Odyssey Marine Exploration, Inc. (NasdaqCM: OMEX) a pioneer in the field of deep ocean exploration, was named in several U.S. State Department cables obtained by WikiLeaks and furnished to the media worldwide. Some of the released cables suggest that the State Department offered special assistance in the “Black Swan” case to Spanish officials in exchange for assistance in acquiring a French painting confiscated by the Nazis during World War II and now controlled by Spain.

The cables indicate that the U.S. Government also provided confidential documentation on Odyssey to Spain.

Other State Department cables contradict Spain’s claims and support Odyssey’s previously stated version of events relating to the company’s activities in Spain, including the HMS Sussex project and the boarding of Odyssey’s vessels.

“While we are obviously concerned about these implications regarding the ‘Black Swan’ case, we are attempting to obtain additional information before taking any specific actions. I have personally sent a letter to the Secretary of State, Hillary Rodham Clinton, requesting additional information and a review of the position taken by the U.S. in the ‘Black Swan’ legal case,” stated Greg Stemm, Odyssey CEO. “The possibility that someone in the U.S. Government came up with this perfidious offer to sacrifice Odyssey, its thousands of shareholders, and the many jobs created by the company in exchange for the return of one painting to one individual is hard to believe. The WikiLeaks cables clearly show that we have worked cooperatively and transparently with both Spain and the State Department for many years, in spite of claims to the contrary. That fact makes the revelations all the more disappointing. The cables also make us wonder what other agreements may have taken place between U.S. Government officials and Spain regarding the amicus brief filed in support of Spain’s position in the ‘Black Swan’ case.”

“We’ve wondered why the United States changed its long standing position on sovereign immunity, which prior to this case was consistent with U.S. law, international law and U.S. naval regulations that in order for a foreign country’s ships and cargo to be immune from the jurisdiction of the U.S. courts they must be engaged in military, non-commercial activities,” stated Melinda MacConnel, Odyssey Vice President and General Counsel. “These released cables do call into question the motivation behind the amicus brief filed by the Executive Branch supporting Spain in the ‘Black Swan’ case.”

Additional cables released support Odyssey’s statements that, contrary to allegations of certain Spanish officials, the company always cooperated with the Spanish Government and that permits from the Spanish government were granted for work on the HMS Sussex project. The cables also demonstrate the obstructionist activities carried out by certain Spanish officials who had personal reasons for trying to prevent Odyssey from working on the Sussex. These obstructions took place even though Odyssey has an exclusive contract for the archaeological excavation of this UK sovereign immune warship (which was on a strictly military mission when it sank in 1694 off the coast of Gibraltar). Odyssey filed an affidavit in 2007 with a chronology of Odyssey’s interactions with the Spanish Government since 1998. It can be accessed at http://shipwreck.net/pdf/ExhibitE.pdf. The document contains entries that are corroborated by information in the State Department cables, which directly contradict claims by some Spanish officials and the Spanish media.

About the “Black Swan”

In May 2007, Odyssey announced the discovery of the “Black Swan,” a Colonial-period site located in the Atlantic Ocean which yielded over 500,000 silver coins weighing more than 17 tons, hundreds of gold coins, worked gold, and other artifacts. Odyssey completed an extensive pre-disturbance survey of the “Black Swan” site, which included recording over 14,000 digital still images used to create a photomosaic of the site.

The coins and artifacts were brought into the United States with a valid export license and imported legally pursuant to U.S. law. Odyssey brought the artifacts under the jurisdiction of the U.S. District Court by filing an Admiralty arrest action. This procedure allows any legitimate claimant with an interest in the property to make a claim.

The Kingdom of Spain filed a claim to the treasure alleging that the coins originated from the Nuestra Senora de las Mercedes, a Spanish naval vessel which sunk in 1804. Spain claimed that it owned all of the coins and that the treasure was immune from the jurisdiction of the U.S. Court under the Foreign Sovereign Immunities Act (FSIA). Although it has not been conclusively proven the recovered cargo came from the Mercedes, Odyssey presented clear evidence to the trial court (including the ship’s manifest) that shows the primary purpose of the Mercedes’ last voyage was commercial in nature and the vast majority of coins on board were owned by private merchants, not by Spain. The United States filed an amicus brief in the case changing its previous position and supporting Spain in the “Black Swan” case by setting forth a re-interpretation of the language in the Sunken Military Craft Act (SMCA) to allow government owned vessels on commercial missions to enjoy sovereign immunity.

A number of individual private descendants (whose ancestors were transporting goods on the Mercedes) as well as the country of Peru have filed claims in the case.

Without conducting a hearing, the district court sided with Spain and ruled that the treasure should all be turned over to Spain. The case is currently on appeal at the Eleventh Circuit.

For more information on the “Black Swan,” visit www.shipwreck.net/blackswan.php.

Odyssey’s significant legal filings in the “Black Swan” case can be viewed at http://www.shipwreck.net/blackswanlegal.php.

Related posts:

1. Odyssey Marine Exploration Files Appellate Brief in “Black Swan” Case
2. Odyssey Marine Exploration Challenges Claims by Spain in Its “Black Swan” Appellate Reply
3. Odyssey Marine Exploration Files Admiralty Arrests on Two Shipwreck Sites

The 19th-century shipwreck at the heart of the dispute with Odyssey Marine Exploration is the Nuestra Senora de las Mercedes — a Spanish warship sunk by the British navy southwest of Portugal in 1804 with more than 200 people on board.

The Legal Proceedings:

Odyssey announced in May 2007 it had discovered the wreck in the Atlantic and raised 500,000 silver coins and other artifacts worth an estimated US$500 million (€324 million). The coins and artifacts were brought into the United States with a valid export license and imported legally pursuant to U.S. law. Odyssey brought the artifacts under the jurisdiction of the U.S. District Court by filing an Admiralty arrest action. This procedure allows any legitimate claimant with an interest in the property to make a claim.

Spain went to the U.S. federal court claiming ownership of the treasure and the case is currently set for Oral Arguments tentatively scheduled to take place during the week of February 28, 2011 at the United States Court of Appeals for the Eleventh Circuit.

Additional appeals have been filed by groups who have presented documentation indicating that if Spain is correct, and the recovered cargo originated from the Mercedes, they are descendants of the owners of Mercedes’ cargo and have legitimate property rights. Those claimants have recognized Odyssey’s archaeological recovery efforts and have acknowledged Odyssey’s right to a salvage award.

Back To the WikiLeaks Disclosure:

Among the thousands of documents released by WikiLeaks are several U.S. diplomatic cables describing how U.S. ambassadors were helping Spain in their cause — partly to help broker a deal to bring a famous painting in Spain to a U.S. citizen who claimed it was looted by the Nazis in World War II.

Specifically the U.S. offered to provide confidential customs documents prepared by Odyssey that Spain in turn planned to use in court to fight Odyssey, presumably to discredit claims that the treasure was imported legally to the US.

Odyssey officials are not pleased at the revelation:

“The cables seem to indicate that someone in the U.S. State Department has literally offered to sacrifice Odyssey and its thousands of shareholders along with the many jobs created by the company in exchange for the return of one painting to one U.S. Citizen,” the company said in a statement “It is hard to believe that this really happened. It sounds like something out of a Hollywood script.”

According to an MSNBC Article:

A diplomatic cable a year later describes how the U.S. Ambassador to Spain, Eduardo Aguirre, suggested a deal.

He met with Spanish Minister of Culture Cesar Antonio Molina on June 30, 2008, who told the U.S. Ambassador that they should meet over the issue of a claim by an American citizen, Claude Cassirer, to recover a painting by Camille Pissarro. Cassirer claims the Nazis in 1939 forced his grandmother to sell them the painting and it passed through several hands before ending up in a Spanish museum.

“The [U.S.] ambassador noted also that while the Odyssey and Cassirer claim were on separate legal tracks,” the cable states, “it was in both governments’ interest to avail themselves of whatever margin for manouevre they had, consistent with their legal obligations, to resolve both matters in a way that favoured the bilateral relationship.”

The Spanish official replied, the cable says, that there were many steps required before any movement on the painting, but that he had recently flown to Washington, in part, to meet with lawyers that Spain retained in the Odyssey case. He expressed “indignation” after a CNN interview where Odyssey CEO Greg Stemm aimed to keep the treasure and return only items of archeological value.

London’s Guardian newspaper first reported the cables, as part of its ongoing digestion of thousands of documents released by WikiLeaks. The U.S. government has condemned the release and called for prosecution of WikiLeaks founders.

The Spanish were “grateful” after Department of Homeland Security staff in the U.S. embassy in Madrid handed the Spanish customs import documents that Odyssey had filed when bringing the treasure to Tampa.

“The information was confidential,” the U.S. cable stated, “and to be used only for law enforcement purposes.” The Spanish replied that they were “interested in obtaining the Odyssey customs information to provide to lawyers representing the [Government of Spain] in the Tampa Admiralty Court.”

Related posts:

1. Spain claims all treasure from The Black Swan
2. Spain in U.S. Court Today over Black Swan Treasure
3. Odyssey Marine Exploration Challenges Claims by Spain in Its “Black Swan” Appellate Reply

The Spanish galleon San Jose was trying to outrun a fleet of British warships off Colombia on June 8, 1708, when a mysterious explosion sent it to the bottom of the sea with gold, silver and emeralds owned by private Peruvian and European merchants, and lies about 700 feet below the water’s surface, a few miles from the historic Caribbean port of Cartagena, on the edge of the Continental Shelf.

Jack Harbeston, managing director of the Cayman Islands-registered commercial salvage company Sea Search Armada, who has taken on seven Colombian administrations during two decades in a legal fight to claim half the sunken hulk’s riches.

“If I had known it was going to take this long, I wouldn’t have gotten involved in the first place,” said Harbeston, 75, who lives in Bellevue, Wash.

The 41-page federal lawsuit outlines a long, tortuous jpurney through the Colombian courts after the Glocca Morra Co. identified six shipwreck locations, between 1980 and 1985, operating with permission of Colombia’s Direccion General Maritima.

Harbeston claims he and a group of 100 U.S. investors – among them the late actor Michael Landon and the late convicted Nixon White House adviser John Ehrlichman – invested more than $12 million since a deal was signed with Colombia in 1979 giving Sea Search exclusive rights to search for the San Jose and 50 percent of whatever they find.

Colombia tried to weasel out of the deal after Sea Search recovered materials from the ship, proving it was down there. Colombia “delayed signing the written agreement it had drafted, and eventually refused to sign the offer it had made to SSA,” the complaint states. But nonetheless Colombia refused to let it salvage the shipwreck.

All that changed in 1984, when then-Colombian President Belisario Betancur signed a decree reducing Sea Search’s share from 50 percent to a 5 percent “finder’s fee.”

Sea Search sued in Colombia, calling the Seizure Law retroactive and unconstitutional, and the Colombian Supreme Court agreed in 1994, giving Sea Search rights to 50 percent of the San Jose treasure, and the other half to Colombia, according to the complaint.

Sea Search says Colombia still refuses to let it salvage the shipwreck, and has taken a series of actions in bad faith, for decades, to prevent it from doing so. It demands $4 bill to $17 billion – the estimated value of the treasure – and damages for breach of contract and conversion, and enforcement of the foreign judgment.

The real value is impossible to calculate because the ship’s manifests have disappeared. The San Jose is known to have been part of Spain’s only royal convoy to try to bring colonial bullion home to King Philip V during the War of Spanish Succession with England from 1701 to 1714.

“Without a doubt, the San Jose is the Holy Grail of treasure shipwrecks,” said Robert Cembrola, director of the Naval War College Museum in Newport, R.I.

Related posts:

1. British Shipwreck Could Hold £2.6 Billion in Treasure
2. New Battle Looms Over Rights to the World’s Richest Shipwreck
3. Sedwick Auction To Feature Shipwreck Treasure, Gold Cobs and World Coins

For many years, it’s been no secret that I haven’t been a big fan of the 1857-S double eagles that trace their origin from the famous S.S. Central America shipwreck. I’ve written that price levels of these coins haven’t made sense to me and I’ve have had problems with their appearance. More than a decade after they were first released onto the market, has my opinion changed?

I believe that this is (finally) a sensible time to purchase an S.S.C.A double eagle. But there are some important parameters for the collector to follow when considering a purchase. Some of these are as follows:

1. Be Selective. There are over 5,000 1857-S double eagles from this shipwreck and they range in grade from Extremely Fine to Mint State-67. With this wide variety of grades, there are a tremendous number of coins to choose from. At any given major auction, there are typically three to five available and it isn’t terribly hard to find them in specialist dealer’s inventories. I have noticed a huge variation in quality for coins in the same grade. As an example, I’ve seen some in MS63 holders that I’ve loved and I’ve seen some in MS63 holders that I thought were horrible. Spend 10-20% more and buy a coin that is high end and attractive. In some instances, you will be able to buy nice, high end examples for little or no premium.

2. Find the Sweet Spot. In my opinion, the “right” grade range for one of these 1857-S double eagles is MS63 to MS64. There is not much of a premium for these two grades over AU and lower Mint State grades and when you buy a coin that grades MS63 to MS64 you are getting good value. In the current market, AU58 examples can bring as much as $3,500-4,000. An MS63 is worth around $7,000-8,000 while an MS64 is worth $8,000-9,000. It seems to me that an MS63 at around 2x the price of an AU58 is good value. And it also seems to me that an MS64 at around $1,000 more than an MS63 is good value as well.

3. Stick With Coins in Original Holders. It is important to focus on 1857-S double eagles that are in their original gold foil PCGS holders. And having the original box and other packaging is an added benefit. Avoid coins that are not in these holders and stay clear of NGC graded S.S. Central America double eagles. They may be nice coins but they have been cracked from their original holders and probably upgraded.

4. Avoid Coins That Have “Turned” in the Holder: All of the coins in this treasure were conserved after they salvaged. The conservation process has been well-documented and, in some cases, the work was outstanding. But there are other coins that have “turned” in the holder. These can be identified either by very hazy surfaces or unnatural splotchy golden color. Avoid these coins and look for pieces that are bright, lustrous and evenly toned. At this point in time, coins that haven’t turned are probably not going to.

5. Disregard The Die Varieties. All 1857-S double eagles from the shipwreck are attributed to a distinct die variety. There are over 20 varieties known. Some are probably rare but it is even rarer to find a collector who cares. I’d suggest not paying a premium for these.

6. If You Are Buying a PL or DMPL Example, Carefully Study the Market. A very small number of 1857-S double eagles were designated as either Prooflike (PL) or Deep Mirror Prooflike (DMPL) by PCGS. These are some of the most visually arresting coins from the shipwreck. I have seen a few pieces in the last few years bring extremely high premiums. These are no doubt very scarce and very flashy coins but I question the premium that they are currently bringing. If you do decide to purchase such a coin, carefully check auction prices for comparable examples and make certain that the price you are paying is in line with the last auction trade.

Now that I’ve told you the coins to avoid, let me tell you my ideal S.S. Central America double eagle and let me tell you why my opinion about these coins has changed over time. My ideal 1857-S double eagle from this shipwreck would be a choice, high end PCGS MS64 in a gold foil holder with original papers and box. It would be very lustrous and bright with no haze or discoloration. I’d expect to pay $8,000 to $9,000 and I’d expect to be able to find a nice one within a month or two of beginning my search.

What made me change my mind about these coins? For years, I thought they were very overpriced. I don’t remember the exact issue price but I do know that whenever I would buy the coins from original investors, they would have to sell them at a loss; often a considerable one. I didn’t like it that there was no real secondary market for these coins and that many of the investors who bought them had been told that they would appreciate in value.

What changed about these coins, at least for me, was the creation of a secondary market. A few of the larger firms that sell Liberty Head double eagles have done a great job of creating this market. For many new double eagle collectors, a bright, shiny high grade 1857-S is a great starter coin and this has created a new level of demand that hasn’t exiated since the coins were being sold (and heavily hyped) over a decade ago.

Another thing that changed my mind about the S.S. Central America coins is their comparative value with other Type One double eagles in higher grades. As an example, compare an MS64 1857-S to an 1861 in this grade. Prior to the discovery of this hoard, the 1861 was the “generic” date of this type and it was certainly the only coin that was seen, from time to time, in MS64. In 2001, an MS64 1857-S in a PCGS gold foil label was a consistent seller at auction for $6,900. At that same point in time, an 1861 would sell for $10,000 to $12,000. Today, the same 1857-S is only worth $8,000 while an MS64 1861 would sell for $18,000-20,000+. Non-1857 S double eagles in high grades have become expensive and hard to locate. This has increased demand for the 1857-S double eagles and I wouldn’t be surprised to see them reach $10,000 in the next year or so.

One last observation about my about-face. I’ve seen thousands of 1857-S double eagles from this shipwreck and I’ve got to admit, that they’ve grown on me. Ten years, when conservation was not so widespread, these coins appeared funky and I hated the way they looked. Today, with conservation more readily accepted (and way more widespread) they don’t look so funky anymore. I love the quality of strike and blazing luster that many of them show and they are certainly an interesting contrast to the dirty, crusty often bagmarked AU Type One double eagles that are a staple of my day-to-day business. Do I love these coins? Not really. But I’ve become more accepting of the way they look and have always loved their back story. Today, if a collector asks me “should I buy an S.S. Central America double eagle my answer will typically be “yes, but with a few red flags.” A few years ago, my answer would have been a quick and curt “no.”

Related posts:

1. Prooflike 1857-S Double Eagle Gold Coins from the Shipwreck of the S. S. Central America
2. 1861-S Paquet $20 Gold Double Eagle to be offered at Central States Coin Show
3. SS Central America Shipwreck “Ship of Gold” Exhibit Comes to ANA World’s Fair of Money in Boston

The next section, World Gold Coins, contains over 300 lots, most of them Spanish Colonial “busts,” including: the finest known Mexican 1 escudo 1733/2, recovered by Marty Meylach from the 1733 Fleet and the inspiration for his book Diving to a Flash of Gold; a unique Santiago, Chile, 1 escudo, 1755/4, from the famous Eliasberg collection; and well over 100 Spanish colonial bust 8 escudos by date, most of them starting below melt value.

The Ingots section features a collection of large, natural gold nuggets, as well as several important 16th-century ingots (including “tumbaga”) and a unique silver “piña” ingot from the Atocha (1622).

“This is not just a treasure auction–it is also a world coin auction, our first big offering of gold and silver coins from countries all over the world.
Daniel Frank Sedwick

In Shipwreck Silver Coins bidders will find hundreds of Atocha (1622) silver coins, both rarities and wholesale lots, in addition to coins from dozens of shipwrecks around the world assembled by two different collectors.

The Silver Cobs sections for Mexico, Lima and Potosí contain no less than four Royals (round presentation specimens) in various denominations. The Lima listings are dominated by the collection of Robert Mastalir, including a nearly complete date-run of 1R that contains several unlisted overdates. Featured in Other Cobs is a Santo Domingo 4 reales of Charles-Joanna (one of very few ever offered at auction), as well as a large collection of dated cobs from mainland Spanish mints.

Following a short but varied Ancient Coins offering (the first for Sedwick), the expanded World Silver Coins section comprises over 600 lots, with particular emphasis on Colombia (featuring Part II of the Herman Blanton collection) and the British Isles (Great Britain, Ireland and Scotland). There is also a large collection of British Admiral Vernon medals.

“Our most important items are in shipwreck artifacts, however,” says Sedwick’s assistant Agustin “Augi” Garcia, whose new book The “Tumbaga” Saga about some conquest-period silver bars is being released at the same time. “Of particular significance is a unique Tarascan (Mexican) silver rodela (plate) from the “Tumbaga wreck” (ca. 1528), featured in my new book and the important link for figuring out what the silver ingots of that time were made of.”

The Shipwreck Artifacts section also features a large gold-and-emerald pendant and a gold religious medallion and chain from the 1715 Fleet, followed by many lots of small artifacts from the 1733 Fleet, the collection of Marty Meylach himself. Non-shipwreck Artifacts include a large selection of colonial-era weapons, mainly flintlocks and swords, as well as several natural history items like fossils and scrimshaw.

The auction is rounded out by Documents and Media (books and catalogs), ending with a special, full-color, hardbound, limited edition #1 of 50 copy of Augi’s much-anticipated book The “Tumbaga” Saga, which the author will personally inscribe to the winning bidder.

Prospective bidders must first register, which can be done directly on iCollector by going to www.icollector.com/sedwick. Also, this time Sedwick’s company has integrated the iCollector bidding platform directly on their site so that bidders can bid directly (still with the same service and anonymity as on iCollector) while browsing the lots at www.auction.sedwickcoins.com. Bids will also be accepted by FAX, mail and email and phone, and limited live phone bidding will also be available by prior appointment only.

Related posts:

1. Daniel Frank Sedwick Treasure and World Coin Auction #7
2. Genuine Shipwreck Treasure to be Auctioned by Sedwick
3. Daniel Frank Sedwick, LLC announces the release of their Treasure Auction #6, October 15-16, 2009