Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, July 12, 1990 TAG: 9007120298
SECTION: VIRGINIA PAGE: B2 EDITION: METRO
SOURCE: Associated Press
DATELINE: NORFOLK LENGTH: Medium
The Columbus America Discovery Group found the wreck of the SS Central America in 1987 about 160 miles off Charleston, S.C., in water 1 1/2 miles deep. The ship, carrying an estimated three tons of gold from the California gold fields, sank in a storm in 1857.
Nine insurance companies representing 39 underwriters who paid off on the wreck say the gold belongs to them. Columbia University says it is due a share because data from its 1984 sonar survey of the area was used to locate the wreck.
Columbia was paid $300,000 to do the survey by treasure hunters Harry G. John, heir to Miller Brewing Co. fortune, and Jack Grimm, a Texas oilman who found the wreck of the Titanic. John later assigned his stake in the Columbia data to the Province of St. Joseph of the Capuchin Order in Detroit.
Two weeks before the opening of the trial earlier this year, John bought back his stake from the order for $10. Midway through the trial, the monks came to an understanding with John and Grimm that they would split whatever was recovered.
The trial over the ownership of the cargo of the Central America began in early April. After 10 days of testimony, the parties submitted briefs to the judge. Wednesday was reserved for oral arguments on the briefs. U.S. District Judge Richard Kellam ordered any further filings be submitted within 10 days.
Wednesday's arguments covered the same ground as the trial.
Columbus America attorneys argued that the insurance companies had abandoned the wreck for 132 years and now were trying to cash in on someone else's labor. Richard Robol said there was no evidence that the companies had ever paid off on the policies, nor did they have an inventory of insured items.
"There was no proof that they are the identified owners of identified property," he said.
Robol said the gold could be worth $1 billion.
One of the problems is that there are no records to indicate how much gold was aboard the ship when it went down. Columbus America argued that the passengers were carrying a substantial amount of gold that was not insured.
The insurance companies denied they abandoned the wreck, noting that salvage operations were launched as early as 1858. The operations were all unsuccessful because the technology was not available to recover cargo from deep water.
"Who would ever abandon three tons of gold?" said Guilford Ware, lead attorney for the insurance companies.
The companies said newspaper accounts of the time clearly show the claims were paid. Columbus America countered that the accounts are contradictory, misleading and perhaps false. The group has demanded the companies produce business records showing exactly what was insured, for how much, and when the claim was paid.
The companies said those records no longer exist.
Columbia University, the monks, and John and Grimm all claim it was their data given Columbus America president Thomas Thompson that found the wreck. The exact location of the Central America is sealed in the court files and has not been released.
John Richardson, the university's attorney, said Thompson approached the university requesting the data for his own personal research. "The data was given to him as a scientific researcher with the understanding that it was for his eyes only and to advance whatever personal scientific research he was doing," and not for treasure hunting, Richardson said.
Had the university known Thompson had a group of 166 investors behind him funding his search for the vessel, it would not have given him the data, Richardson said.
Thompson has testified the data was of no use in the search.
John Reilly, representing Grimm and John, said Columbus America has never given in open court the coordinates of the wreck. Yet the data paid for by the two men gives the coordinates of a possible site.
"If it is the wrong coordinates, why haven't we heard from them? We must assume we were right on the money. . . . [Columbia University] gave Thompson all the utensils he needed to locate the Central America," Reilly said.
The Ohio-based group recovered more than a ton of gold last summer from the wreck. The group returned to the site this summer and is at work recovering the remaining estimated 2 tons of loot.
by CNB