A deep-sea treasure hunter from Gorham with a long history of failed salvage attempts is being investigated by the state agency that protects investors from fraudulent practices.
A news release Monday from the Maine Office of Securities asked anyone who has invested with Greg Brooks or any of his associated companies, including Sub Sea Research, Sea Hunters or Deep Sea Hunters, to call (877) 624-8551. Those who have been approached about investing also were asked to call.
Brooks has been a commercial treasure hunter for nearly three decades and has searched waters from Casco Bay to the Caribbean for shipwrecks. Despite many boastful claims over the years, he has never found any treasure. Skeptics have grown increasingly wary of Brooks’ operations.
In the last year or so, some investors have become disgruntled with Brooks and his current salvage of the SS Port Nicholson, a World War II ship that sank about 50 miles off Cape Cod. Last year, a group of those investors filed a claim in federal court asking a judge to strip Brooks of his salvage rights to the Nicholson, which he claimed contains 70 tons of platinum. That case is still in U.S. District Court.
Although the Office of Securities does not say that Brooks is suspected of fraud, the office exists to “protect Maine investors by investigating and prosecuting violations of securities laws; licensing broker-dealers, agents, investment advisers, and investment adviser representatives; and reviewing registration statements and exemption filings for securities issuers that are seeking to sell in Maine.”
Judith Shaw, administrator for the Office of Securities, said she could not discuss what prompted the agency’s request for information about Brooks. She said the investigation could lead to a conclusion ranging from no action to referral to the Attorney General’s Office for prosecution.
Brooks released a statement in response late Monday through his attorney, Thimi Mina, indicating that he had been asked to provide information to the Office of Securities.
“This office was retained to represent Mr. Brooks and his companies in connection with a request to voluntarily provide information to the Office of Securities,” Mina wrote in an email. “Mr. Brooks has cooperated fully with that request.”
Mina said that because a lawsuit is still pending against Brooks, he could not comment further.
LITTLE SUCCESS WITH SALVAGE
Late last year, an investigation by the Portland Press Herald showed that, although public records do not exist for all of Brooks’ treasure hunts, information that is available from court documents, newspaper stories, his own news releases and people familiar with his operations indicate that he has had little success in his salvage efforts.
Brooks has been able to keep his salvage operations going because he has been able to convince investors that he knows where treasure is located. But those investors have started to publicly question Brooks, even though they knew they were taking a financial risk.
In December, Denny Denham of Gray told the Press Herald that he invested money in six figures in 2003 to finance one of Brooks’ treasure hunts off the Florida Keys. That salvage, of a Spanish ship called the Notre Dame de la Deliverance, quietly expired without recovering anything of value, even though Brooks had said the ship contained an estimated $3 billion.
Denham said he believes he may have been misled by Brooks.
“I know plenty of other investors who feel they were duped, too,” he said last year. “But I think they are staying quiet because they still have a small sliver of hope.”
Many well-respected figures in the underwater salvage industry have long suspected that Brooks and his associates have told tall tales or conveniently left out key facts about salvage operations, to keep investments coming in.
“If you look at the body of evidence, at what they have claimed and what they have delivered on, there is just nothing there,” Chris Hugo, a maritime historian and master diver from Massachusetts, said last year.
Harry Cooper, president of the Florida firm Sharkhunters International and an expert on U-boats, has followed Brooks and his research partner, Edward Michaud of Framingham, Mass., since the early 1990s, when both men were searching for U-boats – Brooks off Casco Bay and Michaud off Cape Cod. Cooper said he thinks the two men were loose with the facts then.
“I wouldn’t invest a dime with these guys,” Cooper said. “What I research is not a well-known section of history, but it’s romanticized. So it’s easy to sell to investors if you’re a good storyteller. And people want to believe.”
COURT COMPLAINT FILEd
The SS Port Nicholson was a 481-foot British cargo vessel that was sunk by a German U-boat during World War II. It’s one of thousands of wrecks that clutter the floor of the Atlantic Ocean. Before Brooks, the wreck attracted little attention for two reasons: The ship has scant historical value, and its only known cargo was car and machine parts.
But Brooks and his supporters say there’s more. He first filed a salvage claim on the wreck in August 2008. A judge granted him temporary custody the next year. Brooks began courting investors to fund the salvage.
In status reports filed in court, Brooks blamed faulty equipment, bad weather and insufficient funding for his failure to salvage anything.
In February 2012, Brooks announced that his crew had recovered artifacts proving the wreck was indeed the Nicholson. He also said that he and his researchers – led by Michaud – had uncovered documents indicating that it contained a secret bounty that was meant to be a war payment. The story was picked up by news outlets all over the world.
The timing was fortuitous: Sea Hunters had run out of money. Brooks’ media blitz helped generate buzz and lure more investors.
But status reports filed with the court suggested that Brooks and his crew were still not successful.
About a year ago, Brooks continued to assert that the Nicholson was filled with platinum.
“I’m going to get it, one way or the other, even if I have to lift the ship out of the water,” Brooks told a reporter in April 2013.
A month later, Brooks emailed investors and suggested that he was abandoning his search because funding for the project had dried up.
“The sinking of the Port Nicholson will begin at the end of the week,” he wrote. “Only God can save her now.”
One month after that, some of the investors who had bankrolled Brooks’ salvage efforts to the tune of $8 million filed a complaint in U.S. District Court seeking to gain control of the salvage.
“The actions of Sea Hunters and its affiliates have been more akin to building a long-term operating company with perpetual capital raises rather than accomplishing a single project as required by this court,” wrote Daniel Stochel, the lead plaintiff.
By late fall, Brooks’ salvage ship was for sale and most of his crew had been laid off.
In addition to the complaint filed by Mission Recovery, the group of investors, Brooks has been sued by a Texas company called Deep Down Inc., which claims he failed to pay more than $130,000 for services. The lawsuit, also filed in U.S. District Court, is still pending.
Some of Brooks’ research documents are now in question, according to court filings by his attorney, but Brooks and his supporters have stood by their work.
Brian Ryder, chief engineer for Brooks with Sub Sea Research for the last 12 years, said in December that he still believes in Brooks.
Eric Russell can be contacted at 791-6344 or at: