CEO and President of Hawaiian Shipbuilder Semisub Accused of Securities Fraud

On Tuesday, the Department of Justice’s Office of Public Affairs issued a press release concerning securities fraud, conspiracy, mail fraud, and wire fraud charges brought against the CEO and President of Hawaii shipbuilding company Semisub Inc. 

The indictment was unsealed this week and follows in the wake of a Securities and Exchange Commission complaint filed in August. Owing to the criminal charges, the federal government also sought to intervene in and temporarily stay the SEC’s case.

CEO Curtiss E. Jackson and President Jamey Denise Jackson, who are married to one another, have been accused of running a decade-long scheme to defraud Semisub investors of millions. 

According to the DOJ, the couple would sell securities to investors, claiming that the money would be used to develop and build a fleet of semi-submersible vessels for tourism and other commercial purposes. They purportedly raised over $28 million from more than 400 investors.

However, the agency alleges that instead of devoting those funds to the proposed projects, the couple “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.” 

They drew investors in by claiming that Semisub had entered into agreements with multiple government agencies, and kept the facade going by telling investors that they were weeks or months away from beginning operations on their “Semisub One” prototype.

The DOJ noted that the defendants have a history with securities oversight agencies. In 2008 and 2009 respectively, Curtiss and Semisub were barred from selling securities by the Pennsylvania Securities Commission and the California Department of Corporations. Despite these actions, the defendants continued to sell securities to investors across the United States, including in California and Pennsylvania, the DOJ contended.

Reportedly, both defendants made court appearances Monday, with Curtiss appearing in Hawaii and Jamey appearing in Connecticut. Each charge against the defendants carries a potential 20-year prison sentence.