The head of a yacht sharing program convicted of defrauding investors has been sentenced to 18 months in federal prison by a Connecticut court. Andrew Deme, 52, of Fort Lauderdale, was arrested last year and pleaded guilty on March 15 to one count of conspiracy to commit wire and mail fraud. He is out on $100,000 bond until he is to report to prison on July 12 and has been ordered to pay more than $1.2 million to investors.
According to U.S. Securities and Exchange Commission (SEC) documents, it was “alleged that half of all money paid by investors for shares of the company’s common stock (approximately $675,000) was used by Mr. Deme for the unlawful payment of sales commissions or finder’s fees to promoters.”
Deme resigned in late 2017 and James James, a former director of the company, was named as the president and chief executive officer. James is general manager of Yacht Chandlers in Fort Lauderdale.
The program, Waters Club Holdings Inc., was sold as a membership-based club for members to have use of a fleet of yachts at various cruising destinations around the world. April filings with the SEC show the company settled with Deme and is moving forward with the charter company.
Those documents state that the company has “entered into an exclusive charter contract with one of the company’s yacht charter vendors, with an option to purchase a yacht if executed prior to Sept. 31, 2018.”
Company operations were suspended in the U.S. Virgin Islands as the area is rebuilt after the 2017 hurricane season and operations have moved to the Bahamas for this year. Charter operations are expected to begin in the Virgin Islands “before the end of 2018, conditions permitting.”