indictment

UNITED STATES DISTRICT COURT

SOUTHERN ST CT OF FLRRIPA ,,. -----,-,,-,-,-- . . .. ,-; r-y --.,- j- (,$ yjy ,à)j,j,,-,,,,;à?,. .t. .w

s Jk k k ;s , xCASE NO.

'-

18 U.S.C. 5 134918 U.S.C. 5 1341 . .-;t

iiq.. . .-.

- !1-

--

- --$L.y-18 U.S.C. 1 1512(c)(2)

18 U.S.C. 5 218 U.S.C. j 981(a)(1)(C) :' . ''hJ '*g/' . uj *' W* # t/pt j ' ip . <, *' ' '% : ' j4 <*' w -*A1*, .ù z .'.. . kj . . ., V . . n9 j, .. y . f y 7. ; y j : .)'* t ' :k %' $ '' 17.'.4 ' : * 4 ' 'î c 'F

4 -.1 N'*> ''F'' * ' '.

à. i.. j . ''$ 3.q . lk pv CK . x%.. ..k '$ e v * ., '. H '.i. +

'

Akx .u. z &

'

UNITED STATES OF AM ERICA

VS. '

FRED DAVIS CLARK, JR.,

a/k/a isDave Clark,'' and

CRISTAL R. CLARK,a/k/a Sécristal R. Colem an,''

Defendants./

INDICTM ENT

The Grand Jury charges that:

GENER AL ALLEGATIONS

At times material to this lndictment:

From in or around November 2004, through in or around July 2008, Cay Clubs

Resorts and Marinas (1$Cay Clubs''), raised more than $300 million from approximately 1,400

investors tlarough the sale of tmits in purported luxuz.y resorts nationwide, including in Key

Largo, Florida. Defendant FRED DAVIS CLARK, JR. was the President of Cay Clubs and

defendant CRISTAL R. CLARK was a managing member and registered agent of certain

affiliated entities.

CM Z Group, LTD, was a Cayman Islands com pany, and along with its affiliates,

including CashWiz Holdings, LTD and lsland Elements, Cl, LTD (collectively, $1CMZ''),

Case 4:13-cr-10034-JEM Document 3 Entered on FLSD Docket 11/27/2013 of 15

operated pawn shops in the Caribbean and generated revenue by, among other things, the

smelting of gold and other precious metals purchased by the pawn shops. FRED DAVIS

CLARK, JR. was a principal in CM Z and its predecessor entities from at least in or around

October 2010, through in or around January 2013.

3. Cristal Clear Charters, LLC (tûCCC''), was a Florida limited liability company

with a bank account at Bank of America ($%BofA'') in Key Largo, Florida, ending in x1973.

CRISTAL R. CLARK was the listed manager of CCC.

4. DC6, LLC C1DC6''), was a Florida limited liability company with a bank account

at BofA in Key Largo, Florida, ending in x2558. CRISTAL R. CLARK was the listed

manager of DC6.

5. Funds generated during the operation of Cay Clubs, and later, during the

operation of CM Z, were deposited into the CCC and DC6 bank accounts which were controlled

by FRED DAVIS CLARK, JR. and CRISTAL R. CLARK.

U.S. Securities and Exchange Commission

($ûSEC''), as part of official investigation number No. F1.-03343 into alleged securities fraud at

Cay Clubs, took the deposition of FRED DAVIS CLARK, JR. at the SEC'S offices in M iami,

l ida CLARK who was then residing in ihe Cayman Islands, testified conceming hisF or . ,

On or about M ay 13, 201 1, the

income and the location of any bank accounts, funds or assets within his possession, custody or

control.

On or about January 30, 2013, the SEC filed a civil fraud action in the Southem

District of Florida styled SEC v.Barry J Graham, et al., No. 13-1001 I-CV-JLK (the tISEC

Fraud Adion''), in which FRED DAVIS CLARIG JR. and CRISTAL R. CLARK were named

defendants and, among other things, were alleged to have unjustly emiched themselves through


their pm icipation in a stcurities fraud schtme at Cay Clubs. At approximately the same time

as the filing of the SEC Fraud Action, FRED DAVIS CLARK, JR. separated from the CMZ

business pursuant to an agreement in which CMZ agreed to pay him nearly $5 million in

installments.

8. Beginning on or about January 31, 2013, and continuing through at least in or

around April 2013, FRED DAVIS CLARK, JR. caused a series of funds transfers from the

Cayman Islands to third party accounts in the Republic of Honduras, and elsewhere, including a

sum of $1,699,675 on or about April 22, 2013, to a bank account in the name of a company

controlled by FRED DAVIS CLARK, JR. at Banco Davivienda, ending in x4611, in Roatan,

Honduras.

CO UNT 1

Conspiracy to Com m it M ail and W ire Fraud

(18 U.S.C. 5 1349)

1. The General Allegations section of this lndictment is re-alleged and incorporated

herein by reference.

Beginning in or around October 2010, and continuing thereafter until at least in or

around April 2013, in M onroe County, in the Southern District of Florida, and elsewhere, the

defendants,

FRED DAVIS CLARK, JR.,a/k/a dçDave Clark,'' and

CRISTAL R. CLARK,a/k/a çscristal R. Colem an,''

did willfully, that is, with the intent to further the objects of the conspiracy, and knowingly

combine, conspire, confederate, and agree with each other and others known and unknown to the

Grand Jury:

a) to knowingly and with intent to defraud, devise and intend to devise a scheme and


artifce to defraud and to obtain money and property by means of materially false and fraudulent

pretenses, representations, and promises, knowing that they were false and fraudulent when

made, and knowingly causing to be delivered certain mail matter by U .S. mail and by private and

commercial interstate carrier, according to the directions thereon, for the purpose of executing

the scheme, in violation of Title 18, United States Code, Section 1341; and

b) to knowingly and with intent to defraud, devise and intend to devise a scheme and

artifice to defraud, and to obtain money and property by means of materially false and fraudulent

pretenses, representations, and promises, knowing that they were false and fraudulent when

made, and transmitting and causing to be transmitted in interstate and foreign commerce, by

means of wire communication, certain writings, signs, signals, piduresand sounds, for the

purpose of executing the scheme and artifice, in violation of Title 18, United States Code,

Section 1343.

PURPOSE OF THE CONSPIRACY

It was a purpose of the conspiracy for the defendants and their conspirators to

unlawfully emich themselves by misappropriation and diversion of funds owed to their business

partners and investors at CM Z and affiliated entities, to themselves, by concealing cash

withdrawalss transfers and payments of such funds to themselves or third parties for their

personal use and benefit.

M ANNER AND M EANS OF THE CONSPIRACY

The malmer and means by which the defendants and their conspirators sought to

accomplish the objects and pupose of the conspiracy included, among others, the following:

FRED DAVIS CLARK, JR. and CRISTAL R. CLARK would maintain bank

accounts at BofA in Key Largo, Florida, in the name of CCC and DC6. The defendants would

receive monthly bank statements and other correspondence via U.S. M ail by using a post oftsce

4


box they controlled, located at P.O. Box 1 1 19, Tavernier, Florida, 33070, among other places.

Funds were generated from the operation of the business of CMZ and its affiliates

by obtaining raw materials including gold and precious metals from pawn shops in the

Caribbean, and shipping these materials to a third party smelting plant in Illinois. These funds,

at times totaling hundreds of thousands of dollars per month, would then be transferred into the

CCC and DC6 BofA accobnts.

6. CM Z and its affliates, including CashW iz Holdings Ltd., had investors and

auditors who were provided with false and misleading infonnation concerning the revenues and

eamings related to the pawn shops, including funds generated from the smelting operations.

FRED DAVIS CLARK, JR. and others acting at his direction would make false and misleading

representations to current and prospective investors and outside auditors concerning the internal

controls that existed at the business, and would represent that a11 material information related to

the operations and revenues of CashW iz Holdings Ltd. was disclosed in financial reports.

These representations were false and misleading as they failed to disclose that a significant

portion of the revenues of the company were subject to the personal and undocumented use by

FRED DAVIS CLARK, JR. and CRISTAL R. CLARK.

FRED DAVIS CLARK JR. and CRISTAL R. CLARK or individuals reporting

to them would make cash withdrawals and electronic funds transfers from the CCC and DC6

accounts at BofA for their own personal use and benefit, but would not disclose the BofA bank

statements or the extent of their personal use of the funds to others at CMZ and its affiliates,

including investors and outside auditors. FRED DAVIS CLARK JR . and CRISTAL R.

CLARK would ultimately cause a portion of the funds that were deposited into the CCC and

DC6 accounts to be transferred back to CM Z and its affiliates via interstate and international


wire transfers, but only after FRED DAVIS CLARK JR . and CRISTAL R. CLARK first

siphoned off whatever amounts they decided to spend for themselves.

8. FRED DAVIS CLARK JR. and CRISTAL R. CLARK would divert for their

own personal use substantial sums from the CCC and DC6 accounts that were otherwise due to

CM Z and its aftiliates, including forconsumer goods, meals, travel, entertainment, private

school tuition, and other business ventures.

9. W hen questions were asked by the principals, investors or outside auditors of

CMZ and its affliates for an accounting of the use of funds or expenses related to the the CCC

and DC6 accotmts, FRED DAVIS CLARK JR. and CRISTAL R. CLARK and their

conspirators would provide a phony agreement they had executed and explain that the accounts

were ç%pass-through'' accounts to minimize and conceal the extent of the diversion of such funds.

On separate occasions when it was to their benetit, FRED DAVIS CLARK JR . and CRISTAL

R. CLARK would execute an additional false agreement among themselves but with the same

date as the earlier agreement, that appeared to allow for higher fees and expenses to be deducted

from the pawn shop revenues than those listed in the earlier agreement. Defendants would use

the second phony agreement to explain their personal use of funds in the CCC and DC6

accounts, and to claim that these expenditures were business expenses of CCC and DC6, or of

CM Z and its affliates. These phony documents, combined with false and misleading

statements made by FRED DAVIS CLARK JR. and persons acting at his direction, gave the

impression that all or nearly all of the funds deducted from the CCC and DC6 accounts were

related to actual expenses of CCC or DC6, such as wire transfer fees or administrative filing fees,

and were related to the business of CM Z and its affiliates.

10. Defendants were made aware prior to January 20 13 that they would be sued by


the SEC in the SEC Fraud Action, including through formal written notice provided to their

attomeys dated November 29, 2012 and December 7, 2012. FRED DAVIS CLARK, JR.

concealed this information from CMZ and its affiliates, including the auditors, investors and

potential investors of the affiliated entities.

Shortly before the SEC tsled the SEC Fraud Action on January 30, 2013, FRED

DAVID CLARK, JR. tirst informed the other principals of CMZ that he would be sued by the

SEC. FRED DAVIS CLARK, JR. then executed an agreement with CM Z to be paid for his

interest in the entity without disclosing the diversion and misappropriation of funds that FRED

DAVIS CLARK JR. and CRISTAL R. CLARK had caused from the pawn shop revenues and

CMZ'S other business accounts from approximately Odober 2010 tk ough approximately

January 2013. In this way, FRED DAVIS CLARIG JR. caused CMZ and its affiliates to value

his interest in the business and pay him for that interest in an amount far in excess of what he

would have received but for the hidden diversion of funds, false statements, and concealment of

material information during the course of the scheme.

On or about February 27, 2013, before a payment of nearly $2 million was to be

madt to FRED DAVIS CLARK, JR. as part of his separation agreement, questions were asked

by the CM Z principals regarding the potential diversion of funds by defendants through the CCC

and DC6 accounts. The CM Z principals made a request to D.S. and N.W ., persons who acted

at the direction of FRED DAVIS CLARK JR. and CRISTAL R . CLARK but were employed

by CM Z, for copies of the CCC and DC6 bank statements, which these persons could access.

FRED DAVIS CLARK, JR. directed D.S. and N.W . not to provide a copy of these bank

statements to CMZ and its affiliates in order to avoid detection of defendants' fraudulent conduct

before the $2 million payment was in hand.


A11 in violation of Title 18, United States Code, Section 1349.

CO UNTS 2-4

M AIL FR AUD

(18 U.S.C. 5 1341)

1. The General Allegations section of this Indictment is re-alleged and incorporated

herein by reference.

2. Beginning in or arotmd October 2010, and continuing thereaher until at least on

or about April 2013, in M onroe County, in the Southern District of Florida, and elsewhere, the

defendants,

FRED DAVIS CLARK, JR.,

a/k/a ésDave Clark.'' and

CRISTAL R. CLARK,

a/k/a Rcristal R. Coleman,''

did knowingly and with intent to defraud, devise and intend to devise a scheme and artifce to

defraud and to obtain money and property by means of materially false and fraudulent pretenses,

representations, and promises, knowing that the pretenses, representations, and promises were

false and fraudulent when made, and knowingly caused to be delivered certain mail matter by U.S.

mail and by private and commercial interstate carrier, according to directions thereon for the

purpose of executing the scheme and artifice.

PURPOSE OF THE SCHEM E AND ARTIFICE

3. lt was a purpose of the scheme and artitsce for the defendants and their

accomplices to unlawfully enrich themselves by misappropriation and diversion of ftmds owed to

their business partners and investors at CMZ and affliated entities, to themselves, by concealing

cash withdrawals, transfers and payments of such funds to themselves or third parties for their

personal use and benefit.

8


TH E SCHEM E AND ARTIFICE

4. Paragraphs 4 through 12 of the M armer and M eans section of Count 1 of this

lndictment are realleged and incorporated herein by reference as a description of the scheme and

artifice.

USE OF TH E M AILS

5. On or about the dates specitied as to each count below, FRED DAVIS CLARK

JR. and CRISTAL R. CLARK, for the pupose of executing and in furtherance of the aforesaid

scheme and artifice to defraud and to obtain money and property by means of materially false and

fraudulent pretenses, representations and promises, knowing that they were false and fraudulent

when made, did knowingly cause to be delivered by U.S. mail and by private and commercial

interstate canier, according to the directions thereon, the items identified below in each count:

COUNT APPROX. DATE DESCRIPTION O F M AILING

Bank statement for CCC BofA account ending in x1973,2 November 30, 2010 d

elivered via U.S. m ail to P.O. Box 1 1 19, Tavem ier,

Florida, 33070

Bank statement for CCC BofA account ending in x1973,3 March 31, 201 1 d

elivered via U.S. mail to P.O. Box 1 1 19, Tavemier,

Florida, 33070

Bank statement for CCC BofA account ending in x1973,4 May 31, 201 1 d

elivered via U.S. mail to P.O. Box 1 1 19, Tavernier,Florida, 33070

In violation of Title 18, United States Code, Sections 1341 and 2.

COUNT 5

Obstruction of Official Proceeding

(18 U.S.C. j 1512(c)(2))

The General Allegations section is re-alleged and incop orated herein by1.

reference.

From at least on or about M ay 13, 201 1, through at least on or about April 22, 2013,

9


in M inmi-Dade County, in the Southern District of Florida, and elsewhere, the defendant,

FRED DAVIS CLARK, JR.,a/k/a çdDave Clark,''

did corruptly obstruct, iniuence, and impede, and endeavor to obstruct, intluence, and impede,

the due and proper administration of the law under which a pending proceeding was being

conducted, specitically to frustrate the ability of the U. S. Securities and Exchange Commission,

an agency of the United States, in relation to official investigation number No. FL-03343, to

investigate the fraud alleged in SEC v. Barry J Graham, et aI., No. 13-1001 I-CV-JLK (S.D.

F1a.), and identify income, assets and bank accounts attributable to defendants, and othem ise

trace proceeds of the alleged fraud, to wit, by providing false and misleading testimony,

engaging in certain financial transactions, using shell entities, and other conduct designed to

conceal the source, location and control of income, assets and funds owned and controlled by

FRED DAVIS CLARK, JR.

ln violation of Title 18, United States Code, Sections 1512(c)(2) and 2.

FORFEITURE

(18 U.s.C. 1 981(a)(1)(C))

The General Allegations section, and the allegations of Counts 1 through 5 of this

Indictment are re-alleged and incorporated herein by reference for the purpose of alleging

forfeiture to the United States of America, of property in which one or more of the defendants

have an interest.

2. Upon conviction of any of the offenses alleged in Counts 1 through 5 of this

Indictment, FRED DAVIS CLARK JR. and CRISTAL R. CLARK shall forfeit to the United

States any property, real or personal, which constitutes or is derived from proceeds traceable to

the offense of conviction or conspiracy to commit such offense.


3. The property subject to forfeiture shall include, but is not limited to:

a sum of money equal in value to the proceeds traceable toa.

including but not limited to a sum of approximately $2,915,000;

the offensets),

b. a sum of approximately $1,699,675 transferred on or about April 22, 2013 to a

bank account in the name of Dinero Shop, SA at Banco Davivienda, ending in x461 1, in Roatan,

Honduras.

a sum of approximately $125,000 previously located in a bank account owned or

controlled by FRED DAVIS CLARK, JR. and/or CRISTAL R. CLARK at Banco Davivienda,

in Roatan, Honduras.

a sum of approximately $452,519.52 previously located in a bank account owned

or controlled by FRED DAVIS CLARK, JR. and/or CRISTAL R. CLARK at Banco

Davivienda, in Roatan, Honduras.

4. Pursuant to Title 21, United States Code, Section 853(p), made applicable through

Title 28, United States Code, Section 2461, if any property described above as being subject to

forfeiture, as a result of any act or omission of the defendants,

cannot be located upon due diligence;

(B) has been transferred, or sold to, or deposited with a third party;

(C) has been placed beyond thejurisdiction of the Court;

(D) has been substantially diminished in value; or

(E) has been commingled with other property which calmot be

subdivided without difficulty;

it is the intent of the United States to seek the forfeiture of other property of the defendants up to

the value of the above-described forfeitable property.


All pursuant to Title 18, United States Code, Section 98 1(a)(l)(C), and the procedures set

forth in Title 21, United States Code, Section 853.

A TRUE BILL

beREAERSON

i

W IFRE O A. FERRER

UN ITED STATES ATTORNEY

JE DUF YASS S ANT UNITED STATES ATTORNEY


indictment

Documents

deposition of fred davis

controlledby fred davis

ddave clark

ida clark

fred davis clarig

fred davisclark

dc6 bank accounts

southemdistrict of florida