July 19--A former attorney for Cay Clubs Resorts and Marinas has been sued by a Fort Myers lawyer who accuses him of civil fraud for seizing control of her firm.
Charles P.T. Phoenix, based in Sanibel, received immunity from criminal prosecution in Cay Clubs matters in exchange for a March statement on the failed resort developer's business practices.
A federal judge has described Cay Clubs as "a classic Ponzi scheme" where "monies from later investors in Cay Clubs were used to pay earlier investors." The losses amounted to $300 million, authorities said, and there were some 1,400 victims.
As Cay Clubs collapsed in 2007 and 2008, hundreds of its Keys employees lost their jobs.
Former Cay Clubs executives "Dave" Clark, 56, and Cristal Coleman Clark, 41, formerly of Key Largo, are in federal custody, denied bond as serious risks of flight. They're charged with mail and wire fraud, and obstruction of justice, for a scheme involving Honduran pawn shops; money from the operation was sent to an Upper Keys bank account. They were arrested in June in Central America.
Their U.S. passports have been revoked and $2.2 million they have in a bank account has been frozen.
In the March statement to prosecutors with the U.S. Attorney's Office in Miami, Phoenix said he advised Cay Clubs President "Dave" Clark and other company executives that the company's sales pitch could violate federal laws on the sale of securities.
Phoenix said that Cay Clubs "ignored the advice" but he did not withdraw as attorney "because he enjoyed his generous remuneration and other benefits" from his job.
That job paid "$50,000 per month during certain periods between 2005 and 2007 when he served as general counsel and senior vice president."
In the statement, Phoenix acknowledged he failed to notify lenders that many Cay Clubs sales included unallowable "leaseback" payments to buyers and club membership fees as part of the mortgage in the buyers' purchase.
Phoenix is listed as "a member in good standing" of The Florida Bar.
"I am not aware of any complaints made by any [Cay Clubs] victim about Mr. Phoenix," Brian Tannebaum, an attorney representing Phoenix, said Friday.
"People who are outside the legal profession often do not understand how lawyers can do certain things, but those things often fall under attorney-client privilege," Tannebaum said. "It's not always simple in determining a lawyer's role and what he is required to do."
Jack Bridges, an Upper Keys attorney and former chairman of a disciplinary committee for The Florida Bar's 16th Circuit (Monroe County), said he cannot comment on a specific case.
However, cases involving knowledge of or participation in ongoing fraud could lead to ethical rulings "that may result in disbarment," Bridges said.
In the case filed in Lee County in November 2013, attorney Brenda Garretson said she entered into an agreement with Phoenix allowing him to assume management of her Rhodes Tucker and Garretson law firm on Marco Island.
Phoenix reportedly pledged to provide Garretson's health insurance and provide a share of the firm's fees from her cases.
Garretson said Phoenix failed to pay rent on the office, never paid her, and "hijacked" electronic and physical files.
When she complained, Garretson said Phoenix insulted her and sent e-mails "claiming that God spoke through him," according to the suit.
The case continues to work its way through Lee County court. Tannebaum said he is not representing Phoenix in the Garretson suit.
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