Jury finds Cay Clubs executive guilty in fraud case

One of the principals in a now infamous Florida Keys real estate criminal fraud case has been found guilty of two counts of bank fraud and one count of conspiracy to commit bank fraud.

A federal jury in Miami deliberated for less than a day last week before finding David Schwarz guilty in what was one of the biggest criminal real estate fraud cases in recent decades in the Florida Keys.

In 2020, the 11th Circuit Court of Appeals in Atlanta overturned the conviction of Schwarz on charges of conspiracy and bank fraud. The appeals court criticized trial Judge Michael Moore for not granting Schwarz continuances to postpone the trial in order to give his solo defense attorney more time to research the case and prepare his defense.

Cay Clubs were major players in the local real estate and resort industry for several years in the early 2000s.

Schwarz held a one-third ownership stake in and served as the chief financial officer of Cay Clubs Resorts and Marinas from 2004 to 2007, according to court documents. His business partner, Fred Davis Clark Jr., held a two-thirds ownership interest and served as the chief executive officer.

Their purported goal was to develop multiple amenity-rich luxury resorts and to sell condominium units within those resorts to buyers. The business eventually employed more than 1,000 people, sold more than 1,100 condo units, amassed gross revenues between $700 million to $800 million, and was once estimated to be worth $400 million, but it failed in 2008, according to court records.

In 2015, a jury found Clark guilty of bank fraud, making false statements in connection with federally insured loans and obstructing an official proceeding.

Prosecutors alleged that the conspirators paid the mortgage payments out of Cay Clubs accounts for at least some of the nominee loans. The alleged victims of this fraud included JP Morgan Chase Bank, N.A. and Fifth Third Bank, N.A., according to court documents.

Meanwhile, according to the indictment, Clark and Schwarz were funneling cash out of Cay Clubs for their personal gain, prosecutors charged. Clark and Schwarz attempted to conceal their ill-gotten gains by, among other things, paying Clark's salary to Cristal Coleman, Clark's then-girlfriend; by failing to report income from Cay Clubs on their tax returns; and by failing to file tax returns for Clark and Cay Clubs. The government alleged that Schwarz interfered with the administration of internal revenue laws by submitting a W-2 purporting to show wages paid to Cristal Coleman Clark to conceal wages earned by Clark.

A jury found Coleman Clark, 41, not guilty on all nine conspiracy and fraud related counts, according to federal court records.

In 2020, former President Donald Trump commuted the remaining sentence of Clark after serving six years of a 40-year prison sentence. Clark had been sentenced to federal prison for bank fraud in December 2015.

Clark was also ordered to turn over about $304 million for bank fraud and $3.3 million for obstructing the U.S.

Securities and Exchange Commission.

In addition, the judge ordered the forfeiture of specific overseas assets totaling about $2.6 million.

Trump commuted Clark's remaining term of incarceration after serving more than six years in federal prison for a first-time, non-violent offense.

Clark's commutation was supported by Professor Alan Dershowitz, Ken Starr, the Aleph Institute, his family of seven children and former business colleagues and investors, among others. [email protected]