ABA JOURNAL

Racketeering suit says law firm aided sunken-treasure fraud, seeks $10M in damages

• "'The goal of the enterprise was to extract money from investors and lenders, conceal and perpetuate the fraud, [and] retain the funds fraudulently obtained,' the suit says."

• "Additionally, the enterprise sought to pump up the seeming value of the emeralds to investors through false filings, the plaintiff contends"

• "and 'thwart and intimidate' those who doubted the sunken-treasure story from asking questions by imposing 'enormous litigation and investigation costs.'"

• "An affidavit filed by Silverstein said the law firm was to get a percentage of the value of the emeralds..."

ABA JOURNAL

Federal judge axes suit against law Firm in sunken-treasure hoax, sets sanctions hearing for partner

• "A well-known Delaware law firm is no longer facing a civil lawsuit over a sunken-treasure hoax."

• "But a sanctions hearing has been scheduled later this week by a federal judge in Florida for partner Bruce Silverstein of Young Conaway Stargatt & Taylor, Delaware Law Weekly (sub. req.) reports."

• "[Plaintiff] contends [Silverstein] concealed a report showing that emeralds ... were coated with an epoxy resin. That meant the jewels, which diver Jay Miscovich had portrayed as being from a 17th-century shipwreck, had to be modern."

• "A second federal lawsuit in Florida, which was brought by ... investors who put money into the sunken-treasure venture and makes similar claims, is still ongoing..."

ABA JOURNAL

Fallout from claimed sunken treasure discovery dogs law Firm

• "...lab tests showed that some of Miscovich’s emeralds were covered with modern epoxy. That meant they were a modern find, which diminished their value..."

• "...Miscovich killed himself in October and a jewelry store owner testified in January he sold Miscovich 80 pounds of rough Colombian emeralds before the purported underwater find..."

• "[Plaintiff] now argues that Silverstein and his firm dragged out the litigation."

• "'Silverstein actually triggered substantial motions practice in an effort to get [Plaintiff's] claims dismissed before its expert could examine the emeralds and see that they were treated with modern epoxy and Krazy Glued,' [Plaintiff] claims in a motion... U.S. District Judge K. Michael Moore is considering the sanctions request."

LAW 360

Young Conaway Settles Investors' Shipwreck Treasure Suit

• "Delaware firm Young Conaway Stargatt & Taylor LLP has settled a $13.6 million racketeering suit brought by an investor group that said it lost millions in a fraudulent sunken treasure scheme..."

• "The Federal suit ... accused the firm and partner Bruce L. Silverstein of working with ... Jay Miscovich to lure investors into the recovery of thousands of precious emeralds Miscovich said he discovered ..."

• "...It was later revealed that Miscovich bought the gems..."

NEWS JOURNAL - DELAWARE ONLINE

Bruce Silverstein avoids sanctions in emeralds case

• "[Judge James Lawrence King] tossed out the sanctions case against Young Conaway last year. Silverstein remained the only party facing sanctions."

• "'Indeed, these proceedings have left unanswered many questions,' King writes."

• "The failure to provide clear and convincing evidence in the Silverstein case does not establish Silverstein's innocence or 'forecloses the possibility of future civil or criminal liability,' King writes."

• "'One of the greatest transgressions that can be committed against a federal court is to knowingly perpetrate a fraud and to commandeer and manipulate the legal processes to do so,' King's ruling says. 'This case involves just such a fraud.'"

NEWS BREAK - PATCH - Oct 6, 2020

Federal Affidavit Indicates Bruce Silverstein Perjury

• "The sunken treasure scheme, as widely reported in the national media over the last decade, left one man dead and others defrauded of millions."

• "The purported main actor in the big scheme was the only one who could testify to the truth of the extent of Silverstein's involvement."

• "It is determined that Silverstein was personally invested [with], and legally implicated in a variety of roles as a lawyer representing that man, Jay Miscovich."

• "The scheme began in earnest when the supposed sunken treasure was discovered in early 2010. Bruce Silverstein ... wrapped up a previous lawsuit with Miscovich in 2010."

• "'I have no personal knowledge of how Jay first came across the Discovery Site, as I had never met, or even heard of, Jay or Steve until January of 2011.' Silverstein wrote in an affidavit submitted to Federal Court, which served as his defense to a motion ... accusing him of being complicit in the fraud—preempting the entire line of cross-examination about his involvement..."

• "Jay Miscovich died before he was able to testify—"

KEY WEST CITIZEN

Judge Calls It: Emerald Treasure a Hoax

• "'We know this was a fraud and that fraud was at a minimum concocted by Jay Miscovich,' [Judge K. Michael Moore] said in open court."

• "Moore's synopsis followed the most damaging evidence of the trial: The testimony of Jorge Rodriguez... who told the judge that Miscovich bought a total of 80 pounds of low-quality emeralds from him for $80,000 during four separate visits to his shop in 2010."

• "In the backdrop of the trial this week came the news that several players ... received 'target letters' or notification from federal authorities, alerting them that they are under criminal investigation..."

• "Did [Miscovich] really find millions in Colombian emeralds ... as he so fervently claimed, even up to his suicide in October?"

• "No attorney challenged Moore's summation as he spoke to a silent federal courtroom that contained ... federal law enforcement officers..."

• "The other name that garnered the most specific attention from Moore was Bruce Silverstein, a prominent corporate lawyer who represented Miscovich in another, earlier lawsuit in Delaware that was settled out of court in 2010."