The latest alleged bout of bad behavior zeroes in on Cay Clubs Resorts and Marinas. The SEC  filed a civil complaint against five former real estate executives who allegedly ran a Ponzi scheme that raised more than $300 million from almost 1,400 investors.   

The executives named in the suit include Fred Davis Clark Jr.,  President and CEO, David Schwartz, the chief accounting officer, Cristal Coleman, a manager and sales agent, Barry Graham, a sales director, and Ricky Lynn Stokes, also a sales director.  

Those executives paid themselves, “exorbitant salaries and commissions totaling more than $30 million,” according to the suit. The SEC complaint says the Ponzi scheme started in 2004 when the five executives began raising money from investors with “promise of guaranteed income, instant equity in undervalued properties, historic appreciation and at least $30,000 in upgrades to units they (investors) purchased at Cay Clubs resorts locations in Florida and Las Vegas.”  

The SEC says Cay Clubs promises triple-digit returns and that Cay Clubs was a “very stable financially healthy company worth billions.” 

Far from it, according to the SEC, which claims Cay Clubs continued to lure new investors despite the fact the company’s financial condition deteriorated so much that it did not have enough money to make the “guaranteed” rental payments to investors whose units were being leased to tourists.  

Investigators say Clark, Coleman and Schwarz misappropriated millions of dollars in investor funds. That money was spend on airplanes, boats and unrelated business ventures including investments in precious metals and a liquor distillery that produced Pirates Choice Rum.  

Cay Clubs abandoned operations in 2008, forcing several of the investor-owned properties into foreclosure. Two of the executives, Clark and Coleman, got married. They moved to the Cayman Islands and continued to funnel investor funds in to off shore accounts.

Adam Shapiro joined FOX Business Network (FBN) in September 2007 as a New York based reporter.