Cay Clubs' founder convicted of fraud, other counts, faces decades in prison

Article Courtesy of The Miami Herald

By Larry Kahn   

Published December 16, 2015


Fred "Dave" Clark, founder of the defunct Cay Clubs Resorts and Marinas that the feds say was a $300 million Ponzi scheme, was convicted by a federal jury Friday of three counts each of bank fraud and making a false statement to a financial institution and one of obstructing the U.S. Securities and Exchange Commission by lying to the regulatory agency.

Clark, 57, was accused of using the Tavernier-based Cay Clubs as his own bank account, extracting $22 million from it from 2005 to 2007 and using the money on waterfront homes, cars and planes. He founded Cay Clubs and was its chief executive officer.

At its height, Cay Clubs had interest in dozens of businesses and employed scores of people, who all lost their jobs as the company went down hill.

Some 1,400 investors and financial institutions lost money on Cay Clubs, which sold condos as condo-hotel vacation units in the Keys, Clearwater and Las Vegas and promised renovations and big payouts to the investors through lease buy-backs. Clark's wife, Cristal, was acquitted earlier this year. This was Dave Clark's second trial; the first ended in a mistrial when jurors deadlocked.

Clark "directed his administrative assistant and his bookkeeper to forge signatures on loan documents and falsely notarize mortgage paperwork to make it appear family members, his significant other and other insiders listed on paperwork were in fact executing the documents," the U.S. Attorney's Office in Miami said. "In reality, Clark was providing the loan deposits and down payments, directing his subordinates to execute the loan documents and then using the proceeds of the transactions to fund Cay Clubs' operations and for his own personal benefit."

"The defendant preyed upon trusting investors and then stole their hard-earned money," said Kelly Jackson, special agent in charge of the Internal Revenue Service's investigations.

Cay Clubs, founded in 2004, collapsed in 2008 when it couldn't pay investors. Clark was arrested in Panama in June 2014 and extradited to the United States. The U.S. Attorney's Office says Panama "expelled" him.

The government has frozen $2 million he had transferred to a Honduras bank account.

Two other Cay Clubs executives, Barry Graham and Ricky Lee Stokes of Fort Myers, pleaded guilty to fraud and each received five years in prison. They must pay back $163 million to the investors, which likely won't happen.

Clark's sentencing will be in Feb. 25 in federal court in Key West with federal Judge Jose Martinez presiding. He faces decades in prison, where he's been held since his arrest.