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You find sunken treasure, literally piles and piles of gold (and a fair amount of human bones) at the bottom of the ocean. You're set for life, right? Not quite. As any fan of "The Treasure of the Sierra Madre" can tell you, finding gold is just the start of your troubles.
And so it goes with the S.S. Central America, a Gold Rush era steamship that deposited over 30,000 pounds of gold (worth about $50 million today) in Davey Jones' locker, just off the coast of South Carolina, more than 150 years ago. That sunken treasure was discovered in the late 80s, only to lead to legal battles that are still playing out today, most recently with attorney Richard Robol being sanctioned for $225,000 for failing to turn over documents regarding the gold.
Good Treasure Gone Bad
The S.S. Central America sunk off the coast of South Carolina in 1857, the victim of a hurricane that hit while it was transporting Gold Rush gold from San Francisco to New York. Gone was the gold, along with more than 400 human passengers. The loss contributed in part to the Panic of 1857, the first world-wide economic crisis.
The gold stayed at the bottom of the sea until 1988, when it was discovered by treasure hunter, and later fugitive, Tommy Thompson. Thompson and his company, the Columbus-America Discovery Group, won salvage rights to recover the gold and for 10 years, Robol worked as their lawyer, becoming heavily involved in the recovery.
Of course, no one forgets when $50 million worth of gold goes missing. Old insurers began to appear, demanding reimbursements from payouts made generations ago. Even a group of Capuchin monks wanted their portion of the treasure, claiming the gold was rightfully theirs.
The legal battles played out for years, and eventually Thompson won rights to most of the gold. But he wasn't keen to share it with the investors who had funded the recovery effort. Thompson ran off with the gold, failing to pay investors back over $12 million. For two years, the treasure hunter, who federal agents described as "perhaps one of the smartest fugitives ever sought," was on the lam, before being captured in Florida last year.
Another Treasure, Hidden in
Plain Sight the Lawyer's Basement
Two of those fleeced investors, Dispatch Printing Co. and Donald Fanta, filed suit, claiming that they were never reimbursed for their $1.25 million investment. Over years of litigation, Robol had claimed the salvage companies had turned over all inventories of the gold that were salvaged from the ship.
But, it turns out, Robol was hiding his own sort of treasure. When a receiver was put in charge of the salvage companies, it found 36 file cabinets filled with undisclosed company records, including thousands of pages of gold inventories that had never been produced during litigation. All of this was tucked away in the basement of Robol's duplex.
Robol was ordered to pay $225,000 as a result, a fine the Sixth Circuit upheld last Friday. The ruling comes a year after Robol lost another legal battle of the gold. In that case, Robol personally sought a share of the recovered treasure, for his work in salvaging the gold. But the Fourth Circuit disagreed, finding that Robol's actions weren't voluntary, but required by his role as attorney for the salvage companies.