Plan A was to salvage the SS Port Nicholson, a World War II-era freighter that, according to Gorham treasure hunter Greg Brooks, was carrying a $3 billion bounty when it sank about 50 miles off Cape Cod.
Plan B, according to one of Brooks’ crew members, was to buy a fake gold bar, plant it at the bottom of the ocean, and film its retrieval in an attempt to lure investments.
Kevin LaChance, who operated the remote-controlled vehicle on Brooks’ crew, testified in a sworn deposition last fall that Brooks and others may have engaged in deception by staging a mission and also by fabricating or misrepresenting historical documents.
His deposition, which is not yet a public record but was obtained this month by the Maine Sunday Telegram, is part of a federal lawsuit filed last summer by Deep Down Inc., a Texas company that has sued Brooks’ firm, Sub Sea Research, for nonpayment of more than $130,000 in services related to the Port Nicholson salvage.
Another federal court battle is brewing between Brooks and a group of investors called Mission Recovery, which put at least $8 million into the salvage before asking a judge to strip Brooks’ salvage rights to the shipwreck.
Many court documents in both cases have not been made public, and Brooks and his attorneys are fighting to keep them sealed, but LaChance’s lengthy testimony provides the strongest evidence yet that Brooks’ highly publicized salvage has been a failure from the start.
The Maine Sunday Telegram learned of LaChance’s allegations a week after the Maine Office of Securities took the unusual step of soliciting information from anyone who invested with Brooks or his associated companies and anyone he approached about investing. The investigation by the Office of Securities, which exists in part to protect Maine investors from fraudulent practices, could lead to civil or criminal charges.
Thimi Mina, one of Brooks’ attorneys, said his client already has voluntarily provided information to the Office of Securities. There have been no public accusations that Brooks has used investor money for anything other than salvage missions.
As for LaChance’s claims, Mina questioned his motives.
“It would be useful … for anyone following this story to consider the sources of the allegations being made in the media and to evaluate whether Mr. Brooks’ detractors have or have had competing financial interests that would tend to undermine their credibility and motivations,” Mina said.
A STAGED SALVAGE?
LaChance, who declined to comment for this story but said his deposition speaks for itself, was hired by Brooks in 2009 to help salvage the SS Port Nicholson, a 481-foot British cargo vessel sunk by German U-boats in 1942.
Before Brooks came along, the wreck attracted little attention because its only known cargo was car and machine parts. But Brooks and his supporters believed there was more – a secret cache of platinum, gold and diamonds that was meant to be a lend-lease war payment.
Brooks and his crew began salvaging the wreck in 2009. In periodic status reports filed in court, Brooks blamed bad weather, equipment failures and difficult conditions for his failure to find anything of worth.
LaChance testified that his time aboard the Sea Hunter was mostly positive, although he said he clashed occasionally with Brooks and Gary Esper, the salvage ship’s captain. In one instance, LaChance said he brought up several safety concerns that were never addressed.
“Has Greg Brooks ever done anything, in your opinion, to mislead his investors?” LaChance was asked during the deposition.
“In my opinion, yes,” he replied.
LaChance said Brooks and Esper both approached him in early 2013 about staging a mission.
He said Brooks had purchased a fake gold bar online and wanted to have a scuba diver plant it on the ocean floor. The Sea Hunter’s crew would then use its remote-operated vehicle to retrieve the gold and videotape the operation, passing it off as a real salvage. The video would be shown to existing and potential investors.
LaChance said he saw and held the gold bar before the operation was carried out but declined to participate because he wasn’t sure it was legal. He never saw the video of that effort but said others told him Plan B was carried out.
It’s not clear whether any investors saw the video.
Gershon Gulko, a Massachusetts attorney representing Esper, sent a letter to LaChance last fall after his deposition asking him to “immediately cease and desist making and disseminating all said defamatory and false statements.” Gulko shared that letter with the Maine Sunday Telegram and said Esper “emphatically denies allegations made by Kevin LaChance in his deposition.”
LaChance also testified that Brooks may have misled investors in other ways, although he couldn’t say whether it was intentional.
He said he believed one of the main documents Brooks and his research partner, Edward Michaud of Framingham, Mass., offered as proof that the Port Nicholson contained platinum or gold was a copy and it differed from the original in a small but significant way.
Brooks’ copy of the ship’s cargo mail and passenger list contained an extra word under the cargo heading: “bullion.” Bullion typically refers to bars of precious metals.
LaChance testified that Brooks and Brian Ryder, Sea Hunter’s chief engineer, reacted with genuine surprise when he brought up the discrepancy between the two documents.
Timothy Shusta, a Florida attorney representing the British government in a counterclaim on the Mission Recovery case involving salvage rights to the ship, noticed the same difference in the two versions of the cargo mail and passenger list.
Shusta has spent several months comparing statements Brooks made publicly over the years, with information he has received as part of the discovery process in the court case.
He said there are a number of holes in Brooks’ claims:
In several news stories beginning in 2009, Brooks said the Port Nicholson carried 71 tons of platinum, and he produced an entry from Lloyd’s List of War Losses as proof.
But Shusta provided information from the U.S. Geological Survey that shows that total world production of platinum from 1937 to 1941 ranged from 14.5 tons to 16.9 tons per year. That means the Port Nicholson, which sank in 1942, would have been carrying five years’ worth of the entire world’s production of platinum if Brooks’ claim were true.
Brooks also claimed the Port Nicholson was carrying industrial diamonds and possibly gold. When asked by Shusta to provide documents proving that gold or diamonds were on board, Brooks’ lawyer responded, “Plaintiff is not aware of any such documents at this time.”
Brooks and Michaud also presented in June 2012 a copy of a U.S. Department of Treasury ledger declassified in 1987, that purports to show that 1.7 million ounces of platinum were aboard the Port Nicholson when it sank. Investigators have not been able to find that original document, nor have they been able to find the man who Brooks and Michaud say provided it to them.
‘WHEN IS IT … GOING TO STOP?’
Susan Gallagher is technically still in line to receive a share of treasure from the Port Nicholson, although she has long given up hope that there is anything to be found.
Gallagher invested $10,000 in Brooks’ operation five years ago, along with nine others who collectively gave $125,000 to own a “share” of the treasure. She didn’t know how many shares have been sold.
Gallagher, who lives in Gorham, said when she met with Brooks and others about investing, she was given a booklet of information that characterized the project as a salvage, not a treasure hunt.
“They presented it as, ‘We know it’s there,’ ” she said. “It was convincing.”
Gallagher said she and other investors had access to a secure website to track the salvage progress but she rarely checked it, instead relying on word of mouth for updates. Those updates were never positive.
“It was one excuse after another (from Brooks),” she said.
Gallagher said she can’t say whether she was deliberately misled but has many questions that have not been answered. That’s why she took the step of filing a complaint with the Maine Office of Securities that triggered the request for information about Brooks.
Judith Shaw, administrator for the Maine Office of Securities, said it’s too early to say what will transpire from her investigation of Brooks.
Gallagher said she believes other investors share her disbelief but understands why many have stayed silent.
“I think it’s more embarrassment than holding out hope of treasure,” she said.
More than that, Gallagher said she wants to alert any future investors to be cautious with Brooks.
“When is it ever going to stop?” she said. “I don’t want him to be able to continue doing this because I know there are still people who are investing.”
LEGAL SCRUTINY GROWS
Daniel Stochel, a New York investment fund manager, put roughly $8 million into the Port Nicholson salvage on behalf of his clients, including about $600,000 of his own money.
In the summer of 2012 – before Plan B – those investors formed a company called Mission Recovery and filed a complaint in federal court asking the judge to turn over salvage rights to the shipwreck.
The next year, Deep Down filed its suit, alleging that Sub Sea Research failed to pay $133,925 for a remote-operated vehicle built for the salvage.
Shusta said more documents from those two cases, including depositions from other crew members, are still forthcoming. However, in an affidavit filed April 15 in the case to determine future salvage rights, Brooks stressed the need for confidentiality, saying that he has “carefully guarded the confidentiality of its activities and records,” except in instances where the court required information.
“The constellation of treasure salvors throughout the world is relatively small, but they are highly competitive and the stakes can be very high indeed,” he wrote.
Last December, several people within the shipwreck industry from Massachusetts to Florida told a reporter that they have long been skeptical of Brooks and Michaud – two men who have made a number of bold claims over the years but have failed to deliver.
“If you look at the body of evidence, at what they have claimed and what they have delivered on, there is just nothing there,” Chris Hugo, a maritime historian and master diver from Massachusetts, said in December.
Brooks’ supporters, however, have maintained that investors and the British government would not be trying so hard to intervene if they thought the Port Nicholson contained no treasure.
And despite all the legal challenges, salvage on the wreck could resume later this spring.
Brooks recently partnered with a San Diego-based remote-operated vehicle company called SeaBotix and created yet another company, Port Nicholson Salvage Consortium, which is registered in Washington state.
Don Rodocker, chairman and CEO of SeaBotix, confirmed the partnership and said a crew will survey the shipwreck site in June or July.
He said he’s not concerned by Brooks’ legal troubles because “that happens with a lot of salvage cases.”
Asked whether he believes the Port Nicholson actually contains any treasure, Rodocker said, “If we knew for sure, it wouldn’t be called treasure hunting.”
Eric Russell can be contacted at 791-6344 or at: