- Associated Press - Thursday, September 18, 2014

KEY WEST, Fla. (AP) - Two people are facing fraud and other charges in the Florida Keys for operating what authorities say was a $300 million vacation rental scheme.

Federal prosecutors say Fred Davis Clark Jr. and Cristal Clark committed bank fraud through a company called Cay Clubs Resorts and Marinas, which supposedly specialized in turning dilapidated property into luxury resorts.

Investors were promised a payment of up to 20 percent of each upgraded unit’s sales price. But authorities say Cay Clubs never made the promised improvements and wound up using money from newer investors to repay older ones. Lending institutions were defrauded by false paperwork.

About 1,400 investors were defrauded.

The Clarks have pleaded not guilty in the case. They are being held without bail pending a trial in Key West federal court.

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