The president of the Fort Lauderdale-based Water Club Holdings has been indicted by a federal grand jury in Connecticut and charged with defrauding investors in his company. According to the Sun Sentinel, Andrew Deme and unidentified co-conspirators allegedly took “approximately half of all money paid by investors” for personal use.

Deme, according to the paper, was arrested in Fort Lauderdale and released on a US$100,000 bond. An arraignment has yet to be scheduled at the US District Court in Connecticut.

According to the paper, documents describing a 5m share public offering in Water Club Holdings “falsely represented” that investor money would be used to develop a yacht charter business and establish a club where members could access a fleet of yachts. Its website reads: “Members will have access to a fleet of different sized yachts in different first tier destinations around the world. All your vacation preferences are logged and tracked with a dedicated Yacht Concierge so when you arrive, you know that the crew is ready to cater to your every desire. All yachts are maintained to the highest standards.”

According to the Sun-Sentinel, the indictment does not say how much money was raised in the stock offering. A December 2016 document filed by Deme with the Securities and Exchange Commission (SEC) listed $657,500 as the “total amount sold.” The minimum amount accepted from outside investors was US$5,000.

The indictment said that the SEC document  “falsely represented that no sales commission or finders’ fees were being paid to any person in connection with the sale of Waters Club stock.” It added: “Deme’s co-conspirators were compensated with sales commissions, and not stock, for recruiting investors, and thus their interests did not align with the interests of investors.”

The office of the U.S. Attorney in Connecticut said the FBI and IRS are continuing a joint investigation.