Jay Miscovich was a bright man, with a medical degree in his pocket, but he preferred the world of business and real estate investments until, down-on-his-luck, he turned his talents to finding sunken treasure off the coast of Florida.
He told a story about running into an old friend in a bar in Key West, who showed him some salvage fragments which appeared to be from a Spanish galleon. He purchased a map from his friend for $500.00, where X marked the spot of a possible treasure trove of sunken artifacts and perhaps more.
He and a buddy, later a partner in the company they incorporated, began diving in the location marked on the map and lo and behold, they discovered over 80 pounds of emeralds on the ocean floor. But under Florida law they needed the admiralty court to confirm their find and legally recognize their ownership.
It was not to be as straight-forward as they hoped.
A well-established treasure salvage company, Motivation Inc., who in the 1980’s staked claims to two Spanish galleons that sunk in 1622 and rescued over $400 million dollars in booty, including gold and silver, challenged Mr. Miscovich’s claim, saying the area where the emeralds were found, was part of their salvage operations, 30 miles off the Key West coast.
Miscovich needed a lawyer and hired the well-respected firm of Young Conaway in Delaware. Young Conaway partner, Bruce Silverstein, ran the case and became an investor in the project as well. Silverstein engaged counsel in Florida to represent Miscovich in admiralty court. Young Conway’s legal fees would be paid from a percentage of the treasure, after sufficient monies were raised from investors to conduct the salvage operation.
Under the intense scrutiny of Motivation Inc., Jay Miscovich’s tale of treasure began to fall apart. Lab tests revealed that the emeralds were coated with a 20th century epoxy. But it was to get worse.
In later court proceedings a Florida jeweller testified that Mr. Miscovich purchased $50,000 worth of low-quality emeralds from him several months before the “find”.
Jay Miscovich committed suicide once the fraud began to unravel.
An investor’s group filed a $10 million dollar lawsuit against Silverstein and his firm, alleging that the goal of the enterprise was to extract money from investors and lenders, and conceal and perpetuate the fraud.
They also claimed that Miscovich fraudulently pumped up the value of the emeralds by causing Young Conaway to file false documents. Finally, they said Young Conaway’s litigation tactics were intended to “thwart and intimidate” the opposition by imposing “enormous litigation and investigation costs”.
Motivation Inc. had earlier brought a lawsuit against Young Conaway for fraud and bar sanctions against Bruce Silverstein, alleging that Silverstein aided and abetted Miscovich’s fraud, while deliberately delaying the legal proceedings by filing frivolous applications designed to overwhelm Motivation Inc.in a paper war.
This week a Florida court threw out Motivation’s fraud claims against Young Conaway, but agreed that Bruce Silverstein must face a sanctions hearing, not a trifling matter in the practice of law.
In the meantime, the investor’s claims are still alive, pending an upcoming trial.
As for attorney Silverstein, it is reported that he has an impeccable reputation with both the bar and the bench, and is highly offended by the allegations that he knowingly participated in the fraud. Young Conaway’s view is that they are innocent victims of their client’s treasure hunt scam.
Lawdiva aka Georgialee Lang