CEO, President of Hawaii Shipbuilding Company Charged with Fraud

Image via Semisub Inc.

A married couple is facing federal charges for their alleged roles in a decade-long scheme to defraud investors in connection with Hawaii-based shipbuilding company Semisub Inc., the U.S. Justice Department announced Oct. 24.

According to court documents, Curtiss E. Jackson, 69, of Honolulu, and Jamey Denise Jackson, 59, currently of Lake Worth, Fla. and formerly of Honolulu, allegedly engaged in a scheme to fraudulently obtain money by deceiving purchasers of Semisub securities about the company’s business and operations, including its revenue and expenses.

The indictment alleges that Curtiss Jackson and Jamey Jackson, who were respectively Semisub’s CEO and president, raised more than $28 million from in excess of 400 investors, claiming the funds would be used to develop and build a fleet of semi-submersible vessels for tourism and other commercial purposes.

For more than 10 years, according to the prosecutors, the defendants allegedly falsely told investors that a purported prototype vessel, dubbed “Semisub One,” was “weeks” or “months” away from beginning operations. 

They also allegedly falsely claimed that Semisub had entered into agreements or developed relationships with government agencies and a well-known private equity firm to build and sell a fleet of additional vessels for $32 million each.

“The defendants allegedly misused a substantial amount of the money raised from the sale of Semisub securities to pay for luxury residences in California and Hawaii, a Mercedes-Benz automobile, luxury vacations, psychics, marijuana, personal credit card bills and cash withdrawals for their personal use, among other things,” according to a DOJ statement.

Curtiss Jackson and Semisub were also allegedly barred from offering or selling securities in two states —by the Pennsylvania Securities Commission in 2008 and by the California Department of Corporations in 2009. Nonetheless, according to the DOJ, the defendants allegedly continued to sell securities to investors across the U.S., including to those in California, in violation of a state order.

Both Jacksons are charged with securities fraud, conspiracy and mail and wire fraud. Curtiss Jackson made his initial court appearance Oct. 24 in the U.S. District Court for the District of Hawaii. Jamey Denise Jackson also made her initial court appearance the same day in the U.S. District Court for the District of Connecticut.

Each charged count carries a maximum penalty of 20 years in prison, the DOJ said.