'Ship of Gold' loot caught up in more federal court red tape

CHARLESTON, S.C. (WCIV) - The salvage efforts of sunken treasure off Charleston's coast are caught up in more federal court motions less than a month after crews recovered nearly 1,000 ounces of gold from the so-called Ship of Gold.

Trespass and misappropriation motions were filed in federal court Thursday against Odyssey Marine Exploration, Inc., a Florida-based salvage company that on April 15 pulled about 1,000 troy ounces of gold from the wreck of the S.S. Central America.

"Columbus-America Discovery Group, which has done several previously impossible feats in the deep ocean and has been sued and challenged continuously for more than 20 years, is still fighting for its right to the deep ocean shipwreck site of the S.S. Central America," said Milt Butterworth, CADG President.

The motion was filed by Columbus-America Discovery Group, the salvage company that originally found the wreckage in 1988, arguing that Odyssey is violating the law. CADG is asking the federal government to intervene and send in U.S. Marshals to seize everything recovered recently by the Odyssey crew.

"We are asking the court to uphold our permanent injunction, and allow CADG to fulfill its original purpose: to conduct multi-disciplinary research and develop sophisticated deep-ocean technology, and to locate, explore, and recover the remains of the S.S. Central America," Butterworth said.

According to Odyssey, in an April 15 dive the crew pulled five gold ingots ranging in weight from 96.5 to 313.5 troy ounces and two $20 Double Eagle coins.

Salvage crews believe the site has not been touched since 1991.

The shipwreck of the S.S. Central America has been no stranger to lawsuits and court filings since the find by CADG. The ship sank in 1857, some 130 years earlier.

The S.S. Central America was a 278-foot steamer sailing from Panama to New York City carrying 30,000 pounds of California Gold Rush-era coins and ingots - giving rise to the name Ship of Gold - when it sank during a hurricane on Sept. 15, 1857. A crew of 101 and 447 passengers were aboard the ship - 425 of them died.

The loss of gold sparked the Panic of 1857 which had a ripple effect in New York City's banking and factory communities.

The ship remained lost until CADG found and recovered thousands of gold coins and hundreds of ingots on Sept. 11, 1988. Shortly after, 39 insurance companies filed suits, claiming the damages they paid in the 19th century for the lost gold entitled them to the shipwreck.

CADG countered that argument, saying it had rights to the shipwreck because its crews had found the so-called Ship of Gold because it had been abandoned.

A four-year legal battle ensued and a little more than 90 percent of the shipwreck and its contents were awarded to CADG. The shipwreck was valued at $100-$150 million.

Then the shipwreck was left untouched until March 2014.

That's when the Odyssey was contracted an archeological recovery mission by Recovery Limited Partnership at the site for the remaining shipwreck.

But a year earlier, Ira Owen Kane, a court-appointed receiver who represents Recovery Limited Partnership and Columbus Exploration, chose Odyssey as the recovery contractors.

According to Odyssey, the initial dive was to reconnoiter the shipwreck site, but crews removed several items, including gold, pottery, and a piece of the wooden ship, as well as part of an experiment that had been left behind 20 years earlier.

But CADG claims that Recovery Limited Partnership and Odyssey "are interlopers, have engaged in acts of conversion, misappropriation of tangible and intellectual property rights, trespass, violation of CADG's injunctive, possessor, salvage and other rights, and have violated the permanent injunction."

Thus, the motion seeks to protect CADG's claim to the shipwreck as well as asks for a warrant to be executed on the Odyssey vessel.

Unless the courts enforce CADG's motion, the Odyssey crew has plans to remain at the site for five months and make occasional port calls in Charleston.