PIRATE WATERS

The Curse of the South’s Shipwrecked Gold

In 1857, the SS Central America sank off the East Coast with a treasure on board. A century and a half later, an intrepid treasure hunter found it—and then went on the run.

Photo Illustration by The Daily Beast

When a legendary shipwreck was found in the late 1980s, providence seemed to be on the side of the enthusiast who’d discovered it. Now, a quarter-century later, the finder is in police custody facing criminal charges after three years on the run as the “smartest fugitive” ever to evade U.S. law enforcement—and the treasure he dug up is stuck in the middle of a protracted legal battle.

Twenty-seven years ago, treasure hunter Tommy G. Thompson struck literal gold 8,000 feet under the Atlantic. Thompson had spent the better part of a decade building the technology to help him locate one of the most legendary shipwrecks lost under the vast ocean.

In 1857, the SS Central America departed on its voyage from Panama to Cuba to New York, filled to the brim with ingots from successful California prospectors. On September 12, after the ship had sailed out from Havana, a hurricane swallowed it and sunk it to the sea floor. More than 400 people died in the accident, and some 21 tons of gold were lost to the ocean. This was the middle of America’s Gold Rush craze, and some historians believe the loss contributed to the financial depression that followed that year.

Its whereabouts were unknown for more than 100 years until, in 1988, the remains were finally located. With $12.7 million from investors, a remotely operated underwater device called Nemo, and some patience, Thompson hit upon the SS Central America off the coast of South Carolina. The gold he pulled up—nearly a ton—was enough to thrill investors, but Thompson was soon overwhelmed by legal issues. With his good fortune came a multi-year chase that ended with him in custody and a never-ending court battle.

Immediately after the ship’s discovery, the original insurers of the treasure (who’d paid out the settlements in 1857) sued for rights to the gold. They lost, but were later given a settlement of around 7 percent of the recovered gold.

Then, in 2005, investors alleged that Thompson had kept the entire treasure for himself rather than repay the millions they poured into the project. They filed suit against him, claiming to have never received their cut of the $40 million treasure trove that Thompson sold to the California Gold Marketing Group in 2000. According to an attorney for one of the plaintiffs, Thompson had hidden 600 pounds of gold in his office basement.

The next year, technicians who assisted in the wreck’s recovery sued as well, requesting millions for their work. When Thompson failed to show up in court in 2012, a warrant was issued for his arrest. But Thompson and his girlfriend appeared to be ready to go off the grid. They evaded capture for three years, until this January.

“Thompson was smart—perhaps one of the smartest fugitives ever sought by the U.S. Marshals,” Peter Tobin, an Ohio U.S. Marshal, said in a statement. The couple had reportedly been living in a Florida mansion filled with bundles of cash, cellphones, and even a book titled How to be Invisible. When they sensed authorities on their trail, they escaped again. Investigators tracked them through the region until arresting them in their suite at the Hilton in Boca Raton, where they were allegedly found with more than $425,000 in cash.

Thompson’s case languishes—he and his girlfriend pleaded guilty to criminal contempt of court in Ohio in April—but the convoluted court battle for the SS Central America’s treasure is far from over. The title to the wreckage was transferred to Recovery Limited Partnership (RLP), which continued fighting for control against outside parties throughout 2014.

In September, RLP requested it be granted rights under the maritime law of finds, which would entitle it to the full value of the ship’s cargo. Last week, a Virginia judge ruled that the group could not claim under the law of finds. Allowing it finder’s title would open the way for other treasure hunters to grab what they could. Instead, it should be granted jurisdiction under the law of salvage, which gives it exclusivity and would award a percentage of the shipwreck’s contents. Not to fear, though, the judge wrote: “if no owner should come forward to claim the property, the salvor is normally awarded its total value.” RLP was already granted “salvor-in-possession” rights to the site by the court, but it was not legally the owner of a salvage award, and must continue legal proceedings to get this award.

The excavation of the SS Central America has been put on hold as the legal cases play out. Meanwhile, millions of dollars in treasure still lies below the water. In March 2014, the hunt for gold was back on. RLP gave the excavation rights to a group called Odyssey Marine Exploration, which started exploration the following month. Early missions have already dredged up porcelain, gold, and other historic artifacts from the wreck.

But according to its operation reports, the last dive was in November. (Odyssey declined to comment because it is not a party to the current legal proceedings.) Newsweek has reported that court experts estimated the SS Central America is far from empty. What remains in the ship’s hold could be worth as much as $97 million—making a couple more legal bills, and perhaps even a curse, well worth it.