Florida Keys News - Key West Citizen
Tuesday, January 14, 2014
Wealthy investors kick-start emerald trial
Testimony at trial reveals an early unraveling of treasure story

Almost as soon as an amateur treasure salvor, now deceased, lured well-heeled and wealthy New York City investors with claims of millions in emerald riches found in waters off Key West, things began falling apart, according to testimony in federal court Monday during the first day of trial.

So it was in the spring of 2010 when Jay Miscovich -- a former Mel Fisher investor and real estate businessman -- was able to convince Dean Barr, a Big Apple millionaire and former Citigroup hedge fund executive, to invest in the emerald find.

Miscovich killed himself in October as his legal row with the Fisher company, Motivation, swelled amid claims that he concocted his story as part of a scam to separate wealthy investors like Barr from their money, according to court records.

Motivation sued Miscovich's company, JTR Enterprises, in 2012 in Key West challenging his claim, and in January 2013 the federal court ruled that JTR failed to prove the gemstones were found on the seafloor.

Although JTR can keep the emeralds, the ruling means the jewels are not "court-validated" sunken treasure, which hurts their value.

The Fisher group has since told the court it doesn't want the emeralds, saying they are worth about $50,000 and not the millions JTR once purported.

Miscovich had appealed King's ruling to the U.S. Court of Appeals for the 11th Circuit in Atlanta, and that appeal is still pending.

Regardless, Fisher's lawyers want JTR to pay the company's "sanctions," or legal fees, which are approaching a million dollars after three years of litigation.

"I'm here because I lost a significant amount of money and because I want to get to the bottom of why and who is responsible," Barr testified.

Barr brought another wealthy investor, Neil Ash, a well-connected New York accountant, into the fold early on in 2010 shortly after Miscovich claimed to have found the cache of emeralds some 40 miles off Key West in international waters.

Together, the well-connected businessmen formed a company called Emerald Reef with Miscovich and his brother, Hawaiian doctor Scott Miscovich, and former Navy sailor Steve Elchlepp Jr.

Elchlepp took the stand Monday and promptly invoked his Fifth Amendment right to not incriminate himself as he is currently under criminal investigation by the U.S. Attorney's Office.

Emerald Reef folded in 2011 following a lawsuit in Delaware with a $5 million settlement between Miscovich and Ash and Barr, according to court records.

Ash and Barr both testified that by the end of their professional relationship with Miscovich, both were out more than $1 million.

Both men told the court that by the fall of 2010 they suspected something was wrong when the emeralds went missing in a New York City bank vault.

By September 2010, "We realized we simply could not trust Jay or Steve," Ash testified.

Jay and Scott Miscovich and Elchlepp subsequently formed the new company -- JTR Enterprises -- after the Ash and Barr litigation.

Ash also testified that a former Emerald Reef attorney for Miscovich named Bruce Silverstein -- with the prominent corporate firm Young Conaway Stargatt Taylor of Wilmington, Del. -- sent him threatening letters urging him not to testify at this week's sanctions trial.

Fisher lawyers have also accused Silverstein in court papers of being a part of the alleged emerald conspiracy, but Silverstein was not in court Monday.

Elchlepp and Miscovich both testified previously during the 2012 trial in Key West that they dove about 50 feet under the water surface and found the gems scattered on the ocean floor. The Fisher company now claims that was a ruse, and that Miscovich bought the stones from gem dealers elsewhere in Florida, according to court records.

The sanctions trial is expected to go into Wednesday.


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