In 38 years of yachting, I’ve worn multiple hats. I’ve been a captain, for instance, plus authored a hypothetical 200-page standard-operating procedure handbook that other captains can adapt to their needs. I’ve also served as a liability litigation support witness, defending yacht owners and their insurers. Through it all, while I see competent and ethical professionals, I’ve witnessed a deterioration of ethics as well. Superyacht fraud is increasingly impacting yacht operations and refit. Fraudsters are preying on owners’ trust and, in many cases, lack of technical and mechanical knowledge. This leaves owners disillusioned, with financial loss, betrayal, and sometimes unseaworthy vessels.
My team and I strive to ensure that everyone in a yacht program embraces ethics. This includes attorneys, hull-insurance providers, captains, crewmembers, vendors, management companies, project managers, yards, and brokers. They need to embrace good faith, fair dealing, and fiduciary responsibility. Additionally, new-build and repair yards have additional responsibilities toward the custody, care, and control of yachts in their facilities.
Protecting yourself from superyacht fraud and theft involves diligence, education, and professional assistance. Here’s the advice I give to owners to avoid issues ranging from overcharging and invoicing for non-existent services, and to ensure well-trained professionals contribute to a project.

Hire an Owner’s Representative
Retaining someone knowledgeable about maritime matters and specifically the yachting industry is important. This professional provides third-party oversight and audits of all facets of your yachting program. Operational fraud often stems from insufficient oversight. An owner’s representative acts as an unbiased supervisor, ensuring transparency and accountability. By asking critical questions and prioritizing your interests, an owner’s representative ensures every decision aligns with your needs, operational safety, and financial efficiency.
Commission Pre-Purchase and Pre-Refit Inspections
An independent accredited yacht surveyor must conduct and document, with photographs, a thorough pre-purchase survey of the yacht for your hull insurer. Briefly, they can attest to the condition of the yacht you want to buy. Your owner’s representative should be present during the entire survey. All too often, the scopes of pre-purchase surveys are inadequate. Similarly, pre-refit surveys and conditional evaluations aren’t addressed. Mold and mildew assessments are crucial, as is a thorough corrosion survey for aluminum and steel vessels. This corrosion survey further should utilize visual inspection and ultrasonic transducers, targeting bilges, hull plating, holding tanks, sea chests, piping, stern tubes, through-hull stub-ins, flanges, and sea valves. Your owner’s representative, or a surveyor, can conduct and document, with photographs, a thorough pre-refit inspection of your vessel. This will facilitate forecasting costs, lead times, and required resources.
Interview and Vet Your Team Members and Vendors
Conduct thorough background checks on captains, project-manager candidates, and vendors, with references. Utilize fellow yacht owners, their representatives and attorneys, and private investigators. This helps you steer clear of individuals who recommend owners fund projects through tax-exemption schemes and submit funding requests before onboarding vendors. Others funnel deposits for accepted quotes into shell companies that they later dissolve.

Require Using Project Management Software
Ask your project-manager candidates if they use project-management software. Specialized software exists for managing yacht refits. Its tools provide detailed updates, for example, plus cost tracking and projections. Furthermore, the software generates visual progress reports. Ultimately, it reduces miscommunication and superyacht fraud risks by providing you with transparency.
Establish Document Version Control
Require document version control for all contractual and agreement-related quotes and invoices. It avoids the issues of vendors or shipyards submitting untitled or ambiguously file-named documents for written quotes. Similarly, it eliminates continuing to send these types of documents seemingly but indiscernibly related to the original quote. Firstly, establish invoicing and change-order document-version control using file name methodology. Secondly, require detailed estimates, contracts, and invoicing with defined labor rates and labor hours, deposits with due balances, milestone payments, plus materials, equipment, and machinery costs. Also require photographic evidence of work commencement, progress, and completion.
Maintain an On-Site Presence
Whether you’re building a new yacht or refitting one, have a trusted representative conduct independent inspections of the work and materials used. This ensures compliance with your contract and service agreements, including usage of proper parts and related goods. Your owner’s representative can serve as your project-specific quality-assurance or quality-control officer.

Establish Graduated Labor Rates
Graduated labor rates for laborers, apprentices, and journeymen tradesmen differentiate work based on experience, licensing, and certifications.
Require Work History and Tradesmen Certification
Require state contractor trade licensing wherever possible. Additionally, use a skilled day-labor force to offset costs and reliance on contractors.
The high-value transactions and bespoke services in the yachting industry are targets for superyacht fraud. With informed steps, yacht owners can navigate these murky waters safely. The sensitive nature of client confidentiality requires discretion and steady vigilance over every aspect, whether buying, building, operating, or refitting. Yacht ownership can fulfill dreams of relaxation, intimacy, and adventure, which in turn offer the increasingly scarce benefits of privacy and security.
John Francis International johnfrancisinternational.com
Leave a Reply