Banking

Feds allege $300-million Ponzi scheme at Cay Clubs Resorts

Two former Monroe County residents were charged in federal court with conspiracy and multiple counts of bank fraud in connection with an alleged $300-million Ponzi scheme.

The scheme involved selling vacation rental units for Cay Clubs Resorts and Marinas to some 1,400 investors in the Florida Keys and elsewhere, according to the U.S. Attorney’s Office.

Charged in a superseding indictment in federal court in Miami are Fred Davis Clark, Jr., 56, and Cristal R. Clark, 41.

The indictment alleges that the couple, who were executives at Cay Clubs Resorts and Marinas, marketed vacation units in Florida, Las Vegas, and the Caribbean, and promised to turn rundown properties into luxury resorts. The indictment alleges the investors were promised leaseback payments ranging from 15 percent to 20 percent of the sales price at closing — payments that weren’t disclosed to financial institutions.

“By at least 2006, Cay Clubs did not have sufficient funds to make improvements to properties or to make the leaseback payments that had been promised to earlier investors. Cay Clubs would use the proceeds of sales to new investors to make incremental leaseback payments to earlier investors,’’ the U.S. Attorney’s Office said in a press release.

In the indictment, the Clarks are also accused of concealing assets from the U.S. Securities and Exchange Commission. An SEC case related to Cay Clubs was dismissed earlier this year when U.S. District Judge Lawrence King ruled the statute of limitations had passed.

Authorities said Fred Davis Clark was expelled from Panama in June and Cristal Clark from Honduras the same month. They are being detained while awaiting trial on these charges in Key West before U.S. District Judge Jose E. Martinez.

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