Cayman residents accused of US ponzi scheme
(CNS): Two residents of Cayman who were allegedly involved in a major real estate Ponzi scheme have been charged by the Securities and Exchange Commission along with three other American defendants. Fred Davis Clark, 54, of Grand Cayman, who was the former president and CEO of Cay Clubs, and his wife Cristal Coleman, 39, who was a manager and sales agent along with Barry Graham, 57, of Marathon, Fla; David W. Schwarz, 56, of Orlando, and Ricky Lynn Stokes, 53, of Fort Myers, have all been charged with defrauding nearly 1,400 investors of more than $300 million. According to the SEC complaint Clark and Schwarz launched Cay Clubs in 2004 the venture eventually entailed a web of more than 100 companies and 150 bank accounts.
The scheme involved a network of hundreds of sales agents, marketing seminars and podcasts to promote the purported opportunities of investing in units at Cay Clubs resorts, the SEC claim, in a report in the Miami Herald.
In classic Ponzi scheme fashion, instead of using the investor funds to develop resort properties and units, the Cay Club executives used new investor funds to pay returns to other investors, the SEC alleges. The agency said executives received “exorbitant salaries and commissions’’ totalling more than $30 million and siphoned off investor funds to buy airplanes and boats.
After Cay Clubs closed, Clark and his wife Coleman moved to the Cayman Islands and funnelled at least $2 million to offshore accounts, according to the SEC – funds the agency now plans to fight to get back in court.
Jeffrey L. Cox, a Boca Raton attorney representing Fred Davis Clark, said: “We intend to vigorously defend these allegations in court.’’
The SEC report said Clark is currently co-chairman of CMZ Group Ltd, a Cayman firm that includes a Caribbean pawn shop network and a spirits business, among other ventures.
Clarification: According to CMZ Group Ltd, Fred Clark is no longer affiliated with the company, having separated from it on 29 January, the day before the SEC complaint was filed (30 January).
Read more here.
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