Investors Strike Gold in Atlantic
Investors Strike Gold in Atlantic
Sep. 18, 1989
COLUMBUS, Ohio (AP) _ It took money to make money for a group of investors who financed a treasure hunt that struck as much as $1 billion worth of gold off the South Carolina coast.
The 106 investors in Recovery Limited Partnership, most from central Ohio, had to show a net worth of at least $750,000 or income over $200,000 per year for three years to be able sink money into the search for the SS Central America, a paddle-wheel steamship that sank 132 years ago.
But for those who qualified and made an investment at least $10,000 each, according to records filed in Ohio, the return promises to be substantial if the group's right to ownership of the gold is not overturned.
The booty, which will take months to haul from 8,000 feet of water nearly 200 miles out in the Atlantic, was three tons of government gold from the San Francisco Mint plus fortunes that passengers made during the California Gold Rush.
The gold from the mint was being transported to New York via the Isthmus of Panama when the Central America sank during a hurricane Sept. 12, 1857. Of more than 575 people on board, only about 150 survived.
Leaders of the expedition that located the wreck, the Columbus America Discovery Group, called the find the largest American treasure trove ever. Estimates of the cache's value range from several hundred million dollars to $1 billion.
''We've found it. Gold. Lots of it. We have hit the mother lode,'' underwater mining specialist Thomas Thomspon, a director of the group, wrote in a letter to investment group members.
Thompson put up no money for the expedition but is entitled to 40 percent of the income from it, according to filings with the Ohio Division of Securities.
''It was a high risk from day one. (But) because of Tommy's detailed studies and efforts over the years, I felt that it had a fair success chance,'' said Donald C. Fanta, president of the Ohio Co. brokerage and a member of the investment group.
''It is a tremendous technological achievement,'' Fanta said.
A former research engineer at the Battelle Memorial Institute in Columbus, Thompson took on an unpaid leave of absence to conduct the search. He and others pinpointed the wreck's location by cross-referencing news accounts of the day.
The issue of who actually owns the gold is still not completely settled, but an admiralty court in Norfolk, Va., has already ruled the Columbus group owns the dozens of artifacts and trinkets previously hauled from the steamship.
''At this point, the court has not considered the artifacts recovered this month, that is to say the gold,'' said Rick Robol, a lawyer for the group. ''The next step is a hearing on who is the owner of the gold.''
In another ruling favorable to the Columbus group, Judge Richard B. Kellam last month made permanent an injuction prohibiting anyone else from entering the wreck site. The admiralty court is a civil court that rules on maritime law.
Robol said from Dallas that he and his co-counsel, William J. Kelly Jr. of Columbus, would request a hearing on ownership of the gold, but said he did not know when he would make the request.
'The usual procedure, he said, is to have the determination of ownership on a number of different occasions as more and more items are brought up from a wreck, Robol said.
Judy Conrad, a historian who worked with the investors out of their Columbus office, said the find is ''like a storybook treasure.''
Conrad wouldn't mind if workers in the office - who are not investors - get to share a little of the wealth through a bonus of some sort. ''We're just depending on the kindness of strangers,'' she said.