A Ft Lauderdale, Florida man was sentenced to 18 months in prison and three years of supervised release for his role in a scheme to defraud investors in a yacht sharing club of nearly $1.3m.
Andrew Deme, 52, pleaded guilty to misleading investors in Waters Club Holdings Inc (WCW), which was supposed to have been a membership-based club which would “introduce a revolutionary sharing economy model to yachting” with a fleet of yachts “strategically located in the world’s leading cruising regions that members share and use interchangeably for their yachting vacations”, according to WCW documents used to solicit investors.
Court documents indicate that Deme and two promoters he hired misled investors that their money would be used to develop the business and fund operations of WCW and specifically not pay commissions to the promoters. Investigators discovered nearly half the money put up by investors – some $600,000 – went to the promoters, leaving WCW lacking the capital necessary to develop the business and pursue an initial public offering.
The promoters – Thomas Heaphy and Brian Ferraioli, both of upstate New York – had previously pleaded guilty to the same charge and were sentenced to 72 months in prison for their role in this and another, unrelated investment fraud scheme.
Deme was released on a $100,000 bail and ordered to report to prison July 12.