Executives charged in $300 million Ponzi scheme

Federal officials say today they've charged five former real estate executives in a $300 million Ponzi scheme in Florida, United States.

The Securities and Exchange Commission filed civil charges in Miami federal court today against former Cay Club president and CEO Fred Davis Clark Jr., chief accounting officer David W. Schwarz, manager and sales agent Cristal R. Coleman, sales director Barry J. Graham and sales director Ricky Lynn Stokes.

The SEC says Cay Clubs Resorts and Marinas took money from nearly 1,400 investors, touting the profitability of purchasing units at resorts in Florida and Las Vegas.

Instead of developing the properties, the SEC says the executives used new investments to pay earlier investors.

They also reportedly paid themselves salaries and commissions totalling more than $30 million.

The complaint seeks financial penalties from Clark, Coleman and Stokes and the return of ill-gotten gains from all five executives, the Associated Press reported.

In a separate statement, the SEC said that besides purchasing airplanes and boats, the executives misused investor money for unrelated business ventures including investments in precious metals and a liquor distillery that produced rum.

After Cay Clubs abandoned its operations in 2008, Clark and Coleman moved to the Cayman Islands and continued to dissipate assets and funnel at least $2 million to offshore accounts, the statement added.