Tommy T... The Investors are The Treasure

Ship Of Fools

From Forbes - Mark Tatge and Miriam Gottfried

Two decades ago investors gave Tommy Thompson millions for a piece of buried treasure. Will they ever see their money ? --

Where is Tommy G. Thompson? Not so long ago the marine engineer from Columbus, Ohio was everywhere, raising $55 million in equity and debt financing and promoting the latest underwater technology to salvage gold from the bottom of the Atlantic Ocean.

He once gave frequent press interviews and authorized books and TV documentaries to commemorate his recovery of a vast sunken treasure from the shipwrecked S.S. Central America--hundreds of gold Double Eagle coins, bars and ingots valued at $100 million to $400 million.

Some of that loot went on national tour; an estimated $100 million was sold in heavily publicized sales and auctions. Today Thompson, 54, is hard to find. His last residential address in public records: a trailer park in Fort Pierce, Fla. No one answers the phone there or at his former Columbus address. Investors who financed Thompson's Recovery Limited Partnership haven't seen a penny of returns, 19 years after the recovery of the treasure, and fear that Thompson left town with many millions.

It's been so long, the limited partners are dying off. Some of the surviving partners are suing to see their money again--or, at least, get an accounting. "Has plaintiff's investment in [the part-nership] been squandered or lost--or worse?" asks frustrated attorney Steven Tigges, who is representing Dispatch Publishing and former Ohio Company president Donald Fanta. Tigges has learned very little because Thompson's attorneys are doing their best to keep everything secret.

In late February they persuaded a state judge to seal the Ohio investor pleadings and dockets. (A federal judge unsealed them in May at the request of FORBES and others.)

Exploiting a certain dorkish charm, Thompson in 1985 started pitching to a handful of Ohio investors, over bites of lunch, a plan to find the Central America, a wooden side-wheeler that went down in a hurricane off the coast of North Carolina in 1857, killing 425 people on board and taking a fortune in bullion and newly minted $20 coins 8,000 feet down to the ocean floor. It was a great story. "Everybody knew the probability of finding gold was zero, but people still wanted to invest," recalls Donald D. Glower, retired dean of Ohio State University's College of Engineering and a mentor to Thompson.

Glower was happy to make the introductions. "I always thought he was honest." Buried treasure--what better way is there to captivate speculators? One hundred sixty-one investors, including developer Don M. Casto, Columbus Dispatch publisher John F. Wolfe and Worthington Industries (nyse: WOR - news - people ) founder John H. McConnell, anted up in a series of private partnership deals over the next nine years. Thompson borrowed tens of millions more. As general partner, Thompson stood to receive 40% of net income.

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