A world-class powerboat is up for auction after being seized by U.S. Marshals.
The sentence comes after the owner of a well-known high-performance boating team became the subject of an investigation unrelated to the nautical world.
Boaters around Lake of the Ozarks in Missouri likely recognize the Team CRC catamaran. The 42-foot MTI vessel last raced during 2021 or 2022, but had been a longtime regular in the high-performance LOTA crowd.
For those unfamiliar, Lake of the Ozarks is arguably the largest hotbed for high-performance boaters in North America and attracts massive crowds every year for the Lake of the Ozarks Shootout -- an event that often generates new world records and showcases the cutting edge in boating technology and performance.
The Team CRC catamaran is currently up for grabs through Aumann Auctions and comes with a Heritage tilt trailer. It is being auctioned without its twin engines, which were apparently removed prior to the seizure.
As of March 19th, the leading bid sits at just $71,000 — a bargain for a boat that costs into the millions new. Bid increments are only $1000 and 159 bids have been registered thus far. The auction closes on March 26th at 6 pm.
The boat’s former owner, Michael James DeFrees, was sentenced in January 2025 to 21 months in federal prison and ordered to forfeit $1.2 million and pay $1.3 million in restitution to the U.S. Small Business Administration (SBA). DeFrees was convicted of fraudulently obtaining COVID-relief funds and laundering part of the proceeds.
According to a press release from the United States Attorney's Office in the District of Oregon, between April 2020 and April 2022, DeFrees used two different business entities to obtain Economic Injury Disaster Loans (EIDLs) and Paycheck Protection Program (PPP) loans under false pretenses through the Small Business Administration (SBA). The EIDL and PPP programs, initially authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enabled SBA to issue low-interest loans to small businesses impacted by the pandemic.
According to court filings, DeFrees submitted several loan applications to the SBA and two banks in Washington State. In his applications, DeFrees stated that he was the sole owner of two businesses — Gateway National Corporation, a construction company incorporated in Washington State, and Yacht Harbor, LLC, a real estate development company incorporated in Oregon. The documents also required him to certify that he, as the sole owner, had never been convicted of any disqualifying criminal offense or been recently placed on parole or probation.
However, at the time DeFrees submitted the applications, he was on probation for a 2017 felony conviction in Washington state for falsifying records in a bankruptcy proceeding.
After DeFrees received the loan payouts, the prosecution stated he laundered a portion of the proceeds through a third business entity and spent the funds on personal expenses.
In May 2022, a federal grand jury in Portland submitted a four-count indictment against DeFrees, including two counts of wire fraud and one count each of bank fraud and money laundering.
In October 2023, DeFrees pleaded guilty to all four charges.
According to the Attorney's General office, the case involved multiple agencies including the SBA Office of Inspector General, IRS-Criminal Investigation, the U.S. Treasury Inspector General for Tax Administration (TIGTA), and the FBI. Assistant U.S. Attorney Ryan W. Bounds prosecuted the case.
“Michael DeFrees’s crimes demonstrated his indifference to both the many businesses suffering the economic effects of the COVID-19 pandemic and American taxpayers who funded the relief programs created to alleviate these impacts. Prosecuting COVID-19 fraud remains a top priority for the Department of Justice and our partners,” said Ethan Knight, Chief of the Economic Crimes Unit for the U.S. Attorney’s Office.
“Fraudulently using pandemic funds for personal gain is deplorable” said SBA Office of Inspector General (SBA-OIG) Western Region Special Agent in Charge Weston King. “This sentence demonstrates that those who defraud the nation’s vital economic programs will be held accountable. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”
“Crime doesn’t pay, as Mr. DeFrees is again finding today,” said Special Agent in Charge Adam Jobes, IRS Criminal Investigation (IRS:CI), Seattle Field Office. “Financial crime like Covid-relief fraud hurts all of us and undermines programs meant to help those in need. Today’s sentencing is a reminder that IRS:CI is committed to fighting fraud for the well-being of all our neighbors and communities.”
In June 2023, the SBA itself estimated it had disbursed over $200 billion in potentially fraudulent coronavirus pandemic relief funds.
As for the boat, the auctions lists the vessel as a 2006 MTI with a 42' LOA. While the engines have been removed, it's believed to have run last using Mercury Racing 1650's and #6 outdrives. Mercury Racing and Garmin GPS screens are outfitted the cockpit which has seating for five people using five-point harnesses.
The trailer appears to need some work to fix the hydraulics, but is functional. For any eager boater looking to scoop up the boat for a bargain, you may be able to use the spare funds to repair the hydraulics and hit the road.
The boat is currently available for viewing in Nokomis, Illinois.
The auction closes March 26th. #news
