(Reuters) - The former chief executive of a Florida-based resort company was found guilty on Friday on charges including bank fraud in connection with what authorities said was a $300 million real estate Ponzi scheme.
Fred Clark, the ex-chief executive of the now-defunct Cay Clubs Resorts and Marinas, was found guilty by a federal jury in Key West, Florida. The trial was Clark's second, after jurors deadlocked in his earlier one in August and acquitted his wife.
"We will not stand on the sidelines and allow individuals to defraud investors and financial institutions," U.S. Attorney Wifredo Ferrer in Miami said in a statement in announcing the verdict.
Clark's lawyer did not respond to a request for comment.
Prosecutors said Cay Clubs attracted nearly 1,400 U.S. investors for 17 locations in Florida, Las Vegas and the Caribbean.
The company raised more than $300 million from investors with promises to refurbish aging properties into luxury hotels, guaranteeing a 15 percent to 20 percent return as well as future income via a rental program, prosecutors said.
In reality, prosecutors said, Cay Clubs never developed the properties as promised, and the company came to use proceeds of sales to new investors to make payments to earlier investors, becoming a Ponzi scheme, prosecutors said.
Prosecutors said that as the company began experiencing financial difficulties in September 2006, Clark engaged in more than $20 million in fraudulent mortgage transactions, while living a lavish lifestyle.
Cay Clubs collapsed in July 2008. The U.S. Securities and Exchange Commission investigated and sued Clark and four other executives in 2013, but a federal judge in 2014 dismissed the case on statute of limitations grounds. The SEC is appealing.
A month after the civil case was tossed, Clark and his wife, Cristal, were in June 2014 apprehended in Central America to face U.S. criminal charges. Cristal Clark, who was also an executive, was acquitted at the earlier trial.
In his retrial, Clark was convicted of three counts of bank fraud, three counts of making a false statement to a financial institution, and obstruction of the SEC, prosecutors said.
Two other former Cay Clubs executives, Barry Graham and Ricky Stokes, pleaded guilty to conspiracy to commit bank fraud and were each sentenced in March to five years in prison.
The case is U.S. v. Clark, U.S. District Court, Southern District of Florida, No. 13-cr-10034.
(Reporting by Nate Raymond in New York; Editing by Lisa Shumaker)