balance sheet. Cash and CDs, a capital reserve study. More than $2 million in progress of capital work has been done. I think Mr. Ward and his other board members are embarrassed that new leadership came in and not just fixed all the problems that they created,” but made money. “None of the (newer) board members have taken any money or requested any of this fictitious travel money.”

“They are very bitter,” Hearn continued. “Their actions were revealed publicly.” Ward is “on record as stating all the successes in his business career” was why he should be paid. Hearn complained the former directors provided “no receipts. They just went to meetings and had money paid to them.”

“I think they are embarrassed,” Hearn repeated. “The community is just a wonderful place. No dues increase in four years now. It’s just a question of having a group of professional civic-minded people.”

In addition to Ward, the charges were filed by Janice Widmyer, of Starboard Street, in Greenbackville; Wayne Woodhams, of Merrimac Court, in Greenbackville; John R. Vincent, of Lakeland Drive, in Pocomoke City, Md.; George J. Dattore, of High Sea Drive, in Greenbackville; Judith Ann Hunt, of Scimitar Way, in Greenbackville; and Richard W. Eicher, of Goby Trail, in Bonita Springs, Fla.

“The president (Hearn) ignored a warning not to do this, but chose to proceed,” the warrants state. “In doing so, I believe he maliciously endangered my present and future financial well-being and exposed me to years of potential identity theft,” the complainants continued. “I believe this action violates a number of state and federal laws.”

Ward said another problem is Hearn and four other directors are among joint owners of 1,345 lots. Ward says they were chosen to be on the board because they have the majority of votes. Ward believes the five directors are part of the limited liability company that owns the clubhouse and are selling it to the community for $3 million.

There are 3,745 lots in Captain’s Cove, according to Ward.

From Nov. 4, 2017, until the present, Hearn directed the “communications coordinator to post on the HOA website the IRS tax Form 1099 for 32 individuals for three calendar years,” according to the charges. “Initially the forms displayed … Social Security numbers for these people and were available for viewing and copying by several thousand cove property owners. The 1099s were later modified, after approximately 2 1/2 to 4 days to redact the SSNs but the … 1099s remain posted and available.”

According to the warrant, “It shall be unlawful for any person to disseminate, publish, or cause to be published any confidential tax document which he knows or has reason to know is a confidential tax document.” The document is “any correspondence, document, or tax return that is prohibited from being divulged … and includes any document containing information on the transactions, property, income or business of any person, firm or corporation that is required to be filed with any state official.”

The seven contend secrecy of information, restricted use of Social Security numbers and the Virginia Consumer Protection Act of 1977 were violated. In addition, they say posting the information is contrary to the Internal Revenue Code, The Social Security Act of 1942, and the Social Security Number Privacy and Identity Theft Protection Act of 2007.

Ward said Hearn used to own a house at Captain’s Cove but it was sold at auction. Hearn said in Hurricane Sandy in 2012 the house was damaged when the road was elevated by the former directors and all the water from the storm ended up in his yard. “Our house was on pilings and it still got damaged … the dike effect was intentional.”

Hearn was served June 7, just a short time before the quarterly meeting of the directors was about to begin. In 2004, Hearn and his wife, Joyce K. Fisher, bought Lot 1451, Section 3, of Captains Cove, for $387,000 from Raymond and Judy Dallago, according to records filed in Accomack Circuit Court.

“I don’t have enemies,” Hearn said. “It’s not my style. … I had a lot of success in business, the loss of that house … we had insurance. I don’t have enemies but I’m not interested in having people … take advantage. They don’t like the fact that I have said that in a meeting.”

Widmyer answered her phone Tuesday but wouldn’t comment. “At this time, I’m going to be quiet and let the court decide,” she said.

Another Top-Level Resignation in Cape Charles

By Stefanie Jackson — Cape Charles interim Town Manager Bob Panek has resigned from his position, which he held for the last two months. He was filling in for the former town manager, Brent Manuel, who resigned effective April 6, until the town council could find a permanent replacement.

Panek was the assistant town manager before assuming Manuel’s role. Though Panek will no longer act as town manager, he will remain on staff as a project manager.

According to the Cape Charles website, the town planner, Larry DiRe, has been named as the new interim town manager.

As of the May 17 town council meeting, the candidates for the town manager position were narrowed down to five finalists, and the council was prepared to conduct the last rounds of interviews.

A reporter’s calls to the town clerk were not returned. An interview with Panek has been scheduled and a follow-up story will appear in next week’s edition of the Eastern Shore Post.

Taylor and Luria take Republican and Democratic Nominations

By Linda Cicoira — Rep. Scott Taylor, of the 2nd Congressional District, easily defeated his opponent Mary K. Jones in the Republican primary Tuesday, gaining the party’s nomination for re-election with nearly 76 percent of the vote.

Taylor will face Elaine G. Luria, who won the Democratic nomination Tuesday with 62.32 percent of the votes in that primary. Luria defeated Karen Powers Mallard. Independent candidate Aldo J. DiBelardino, a Virginia Beach resident, will also be on the ballot.

Corey A. Stewart led the competition for the Republican nominee for the U. S. Senate with 44.87 percent of the ballots in a close race with Nick J. Freitas who got 43.14 percent of the votes. Candidate E.W. Jackson trailed with the remaining 12 percent.

Stewart will go against Sen. Tim Kaine, the unchallenged Democratic nominee, in November.