The chief financial officer of Cay Clubs Resorts and Marinas, once one of the largest employers in the Florida Keys, has been convicted of numerous charges connected to fraud at the company that netted him tens of millions of dollars.
David W. Schwarz, 60, of Orlando, owned a third of the company, and along with his co-owner, he duped 1,400 investors out of $300 million over the course of four years.
Cay Clubs was advertised as having luxury resorts in the Florida Keys, Clearwater, Orlando, Las Vegas and other locations.
During the operation of the company from 2004 to 2008, Shwarz and Fred Davis Clark Jr., siphoned off $30 million, which they used for their own purposes, court documents said.
The two purchased property and other businesses, including a gold mine, rum distillery, aircraft and a coal reclamation business, officials said.
The two were supposed to use investors’ money to upgrade the Cay Clubs Resorts and Marinas properties, officials said.
As time went on and sales declined due to the dilapidated condition of the properties, the pair would sell the properties to insiders, including some of Clark’s family members, and used the loan funds to pay off other debts, court documents said.
During the course of the scheme, Schwarz and Clark did not file corporate income tax returns on $74 million in income generated by Cay Clubs entities, investigators said.
Neither man filed personal income tax returns during the same time, court documents said.
Clark, 59, formerly of Tavernier, was convicted in December 2015 of bank fraud charges and obstruction of the U.S. Securities and Exchange Commission.
He was sentenced to 40 years in federal prison.
Former Cay Clubs sales executives Barry Graham, 59, and Ricky Lynn Stokes, 54, pleaded guilty to conspiracy to commit bank fraud in related cases.
They were sentenced to 60 months and 30 months in prison, respectively.
Schwarz was convicted Monday on two counts of bank fraud and interference with the administration of the IRS.
He will face up to 63 years in prison when he is sentenced in May.
About the Author
