Maine treasure hunter schemed to defraud investors

By Erick Trickey - Boston Daily

Federal prosecutors have “ample evidence” that Maine treasure hunter Greg Brooks schemed to defraud investors of at least $8 million in a salvage operation off Cape Cod, a federal appeals court declared today as it ordered further evidence turned over to a grand jury.

The opinion from the First Circuit Court of Appeals in Boston includes the most detailed account yet of the federal investigation of Brooks and his former researcher, Ed Michaud of Framingham, Mass.—a tale told in “Hook, Line, and Sinker,” in our September issue.

Brooks’ company, Sea Hunters, raised millions from investors to salvage what he claimed was $3 billion worth of platinum from the S.S. Port Nicholson, sunk by a Nazi U-boat in 1942.

No criminal charges have been filed, but the opinion makes clear that Brooks is the target of an ongoing grand jury investigation.

Here are some key details from the court’s 26-page opinion (below):

• The feds think the Brooks and Michaud kicked off their alleged fraud in 2006, when Brooks paid Michaud to buy a copy of the reference book Lloyd’s War Losses. The book says the Port Nicholson sank with a cargo of automobile parts and military stores. Michaud, who is now a government witness, claimed that when he showed Brooks the info, Brooks commented that Michaud “needed to show more to get investors on board.”

• In 2008, Michaud admits, he altered an image from Lloyd’s War Losses, adding a line that said the Port Nicholson was also carrying 1,707,000 troy ounces of platinum. Michaud also “admitted to heavily redacting the remainder of the document and adding a forged ‘declassification’ stamp to conceal its origin,” the court’s opinion says. The altered document was later filed in court and given to some investors in Brooks’ company. (Brooks also showed it to CBS News in 2012.)

• Federal agents are looking into whether six pieces of metal that Brooks’ company presented to a federal court really came from the Port Nicholson. Salvagers need to present a piece of a vessel in court to make a salvage claim under admiralty law. Agents have interviewed two crew members who said that no material was recovered from the Port Nicholson during trips they took part in.

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