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Ponzi Scheme Owner Gets 40 Years Jail. Lawyer Involved in $300M Ponzi Scheme Attempting to Stop 90 Day Florida Bar Suspension.

LIT: There’s something not right about this whole saga in Florida and when it involves real estate of this magnitude, you know somethings up!

LIT COMMENTARY

A Fort Myers lawyer facing an ethics complaint over his links to a former client’s $300 million Ponzi scheme asked the Florida Supreme Court not to suspend his law license – for 90 days or as decided by the court – when his attorney Patrick McGinley and bar counsel Chris Altenbernd faced off in oral arguments.

The Florida Bar accused attorney Charles Paul-Thomas Phoenix of violating rules governing truthfulness and terminating representation. Its complaint alleges he knew his client, Florida vacation rental company Cay Clubs Resorts and Marinas, was defrauding investors.

David Schwarz, officer in Cay Clubs Resorts, convicted in $300 million vacation rental scam

Originally Published: March 6, 2017 | Republished by LIT: Oct. 13, 2020

MIAMI — A former executive of a failed Florida Keys resort has been convicted in a $300 million vacation rental scam.

A U.S. Attorney’s Office statement says a jury found 60-year-old David Schwarz guilty Friday of conspiracy to commit bank fraud, bank fraud and interference with the administration of the IRS. Sentencing is May 1 – (He would be sentenced to 40 years jail).

Schwarz was once chief financial officer and one-third owner of the Cay Clubs Resorts and Marinas, which operated resorts in the Florida Keys, Clearwater, Orlando and Las Vegas. Prosecutors say 1,400 investors who purchased units in Cay Clubs developments were defrauded.

The resort’s former president, . Fred Davis “Dave” Clark Jr., was sentenced last year to 40 years in federal prison.

Two former sales executives pleaded guilty to conspiracy charges and were sentenced to five years in prison.

But read on…the 11th Circuit ain’t happy with Schwarz sentence…

Sept 30, 2020 – The three-judge panel at the Court of Appeals for the Eleventh Circuit ordered a new trial for David W. Schwarz, who served as chief financial officer and owned a one-third interest in the failed Cay Clubs Resort and Marinas, a Florida Keys luxury resort company that federal prosecutors claimed was a wholly fraudulent operation used to carry out the scheme.

Former Cay Clubs principals Cristal and Dave Clark denied bond as flight risks, passports seized, $2.2 million in account frozen

Originally Published: July 12, 2014 | Republished by LIT: Oct. 13, 2020

Cristal Clark wouldn’t open her door when U.S. marshals came knocking in Honduras, and husband Dave was nabbed trying to enter Panama.

Former Cay Clubs Resorts and Marina executives “Dave” Clark and Cristal Coleman Clark, both held in federal custody as “a serious risk of flight,” were expected to enter pleas during their formal arraignment on felony charges Friday in Key West.

In a July 2 decision, U.S. District Court Judge Lurana Snow ordered Fred Davis Clark Jr., 56, and Cristal R. Clark, 40, to be jailed until their trial on counts of mail and wire fraud, and obstruction of justice.

“The court specifically finds that there are no conditions … which reasonably will assure the defendant’s appearance as required,” Snow wrote in separate orders for each. She cited the Clarks’ history of island hopping from the Keys to the Turks and Caicos, to Grand Cayman and then to Roatan, Honduras.

Charges in the case stem from the Clarks’ management of CMZ Group Ltd., a Cayman Islands firm that operates a string of Caribbean pawn shops. They are charged with using two Key Largo bank accounts, opened during the Cay Clubs era, to illegally siphon off money from CMZ revenues.

The Clarks do not face any direct counts linked to Cay Clubs (he was president, his wife Cristal was a managing member and affiliate agent), which the feds have called a $300 million Ponzi scheme that ripped off 1,400 people. Its collapse in 2008 left hundreds of Florida Keys workers without jobs.

A civil fraud case lodged by the Securities and Exchange Commission over the resort developer’s failure was dismissed in June because prosecutors failed to act before a deadline in the statute of limitations. However, Snow cited the Clarks’ links to Cay Clubs in her order for pretrial detention.

“Government evidence establishes that monies obtained from later investors in Cay Clubs were used to pay earlier investors in a classic Ponzi scheme which eventually caused the collapse of Cay Clubs,” the judge wrote.

The Clarks’ passports have been revoked, and their $2.2 million “deposited in a Honduran bank account … has been frozen,” the detention order says.

Other information in the detention order:

— When the SEC filed its 2011 fraud case over Cay Clubs, the Clarks lived in Grand Cayman. Witnesses told investigators that Dave Clark, in fear of an asset seizure, “moved his family overnight from the Cayman Islands to Roatan.”

— Learning that arrest warrants were issued as part of the November 2013 indictment in the CMZ case, the Clarks “failed to appear for appointments to normalize their status in Honduras.”

— Dave Clark was arrested June 17 as he tried to enter Panama. When Honduran officers went to take Cristal Clark into custody, “Cristal locked herself inside her home in Roatan but eventually agreed to go with Honduran authorities.”

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