- On 20/08/2011
- In Treasure Hunting / Recoveries
By Tom Hals - Swissinfo
It was an eye-popping investment pitch no one else could match -- in return for $2 million (1 million pounds), Manhattan accountant Neil Ash was offering investors a stake in the one of the biggest sunken treasures ever, an underwater site teeming with emeralds.
The hitch: When Ash took backers to a Citibank vault to inspect gems that had quietly been recovered from the sea, they were gone.
That set in motion a complicated and colourful legal scramble to lay claim to a trove of emeralds worth up to $500 million, according to court documents.
It's a story marked by accusations of double-dealing, corporate mutiny and deceit. The cast includes an investor who once oversaw Citigroup's hedge fund business, a Democratic Party insider who has hosted the Obama family at his Hawaii getaway and an unlikely amateur treasure hunter.
The main legal dispute has played out quietly in Delaware's Chancery Court, where Jay Miscovich, a retired doctor who apparently found the emeralds, has battled against his investors who tried to seize control of the company that they say owns the treasure.
A settlement was approved Friday, but if the treasure is as striking as court documents suggest, there are probably more legal fights to come.
"It's just amazing to me, it's nearly like a movie script," said Paul Horan, Key West's go-to attorney for treasure salvors, of the case. "You just scratch your head and ask what the hell is going on."
The main players in the drama are bound to silence by confidentiality agreements. Most sensitive details have been redacted from court documents. It's never even revealed where the sunken treasure is located, or thought to be located. The filings from each side that are public contradict eachother, and despite the settlement each side negates the other's accusations.
To the degree a story can be pieced together, it goes something like this.
In early 2010, Miscovich, an investor in sunken treasure excavations, claimed to have located a site and recovered a "cache" of precious stones.
To pay for the pricey recovery work, Miscovich turned for assistance to his brother Scott, a Hawaiian physician. Scott connected Jay with Dean Barr, the former Citigroup hedge fund executive, who in turn, brought in Ash the accountant. In the summer of 2010, the pair agreed to pony up roughly $2 million, according to the partnership agreement, although the two sides differ on how much of that they actually invested.
Almost immediately, things soured. The investors suspected the Miscoviches were scheming to keep the most highly prized gems for themselves -- a concern fuelled by the empty safe deposit box episode.
Their worst fears seemed to be confirmed when Ash, the accountant, was contacted by Gerry Edwards, a diver working on the recovery efforts in Florida. Recounting the conversation to Reuters, Edwards said he told Ash that boxes of emeralds were being stashed out of the investors' reach in Key West.
Soon after Edwards' call to Ash, the investors sued. They wanted a ruling that Jay Miscovich had breached his contract with the investors and that they could seize control of the partnership.