Privilege Claims Sunk in Fake Treasure Ship Case

Bloomberg Law’s combination of innovative analytics, research tools and practical guidance provides you with everything you need to be a successful litigator.

Sept. 9 — A man who claimed to have found a treasure ship that sank during World War II can't keep his former attorneys from disclosing information that he allegedly falsified government documents about the ship's cargo, the First Circuit said Sept. 4.

The appellant—unnamed to preserve the confidentiality of grand jury proceedings—allegedly raised $8 million from investors on the basis of an admiralty claim on a British vessel sunk by a German U-boat.

The alleged falsifications made it appear as though the vessel, when sunk, was carrying 71 tons of platinum, 1.5 tons of industrial diamonds and possibly 10 tons of gold bullion, according to the government, now prosecuting the man for fraud.

His admiralty attorneys withdrew representation after learning of the alleged falsifications, the U.S. Court of Appeals for the First Circuit said.

The crime-fraud exception to the attorney-client privilege defeats the man's claim of privilege over documents subpoenaed by the government relating to the admiralty suit, the court said.

He isn't entitled to a document-by-document review because he failed to produce a privilege log asserting specific documents to which the crime-fraud exception didn't apply, the court said.

Full text at

Request Litigation on Bloomberg Law