Cay Clubs Co-Founders Hit with $300M Ponzi Scheme Charges

Former Cay Clubs Resorts and Marinas executives, Fred Davis Clark Jr., 56, and Cristal R. Clark, 41, have been charged with conspiracy to commit bank fraud and multiple counts of bank fraud in a massive $300 million Ponzi scheme. The duo, both formerly from Monroe County, Florida, are accused of selling vacation rental units to approximately 1,400 investors across the United States, promising improvements that were never delivered.

Cay Clubs, which operated from 2004 to 2008, marketed units in locations including the Florida Keys, Las Vegas, and the Caribbean. The scheme involved using new investor funds for leaseback payments to earlier investors, effectively using them as a cash flow to maintain operations. This fraudulent practice came to light by at least 2006 when Cay Clubs failed to have adequate funds for promised improvements or leaseback payments.

After the collapse of Cay Clubs, Fred Davis Clark and Cristal Clark were investigated for securities fraud by the U.S. Securities and Exchange Commission (SEC). They were accused of concealing assets and providing false testimony. Furthermore, they were charged with conspiracy to commit mail and wire fraud in a separate scheme involving CMZ Group, Ltd., using bank accounts and shell companies to siphon funds for their lavish lifestyle.

Before the SEC’s charges, Fred Davis Clark and Cristal Clark transferred more than $2 million to a Honduras bank account to prevent the SEC from tracing the funds. The money has since been frozen by the Honduran government. Both were expelled from Panama and Honduras in 2014 and ordered detained.

This case marks another high-profile Ponzi scheme that highlights the dangers of investment fraud and the lengths some will go to maintain their lavish lifestyles at the expense of unsuspecting investors.