SEC Says Ponzi Schemes Still Not Okay - 5 Real Estate Executives Charged

The SEC charged five former real estate executives who defrauded investors into believing they were funding the development of five-star destination resorts in Florida and Las Vegas when they were actually buying into a Ponzi scheme. The SEC alleges that Cay Clubs Resorts and Marinas raised more than $300 million from nearly 1,400 investors nationwide through a network of hundreds of sales agents, marketing seminars, and podcasts touting the profitability of purchasing units at Cay Clubs resort locations. Instead of using investor funds to develop resort properties and units, executives used investor deposits to pay themselves more than $30 million, buy boats and airplanes, and pay leaseback returns to earlier investors.

The SEC's complaint filed in U.S. District Court for the Southern District of Florida charges the following former Cay Clubs executives:

• Fred Davis Clark, Jr. - president and CEO
• David W. Schwarz - chief accounting officer
• Cristal R. Coleman - manager and sales agent
• Barry J. Graham - sales director
• Ricky Lynn Stokes - sales director

See: SEC Complaint (links externally to SEC website).