A couple that founded the Hawaii-based Semisub company has been charged with securities fraud, a felony, for misspending a good part of $28 million raised from investors, the Justice Department announced Tuesday.

Curtiss E. Jackson, 69, and Jamey Denise Jackson, 59, allegedly strung along investors for more than a decade, saying their prototype half-submarine — a partially submersible vessel designed for commercial sightseeing tours — was “weeks” or “months” from launching, while spending investors’ money on a Mercedes-Benz, cannabis, psychics, vacations, personal credit card bills and luxury residences. They “had been personally enriching themselves at the investors’ expense and had no intention or means to repay the large amount of money they had stolen,” according to an indictment unsealed Monday.

The Justice Department’s criminal indictment comes after the Securities and Exchange Commission brought a civil suit against the Jacksons and their company in District Court in August, alleging they embezzled at least $1.5 million from investors for personal use. Curtiss Jackson did not respond to a request for comment Tuesday, but he told the Honolulu Star-Advertiser in August, responding to the SEC lawsuit, “If the Feds felt they had a strong enough case, then they wouldn’t be charging me with a civil case; they would be just locking (me) up.”

In addition to securities fraud, the federal government criminally charged the Jacksons with conspiracy, mail fraud and wire fraud. Each carries a maximum sentence of 20 years in prison. The detention hearing for Curtiss Jackson is set for this morning in U.S. District Court. A lawyer for Jackson did not respond to a request for comment.

The SEC sought an injunction to prevent the Jacksons from further violating federal securities laws and an order that they return ill-gotten gains, plus interest and civil penalties. The Jacksons will face the SEC in a confidential settlement video conference Thursday. SEC attorney Patrick R. Costello, who is assigned to the case, did not respond to a request for comment.

“None of this baloney as far as misleading investors or anything to do with any funds that were misallocated — that’s not on me. I fully intend to cooperate. … I’m tired of being made to be a bad person when I’m not,” Jackson told the Star-Advertiser in August.

Jamey Denise Jackson could not be reached for comment. In August, Curtiss Jackson said his estranged wife had moved to Florida.

Though the 72-foot Semisub catamaran launched in 2019, it closed down in March 2020 when the pandemic struck and after the U.S. Coast Guard had noted problems with its engine. It never reopened.

According to court documents, the fraud began at least as far back as 2009, when the couple claimed that their “Semisub One” vessel was 90% completed, needing just two more months and $500,000 more in funding for construction, trials and a Coast Guard inspection.

“In truth and in fact, Semisub One was not two months away from beginning operations and generating revenue, and the defendants continued to raise money well in excess of the $500,000 they had claimed they needed to complete the vessel and misused a substantial portion of those investor funds for their own personal benefit,” the indictment states. “Over the next ten years, to perpetuate the fraud and support their lavish lifestyle, the defendants repeatedly misled investors about Semisub One’s status, routinely telling investors that Coast Guard certification was weeks or months away and soliciting more funds from investors to help Semisub meet its new timetables.”

The Jacksons also did not disclose as income on tax returns any of the money they used on personal expenses, the SEC’s suit said. According to the SEC’s lawsuit, these expenses included $8,500 monthly rent in Hawaii, a $2,300 monthly mortgage payment for a house in California, a $1,400 monthly car lease payment and more than $200,000 cash for “psychics” and drugs.

Investors and the federal government weren’t the only parties disappointed with Semisub. The company still has nine Yelp reviews to its name, for an average score of three of a possible five.

While some reviews were positive, noting a “beautiful seascape” and gracious hospitality, others rated the attraction as far removed from smooth sailing.

One reviewer wrote, in mid-January 2020, that aboard the vessel, “music was interspliced with the ambient sounds of wretching and one particular woman screaming at the crew that she was going to sue them all for her $400 worth of tickets.” The review concluded, “I don’t believe anyone aboard the SemiSuck that night will ever return for a second voyage.”