The residents of Oyster Harbor try to navigate tangled finances and criminal investigations

Almost everyone in Oyster Harbor liked the affable president of his civic association. Eric Epstein, a sailor with a knack for good yarn, volunteered year after year for a job no one wanted. He happily did road repairs, rented boat slips, and hosted happy hours where neighbors met over drinks on a breezy private beach.

But after two years of turmoil over tangled finances, a police investigation and a government-ordered cleanup of fragile wetlands, many in this tight-knit community outside Annapolis say Epstein wasn’t a good neighbor after all.

“He betrayed us all,” said Gerald Winegrad, a former state senator known for his environmental activism and whose home sits above Oyster Creek. Winegrad, who considered Epstein “my friend,” was one of the first to ask questions about the now-ex-president.

Epstein, 63, a semi-retired technology and yacht services consultant, is accused by Anne Arundel County police of stealing $18,300 in community funds to pay his cable television and veterinarian bills. A trial on four counts of theft and embezzlement is scheduled for Nov. 4 in Anne Arundel County District Court. If convicted on all counts, he could face a fine of up to $40,000 and 35 years in prison, although sentences for lower-level financial crimes are typically significantly less.

In an interview, Epstein called the allegations “bizarre.” While Epstein declined to elaborate on the fact that he needed a cable connection for his community work, he said, “Everything I did was correct.” He blamed the theft allegations on a “vengeful campaign by some disgruntled people,” saying, ” This is very bad” and vowed to “beat everything that is brought against me.”

His prosecution is the latest twist in a saga that has rocked Oyster Harbor, a historically black summer resort that has clung to the simpler, leisurely habits of an earlier Annapolis.

Oyster Harbor was created in the early 1950s, during a time of segregated beaches on the Chesapeake Bay. It offered black families a welcoming place to fish and swim, across the street from Highland Beach, the first black town to be incorporated in Maryland. Now occupied year-round and predominantly white, the small enclave of 382 cottages and multimillion-dollar renovations is still independent, with its own streets, playgrounds and a secluded beach overlooking the Bay Bridge.

When Epstein resigned in the fall of 2022 after nine years as president, Oyster Harbor was embroiled in a heated dispute over a golf cart trail he had approved in an undisturbed stretch of tidal marsh. Residents protested that the project would divert wastewater into their yards, triggering an investigation by the Maryland Department of Environmental Protection, a $5,000 fine and the costly removal of more than 200 tons of debris, rocks and mulch.

But the controversy over what the state considered an “illegal trail” was just the beginning. The civic body soon discovered that Epstein, apparently without telling anyone, had applied for a $1.4 million grant to buy out the owner of seven small lots in the marshland – at 10 times their original value. A copy of the grant application to the National Fish and Wildlife Foundation shows that Epstein drew up a rough concept for a wilderness park and pledged $50,000 in community funds. The nature conservation organization refused.

Surprised, the board ordered an outside audit of Oyster Harbor’s finances, which uncovered multiple discrepancies and irregular bills from 2016 to 2022, according to three board members and nearly 60 pages of association documents. Meanwhile, a group of homeowners complained that the municipality had been billed for flood protection work that was never carried out.

That’s why the Oyster Harbor Citizens Association recently reported that it owes the county $90,000 — on top of $80,000 it has paid back in “missing or misdirected” tax funds. County police have charged Epstein with embezzlement of a small amount of money, but have concluded that the other alleged discrepancies were “civil matters” that the agency was responsible for prosecuting, police spokesman Justin Mulcahy said. Epstein denied that funds were misused.

The association, which has also spent at least $50,000 on audit and legal fees, filed a $170,000 insurance claim in May.

Oyster Harbor, one of 62 “special tax districts” in the county, collects $400,000 annually from a surcharge levied on residents’ property bills. The additional income should flow into clearly defined community projects such as snow clearance or coastal erosion. However, the county relies on community associations, usually led by volunteers, to enforce how the funds are used.

The audit found that Epstein opened a separate bank account in Oyster Harbor for pier maintenance and transferred $270,000 in small installments over a six-year period. Not all of the money went toward repairing the aging pillars.

The audit revealed that more than $35,000 in cash was withdrawn in what was described as “landscaper tips.” A Nashville singer received $6,000 for a YouTube promotional video. Another $16,000 went toward STEM scholarships and Lego kits for local schools, thousands more toward a dog wash, Wi-Fi upgrades and beer for beach parties. The board found that none met its spending rules.

“It was a surprise. We did not authorize these transfers,” said Winston Dunkley, a longtime board member who spent months reviewing minutes and financial reports. He partly blames himself. “We were too trusting,” he said, adding that he also found Epstein “charming.”

The audit results prompted some residents to email the board to ask why money was paid for paving and drainage repairs that they say never happened. Among them was Thomasina Coates, who needs help because her yard and driveway are frequently flooded by rainwater. Epstein promised to create a rain garden and make other improvements, she said. But even though the club was billed $8,000, according to financial reports, she’s still waiting.

“Humans have eyes; They can see if something is being done,” said Coates, a Charles County commissioner who spends weekends in a traditional bayside cottage that her in-laws built in 1988. “I just need to fix my drainage. Water flows from all directions, left and right, from the hill above. I had ducks there. They thought it was a pond.”

For his part, Epstein, who still lives in Oyster Harbor, said he has provided receipts for all expenses and assumes all drainage work he approved has been completed. He just opened a new bank account for pier maintenance, he said, because using an ATM card was easier than writing checks from the main account. Epstein, whose LinkedIn profile describes him as a Navy veteran, STEM volunteer and owner of several startup companies, also said he doesn’t believe the county is due a refund.

“The municipality created the problem with the audit,” he said, “and then told the county they had a problem and now they have to pay it back.” Somehow I’m being blamed for everything. I am not what was presented to you. I’m an easy-going guy who lives a very simple life.”

For many homeowners in once-tranquil Oyster Harbor, months of meetings, threats of lawsuits and outraged text messages have taken their toll. While board secretary Nancy Plaxico issued a statement saying the board was “fully cooperating” with the police investigation, she sighed and admitted, “It was stressful.”

Some worry that the neighborly spirit is weakening – the casual barbecues, children riding bikes and retirees casting lines from the community pier. Oyster Harbor prides itself on remaining low-key, even as Annapolis’ waterfront neighborhoods have become increasingly affluent and exclusive. People here still remember the joint cleanup efforts after Tropical Storm Isabel smashed into the seawall and damaged homes in 2003. Plaxico said: “We want to preserve this history and this spirit.”

But others agree with Dunkley, who argues that the best way forward lies in “responsibility.”

At 71, Dunkley still remembers his first glimpse of Oyster Harbor like a montage – “flashes of water, the eclectic houses, the people outside.” It reminded him of Jamaica, where he was born. He left tidy Montgomery County in 2002, built himself an airy house and never looked back.

Unlike some of his neighbors, Dunkley believes that despite “a lot of upheaval,” the neighborhood will emerge stronger. Oyster Harbor has now hired a professional management company. And last month, more than 100 homeowners voted for a new president and three first-time board members who promised to closely monitor spending and respond more quickly.

“I love this community,” said Dunkley, “and I don’t use that word loosely. Here you can meet people from all walks of life. Walking my dog, talking to people, looking at the water. It’s idyllic.”