Thomas Heaphy, Jr., 43, of East Moriches, N.Y., pleaded guilty yesterday to conspiracy to commit mail and wire fraud in connection with a rigged investment scam centered on Waters Club Worldwide, Inc. and Waters Club Holdings, Inc. — shell companies peddled as exclusive yacht charter clubs. The admission, made before U.S. District Judge Jeffrey A. Meyer in New Haven, caps a years-long swindle that left investors with worthless stock and a sinking sense of betrayal.
From August 2016 to February 2017, Heaphy and an unnamed co-promoter pitched prospective investors on the promise of an imminent IPO and a luxury time-share fleet of yachts. They claimed investor funds would build the business and that promoters like Heaphy were paid in stock, not cash. But the truth was a grift: Heaphy took approximately half of every dollar investors poured into Waters Club, pocketing $307,658 while the company bled out from lack of capital.
Court records show that at least 12 victims were fleeced for a combined $1,289,500. One Connecticut resident alone lost $475,000. With the money siphoned off, Waters Club never launched its membership club, never filed for an IPO, and left shareholders holding paper that couldn’t be sold. The dream of blue-water escapes vanished—replaced by cold reality.
The scam wasn’t Heaphy’s first tour through federal court. On July 28, 2017, he pleaded guilty in the same courthouse to another conspiracy to commit mail and wire fraud, plus tax evasion, tied to a separate ‘pump and dump’ stock scheme spanning from 2011 to July 2016. In that fraud, Heaphy and accomplices hyped shell companies with no real business, inflated share prices, then dumped their own shares before the crash—leaving investors with nothing.
Even more brazen: Heaphy began pushing Waters Club securities after learning in summer 2016 that federal investigators were onto his earlier crimes. At least six victims from the Waters Club fraud were already burned in the prior stock scam—making them repeat targets of Heaphy’s predatory playbook.
The FBI and IRS-Criminal Investigation Division led the probe. Assistant U.S. Attorney Avi M. Perry is prosecuting. Heaphy faces up to 20 years in prison on the conspiracy charge, but no sentencing date has been set. As the feds close in, one truth stands: the house of cards has finally collapsed.
Related Federal Cases
- Brian Ferraioli Pleads Guilty in $1.2M Waters Club Fraud · Connecticut
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- Bruce Lewis, 65, Charged in $33M Mortgage Fraud Scheme · New York
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Key Facts
- State: Connecticut
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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