Five former executives of the now-defunct Cay Clubs Resorts and Marinas in the Florida Keys have been accused of defrauding over 1,000 investors out of $300 million they contributed towards the development of five star resorts in both Florida and Las Vegas.
The alleged Ponzi schemers purportedly guaranteed returns of 15 percent to investors, who were supposed to recoup their funds through a company-managed rental program, according to Reuters, instead paying out their early investors with cash from new investors. They allegedly took salaries and commissions of more than $30 million and bought airplanes and boats with investor money.
The accusations were brought by the Securities and Exchange Commission in a lawsuit filed yesterday in U.S. District Court in Miami. The executives named in the suit are Cay Club’s former president and chief executive officer, Fred Davis Clark, Jr, as well as David Schwarz, Cristal Coleman, Barry Graham and Ricky Lynn Stokes. [Reuters] – Katherine Clarke