NBC6 Miami: Cristal Clark acquitted in Cay Clubs fraud case, mistrial in husband Dave's case

A judge declared a mistrial Friday in the case of a former Keys businessman charged with operating a $300 million vacation rental fraud scheme, NBC6 Miami reported.

U.S. District Judge Jose E. Martinez made the ruling after jurors deadlocked on their fourth day of deliberations in the case of Fred 'Dave' Clark Jr., the former president of now-defunct Cay Clubs Resorts and Marinas, based in Tavernier. His wife, Cristal Clark, a top sales agent, was acquitted on all counts, the station reported.

Defense attorneys for company founder Fred D. "Dave" Clark, 57, and wife Cristal Coleman Clark, 41, a Cay Clubs manager, rested their case last Thursday.

After U.S. District Judge Jose E. Martinez denied the defense's motion for a directed acquittal, the prosecution and defense made their closing arguments Monday.

The primary counts against the Clarks accused them of bank fraud by providing false information and artificially inflated property values to obtain mortgages for buyers of the condo-hotel units, and using the mortgage payouts for unpermitted expenses

Cay Clubs, founded in 2004 and based in the Upper Keys, aimed to convert existing resorts in the Keys, Clearwater and Las Vegas into luxury condo-hotels. Buyers for individual units were solicited with forecasts of high income from future rentals.

By 2008, the firm failed under pressure to meet financial commitments and the inability to perform promised renovations. Banks and about 1,400 investors lost an estimated total of $300 million.

It became a Ponzi scheme when Cay Clubs executives realized by mid-2005 that Cay Clubs "was not the successful business [the Clarks and salesmen] claimed it was," prosecutors said in a filing. "By April 2005, in Ponzi scheme fashion, [Cay Clubs] began using new investor funds to pay leaseback returns to earlier investors."

Undisclosed insider sales between company executives created a bogus record of skyrocketing property value, prosecutors argued. Other expenses, including leaseback payments to the buyer, were improperly included in the mortgage.

During the five-week trial that opened July 8, online court documents indicate many of the court arguments centered on the relevance of expert witnesses and admissibility of records, including e-mails.

The Clarks also are charged with mail fraud in connection with the use of a Tavernier mailing address to skim money from a Cayman Islands pawn-and-loan business they co-owned with other investors. The U.S. Marshals Service took them into custody in Central America last year.

Two former Cay Clubs executives got five years in federal prison in exchange for testifying against the Clarks.