Professional Documents
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UN IT EI) STA TES D IST RICT C O UR T
SO UT H ER N DIST RICT O F FLO RID A
CASE NO.
13-10034-CR-JEM (s)(s)
22T 2 12215 d
STEVEN M .LARIMORE
CLERK U s DIST CT
s.D.ofdlA.-M/MI
18 U.S.C.j1349
18 U.S.C-j1344
18 U.S.C.j1014
18 U.S.C.j1341
18 U.S.C.j1512(c)(2)
18 U.S.C.j2
18 U.S.C.j981(a)(1)(C)
18U.S.C.j982(a)(2)(A)
U NITED STA TES O F A M ER IC A
VS.
JpM organ Chase Bank,N .A.(iilpM organ Chase'')and Fiflh rl-hird Bank,N .A.
(kls
-it-th Thirdf') were tinancial institutions with oftices in Florida and elsewhere, and whose
From in or around N ovem ber 2004,through in or around July 2008, Cay Clubs
Resorts and M arinas (t'Cay Clubf-) sold vondom inium units in purported luxury resorts
The term tim ortgage''was used in the realestate industry to refer to a loan to
tinance the purchase ofrealestatesusually w ith specified paym entperiods and interest rates, in
which the borrower/mortgagorgave the lender/m ortgageea lien on the property ascollateralfor
the loan.
item ized allaspectsoftheclosing forthe lender,including any paym entsmade by the borrower,
m oney dueto the seller,and anytkespaid to third partiesin connection with theclosing.
kkcash to close-'referred to the m onetary obligations to be m et by the buyer in
.
The term 'Vstraw buyer'' referred to a borrower who, for a fee or other benefst.
allow ed theiridentity and ereditto be used to obtain a m ortgage loan.
CM Z Group,LTD ,w as a Caym an Islands com pany, and along w ith its affiliates,
including CashW iz H oldings, LTD and lsland Elem ents, Cl, LTD (collectively, ':
CM Z''),
operated pawn shops in the Caribbean. CM Z generated revenue by purchasing gold from
custom ers and selling it to a third party for a profit. FR ED D AV IS C LA RK , JR . w as a
principalin CM Z and its predecessor entities from atleastin oraround O ctober20l0, through in
oraround January 2013.
10.
withabankaceountatBankofAmerica($BofA'-)inKeyLargo,Florida,endinginxl973
did willfully,that is,with the intentto further the objectofthe conspiracy,and knowingly
combine,eonspire,confederate,and agree wilh othersknown and unknown to the Grand Jury to
com m itan offense againstthe United States, thatis,to knowingly,and with the intentto defraud,
execute and cause the execution of a schem e and artitice to obtain any of the m oneys, funds,
unlawfully enrieh themselves by m isleading and defrauding lending institutions, by (a) using
haveloaned'
,(c)preparing and submittingtothelendersfalseand fraudulentHUD-IStatements
thatdid notaccurately reflectthe payments made by the borrower;and (d) diverting fraud
proeeedsfortheirpersonaluse and benefit,andto furtherthef'raud schem e.
M A N NER AN D M EA N S O F TH E C O N SPIR A CY
theobjectandpurposeoftheconspiracy included,amongothers,thefollowing:
FRE D DA V IS CLA R K , JR . and his conspirators w ould operate num erous
corporate entities using the nam e cay Clubs,''and w ould create bank accounts for each entity.
FRED D AV IS C LA R K ,JR .w ould have others listed as signatories oraccountholderson bank
Co-conspirators
prepared and caused to be prepared on behalf of the straw borrowers fraudulent loan
applications. w hich included false inform ation related to em ploym ent, Wages, aSSCtS and
such asJP M organ Chase,Fifth Third,and other lenders,including Countrywide Hom e Loans.
and fraudulently represented that the H U D-1 Statem ents accurately retlected a1l receipts and
disbursem ents m ade in the transactions. 'I-he l-ltqD-1 Statelments eoncealed the fact that the
borrower's down payment and cash to close obligations were paid by a Cay Clubs entity
controlled by FRED DA V IS CLA RK ,JR.
The iIU D-I Statem ents would failto disclose tsnancial inducem ents m ade to the
To suppol'
t certain of the false and fraudulent loan applications provided to
Forloans obtained in the names ofstraw borrowers, the borrow ers listed on the
loan applications did not m ake the m ortgage paym ents. lnstead,for a period of tim e ater the
transactions closed. FR ED D AV IS C LA R K ,JR .caused the m onthly m ortgage paym ents for
these loans to be paid from accounts he controlled. Subseqblently, FR ED D AV IS C LA RK ,
JR. stopped m aking the paym ents and the m ortgages w ent into toreclosure, resulting in
substantiallosses to the lenders.
During the schem e, FRED DAVIS CLA RK , JR. would make false and
t'
raudulent statem ents to others as to his incom e related to Cay Clubs as a m eans ofconcealing
his role in the fraud and use ofCay C lubsfunds to obtain loans forhis personalbenetst.
A1lin violation ofTitle l8,United States Code,Seetion l349.
C O U NT S 2-4
Bank Fraud
(18U.S.C.j 1344)
Paragraphs 1 through 8 of the General Allegations section of this Second
Superseding lndictm entarere-alleged and incop orated herein by reference.
Beginning in oraround N ovem ber2004,and continuing untilatleaslin or around
did knowingly and with the intentto detiaud,execute.and attem ptto execblte, and cause the
execution of,a scheme and artitsce to obtain any ofthe moneys,funds,credits, assets,securities,
or other property owned by, and under the custody and controlof, one or m ore t'inancial
institutions, including JP M organ Chase and Fifth Third, by m eans of false and fraudulent
himselfby misleading and detiauding lending institutions,by (a) using straw borrowers to
purchasecondominium unitsin investmentproperties;(b)sublnitting falseand fraudulentloan
applications and related docum ents to lending institutions, thereby inducing the lending
institutions to loan,in some transactions,m ore money than they otherwise would have loaned;
TH E SC H E M E AN D A RTIFIC E
otltheaforesaidschemeandartitscetodefraud,asmoreparticularlydescribedbelow:
g
. ..
..
. .
10/13/2006 W ire transfer of $51,778.40 for cash to close fbr loan from JP
M organ Chase of $1,100,000 in the nam e of Conspirator #1 for
11600 FirstA ve.G ulf,U nit41,M arathon,FL
10/26/2006 W ire transfer of $162,070.20 for cash to close for loan from .
1P
M organ Chase of $646,757 in the name of Conspirator //1,for 19
Som brero Blvd.,U nit426,M arathon,FL
l0/27/2006 W ire transfer of $235,258.45 for cash to close for loan from JP
M organ Chase in amountof $565,912 in the nam es of Conspirator
//2 and Conspirator //3 for 19 Som brero Blvd.,U nit432,M arathon,
171.
(18U.S.C.j 1014)
Paragraphs
FR ED DA V IS C LA R K ,JR .,
a/k/a iilave C lark,''
did knowingly and willfully make false statements in connection with a Ioan application and
loan,to a lsnancialinstitution,thatis,JP M organ Chase,the accountsand deposits ofw hich w ere
detkndantmadewith the intentto intluencethe action ofJP M organ Chase upon an application
fora loan and a loan,asspeeitied below by eount:
(18U.S.C.j 1349)
Paragraphs 9 through 13 of the General A llegations section of this Second
April20l3,in M onroe Cotm ty,in the Southel'n D istrictofFlorida,and elsew here,the defendant,
FR ED DA V IS C LA RK ,JR .,
a/lt/a dsD ave C lark,''
artit-iceto defraud and to obtain m oney and property by m eansofm aterially false and fraudulent
pretenses,representations.and prom ises,knowing that they were false and fraudulent when
m ade,and knowingly causing to bedelivered certain mailm atterby U.S.mailand by privateand
com m ercialinterstate carriers according to the directions thereon, for the purpose of executing
artificeto defraud,and to obtain money and property by m eansofm aterially false and fraudulent
pretenses,representations,and prom ises,knowing that they were false and fraudulent when
m ade, and transm itting and causing to be transm itted in interstate and foreign com m erce, by
m eans of wire com m unication. certain writings, signs, signals, picttlres and sounds, for the
purpose of executing the schem e and artitice, in violation of Title 18, U nited States
Section 1343.
PU R PO SE O F TH E C O N SPIM CY
lt was a purpose of the conspiracy for the defendant and his conspirators to
unlawfully enrich them selvesby lnisappropriation and diversion offundsowed to theirbusiness
partners and investors at CM Z and affiliated entities, to them selves, by concealing cash
withdrawals, transfers and paym ents of such funds to them selves or third parties tbr their
personaluse and benefit.
10
theobjectsandpurposeoftheconspiracyincluded,amongothers,thefollowing:
FR ED DA V IS CLA R K , JR . would m aintain bank accounts at BofA in Key
Largo,Florida,in 1he name ofCCC and DC6 (ithe Key Largo aeeounts''). The defendant
w ould receive m onthly bank statem ents and other correspondence via U .S.M ailby using a post
Caribbean,and shippingthese materialsto athird party sm elting plantin lllinois. These fundss
attimestotaling hundredsofthousandsofdollars perm onth,would then be transferred into the
Key Largo accounts.
the m almerin which the fundstransferred into the accounts were used. These representations
failed to disclose that the revenues of the company were subject to the personal and
tlndocum ented use by FR ED DA V IS C LA RK ,JR.and his fam ily m em bers.
FR ED DA V IS C LA R K JR . and his fam ily m em bers w ould m ake cash
withdrawals and electronic funds transfersfrom the Key Largo accounts fortheirown personal
use and benefit, including for consum er'goods. m eals, travel, entertainm ent, private school
tuition,and otherbusinessventures.
accounts,FRED DAV IS CLARK JR.and Conspirator//1 would execute phony agreem ents to
falsely explain and coneealhow the fundswere used.and to make the use offundsappearto be
rclated to a business purpose. FR ED D AV IS C LA R K JR . and Conspirator //1 w ould also
execute tax returns w ith false vlaim s of em ploym entand business expenses, to m ake it appear
thatthe personaluse of funds from the accounts constituted em ploym ent incom e from CM Z or
w ere business expensesofthe CCC and D C6 entities.
Shortly before the SEC tsled an action againsthim on January 30,2013, FRED
D AV ID C LA RK ,JR .inform ed the otherprincipals ofCM Z that he w ould be sued by the SEC .
FRED DA V IS CL AR K ,JR.then executed an agreem entw ith CM Z to be paid forhisinterestin
the entity w ithout disclosing the diversion a'
nd m isappropriation of funds that FR ED D AV IS
that interest in an amount far in excess of whathe would have received but for the hidden
diversion of funds,false statem ents,and concealm entof m aterial infonnation during the course
ofthe schem e.
10.
12
for copies of the Key Largo account statem ents. FRED DAVIS CLARK, JR. directed
lndividual//1and lndividual//2 notto providea copy to CM Z to avoid detection ofdefendant's
fraudulentconduct.
(18U.S.C.1 1341)
Paragraphs 9 through 13 of the G eneral A llegations section of this Second
Superseding lndictm entare re-alleged and incorporated herein by reference.
did knowingly and with intentto defraud.devise and intend to devise a sehem e and artifice to
detiaud and to obtain m oney and property by m eans ofm aterially false and fraudulentpretenses.
representations.and prom ises, know ing that the pretenses, representations. and prom ises were
TH E SC H EM E AN D A R TIFICE
JR.,tbrthe purpose of executing and in furtherance of the afbresaid schem e and artifice to
defraud and to obtain money and property by meansofmaterially false and fraudulentpretenses,
representations and prom ises, know ing that they were false and fraudulent w hen m ade, did
knowingly cause to be delivered by U.S.m ailand by private and comm ercialinterstate carrier,
according to the directionsthereon,the itemsidentifsed below in each count:
10
11
(18U.S.C.j 1512(c)(2))
The General Allegations section of this Second Superseding Indictm ent is
re-alleged and incorporated herein by reference.
From at least on or about M ay 13,2011,through at least on or about April 22,
2013,in M iam i-D ade County,in the Southern D istrictofFlorida,and elsew here,the detkndant,
14
FR ED D A VIS C LA R K ,JR .,
a/k/a slave C lark,''
lnviolation ofTitlel8,UnitedStatesCode,Sectionsl5l2(c)(2)and2.
FO RFEIT UR E
(18U.S.C.jj981(a)(1)(C)& 982(a)(2)(A))
The G eneral A llegations sed ion,and the allegations of C ounts l through 12 of
this Scond Superseding Indictm entare re-alleged and incorporated herein by retkrence for the
15
d.
lsland A ttorneys at the direction of Fred D avis Clark,Jr.,to a Scotia Bank account ending in
x8056,
.and
16
depositedwithathirdparty;hasbeenplaeedbeyondthejurisdictionoftheCourt;has been substantially diminished in value;or,has been comm ingled with other property which cannotbe
subdivided w ithoutdiftsculty;it is the intentofthe United States to seek the fort-eiture of other
AllpursuanttoTitle l8,UnitedStatesCode,Sections981(a)(l)(C)and982(a)(2)(A),and
the procedures setforth in Title 21,United StatesCodesSection 853.
A TRU E BIL1w
FO REPER SO N
W IFREDO A . FERR ER
*
N
UN ITED STATES ATTO RN EY
JER O DU FFY
THO A S A .W A TTS-FITZG ERA LD
ASSISTANT UNITED STA'INES A'FTORNEYS
M ICIIA EL D .PA DU LA
SPECIA L A SSISTA N T ITN ITED STA TES A TTO RN EY
CASENO.
13-10034-CR-JEM(s)(s)
VS.
CERTIFICATE OFTRIALATTORNEY*
FRED DAVIS CLARK,1R.
Defendant.
CourtDivision:(Selectone)
M iam i
FTL
New Defendantts)
Key W est
W PB
Yes
12
1do herebycertifythat:
Ihave carefully considered the allegations ofthe indictm ent,the num berofdefendants, the numberof
probablewi
tnessesand the IegalcomplexitiesoftheIndictment/lnformation attachedhereto.
Iam aware thatthe inform ation supplied on this statem entwillbe relied upon by the Judges ofthisCourtin
setting theircalendars and scheduling crim inaltrials underthe m andate ofthe Speedy TrialAct, Title 28
U.S.C.Section 3161.
Interpreter: (YesorNo)
ListIanguageand/ordialect
NO
0 to 5 days
6 to 10 days
11to 20 days
21to 60 days
61 daysand over
6.
Ifyes:
Judge:
Petty
M inor
X
M isdem .
Felony
Hasthiscasebeenpreviousl
yfiledinthisDistrictCourt? (YesorNo) Yes
Hon.Jose E.M artinez
Hasacomplaintbeenfiledinthismatter?
(YesorNo)
Ifyes:
M agistrate Case No.
Related M iscellaneous num bers:
Defendantts)infederalcustodyasof
Defendantts)instatecustodyasof
No
une ,
Isthisapotentialdeath penaltycase?(YesorNo)
Dlstrlcto
No
Doesthis case originate from a matterpending in the Northern Region ofthe U.S.Attorney's Office priorto
October14,2003?
Yes
X
No
Does this case originate from a m atterpending in the CentralRegion ofthe U.S,Attorney's Office priorto
Septem ber1,2007?
Yes
X
No
*penaltySheetts)attached
JER B U FY
ASS TA T UNITED STATES ATTORNEY
Cou tI # A5501106
PENALTY SHEET
Defendant'sN am e:FR ED D A V IS C LA R K .JR .a/k/a iklave C lark''
Count#:1
Conspiracy to Com m itBank Fraud
Title 18,United States CodesSection 1349
*M ax.Penalty: Thil'ty(30)yearsimprisonment
Counts#:2-4
Bank Fraud
*Max.Penalty: Thil'
ty(30)yearsimprisonment
Counts #:5-7
*M ax.Penalty: 'l'
hil'ty (30)yearsimprisonm ent
Count#:8
CaseNo:13-10034-CR-JEM (s)(s)
Counts#:9-11
M ailFraud
*M ax.Penalty: Twenty(20)yearsimprisonmentastoeachcount
Count#:12
ObstructionOfOfticialProceeding
Title 18,United StatesCode,Section 1512(c)(2)