The "Instrument d'Analyse du Plasma" on DEMETER includes an ion drift meter used to measure the direction of the incoming ram plasma ([Berthelier et al., 2006a] and [Berthelier et al., 2006b]). Given the velocity of the satellite, and expected flow velocities of plasma along DEMETER's orbit, it is estimated that at mid latitudes, the direction of incident plasma as measured by IAP should be within approximately 2° of the ram direction. Yet, significantly larger angular deviations are measured routinely. An important assumption made in the interpretation of onboard instruments, such as IAP, is that neither the spacecraft nor the instrument significantly perturb the plasma that is being measured. In view of the large observed angular deviations, this paper examines the possible effect of the electrostatic sheath surrounding IAP. This is done with the 3D PIC simulation code PTetra. The model uses a full 3D particle in cell code with unstructured tetrahedral mesh capable of accurately representing the satellite geometry. The mesh is also adaptive so as to provide a fine spatial resolution in the vicinity of the particle sensor where it is needed, and a coarse resolution in regions where plasma parameters vary over a longer scale length. Calculation results show that while particle deflection associated with the electrostatic sheath near IAP can account for appreciable angular deflections for representative ionospheric plasmas, they are typically smaller than the ones observed. Additionally, the model is unable to reproduce the latitudinal dependence of the observed large deflection angles. It is concluded that sheath effects may cause appreciable distortions on the IAP type of ion flow meter instruments, and on other particle sensors in general. The larger observed deviations and their latitudinal dependence, however, must be attributable to other physical processes not accounted for in the model.