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The trouble with treasure

(CBS News) A man walks into a bar...it sounds like the setup to a joke, but that's how this story begins. Amateur diver Jay Miscovich walks into a bar in Key West, Florida, is shown a treasure map and a shard of pottery by a diver friend, and then -- although he's almost broke -- buys the map, convinced there is treasure and fortune to be found deep in the Gulf waters off Florida. Three year later, there's certainly plenty of treasure -- Miscovich says he's discovered tens of thousands of emeralds -- but so far no fortune. Armen Keteyian reports.


The following script is from "The Trouble with Treasure" which originally aired on April 22, 2012. Armen Keteyian is the correspondent. Andrew Metz, Len Tepper and Oriana Zill de Granados, producers.

Last year, we got wind of a story that seemed -- on the surface -- too good to be true. An amateur diver and part-time treasure hunter had made one of the largest discoveries of sunken treasure in history: a sea bed covered in raw emeralds off the coast of Key West, Florida.

We were able to track him down at his home in Pennsylvania. He's an unassuming real estate investor by the name of Jay Miscovich.

He poured out a laundry basket full of emeralds before our eyes and said he believed they were worth hundreds of millions of dollars and likely came from an ancient shipwreck. What's more, he said, Wall Street investors were backing him and the Smithsonian was buzzing.

We set out to get to the bottom of the story only to discover just like those pirate tales of old, there's trouble, lots of trouble with treasure.

Our search began on dry land, on Madison Avenue to be exact, at one of New York City's high-end jewelry stores.

[Armen Keteyian: Look at that!]

Jay Miscovich showed off a sample of his find.

Jay Miscovich: We've brought up over 80 pounds so far. This-- you are seeing probably 30 pounds of it here.

Greg Kwiat: That is an impressive pile.

Ed Peterson: Holy cow.

Armen Keteyian: Any question on the authenticity of these stones, at all?

Ed Peterson: No. No this is the real McCoy.

Gemologist Ed Peterson and owner Greg Kwiat could hardly believe their eyes.

Greg Kwiat: I think this piece could go to the Oscars.

Armen Keteyian: Is it possible to put a price on something like that?

Greg Kwiat: We're only halfway through the first case. The question will be what the provenance is. If it is something exciting or sexy, it could add a lot of value to the stone. It could double or triple the value of the emeralds themselves.

The provenance -- the origin -- that Miscovich had hoped for was emeralds from an ancient shipwreck, adding potentially tens of millions of dollars to the value. But he had no proof so gem specialists couldn't put an age or price on the gems.

Jay Miscovich: You know, I don't claim to be a gemologist. I mean, I knew what I knew about emeralds is they were green and they-- the good ones came from Colombia. That's about all I knew.

To help, we enlisted Tom Moses here at the Gemological Institute of America.

Tom Moses: What this tells us it's another piece of the puzzle that indicates that the emeralds originate from Colombia.

Exactly what Miscovich wanted to hear because for centuries Spanish, Dutch, even pirate ships, had ferried Colombian emeralds across these waters off the coast of Key West.

So, that's where we headed next, to this haven for drifters and dreamers.

Armen Keteyian: A lot of people come here to escape, to lead a double life so to speak. What brought you here from Latrobe, Pennsylvania?

Jay Miscovich: Um, the adventure, you know, the adventure and the sea, the ocean, and the lure of the treasure.

For years, Miscovich says he went back and forth from Pennsylvania, pouring profits from real estate deals into dive after empty dive.

Jay Miscovich: It-- it's a total obsession. I've put my life savings into treasure salvage.

But by late 2009, the housing market was crashing, and he was caught holding seven properties he couldn't sell. Nearly broke, he borrowed money from friends and kept feeding his obsession.

Armen Keteyian: You never really stopped believing that you are going to find something...

Jay Miscovich: Yep, absolutely.

Armen Keteyian: ...that is going to change your life?

Jay Miscovich: Absolutely.

As unbelievable as it sounds, he says, it happened in this bar.

Armen Keteyian: This is the bar?

Jay Miscovich: It's the one that changed my life, right here.

He says he met up with a down-on-his-luck diver he'd been friends with for years. His friend claimed he'd found a piece of ancient pink pottery while diving out in the Gulf but didn't have the money to explore further. He offered to sell Miscovich a nautical map to the site.

Armen Keteyian: So what does he say to you that convinces you that this map has any authenticity to it?

Jay Miscovich: Well, he just said, basically, "I found this on the site." When he showed me this encrusted -- that's not clean -- we didn't clean it -- this encrusted piece of pottery, I immediately got very excited. Because knowing this is absolutely, 100 percent, a colonial era piece of pottery.

Miscovich says he paid his friend $500 for the map. We wanted to confirm the story. But Miscovich refused to give us the man's name or whereabouts, saying he paid him $50,000 more after finding the emeralds in exchange for signing away all rights to the treasure.

Armen Keteyian: Why have the circumstances surrounding the man who sold you the map been such a sensitive and secret part of the story?

Jay Miscovich: I wouldn't say it is a secret part of the story. I mean, we signed, I had attorneys prepare legal agreements. I felt he should be compensated after I made the big find but it may not even be even the wreck that he was diving on. So we are not sure but it did put us out there that day.

On that day, Miscovich and his longtime dive partner Steve Elchlepp, followed the map and GPS coordinates to the site of the supposed wreck. They say they didn't detect anything below right there, but while searching about a mile and a half away, they got a hit on their metal detector, and dove in to investigate.

Jay Miscovich: There was a pile of beer cans down there. We saw seven beer cans.

Then he saw something else.

Jay Miscovich: I thought it was glass. And then, I picked it up, and I realized how large and how roundish these things were. And I'm looking at them and thinking, "That couldn't be." And then, I'm looking and looking, and said, "That had to be." So I just signaled to Steve. I said, "Let's go up."

[Jay Miscovich: Look how gorgeous.]

They later shot this video at the site.

[Steve Elchlepp: Oh wow.

Jay Miscovich: Look at that one.]

They thought they'd made a historic find.

MISCOVICH: Just breathtaking, look at that.

[Steve Elchlepp: That is unreal.

Jay Miscovich: Look at the size of that.}

Over the next two years, they used emeralds like this to convince a handful of investors to put up hundreds of thousands of dollars to fund some 20 trips to the site, where they say they've retrieved emeralds of every shape, size and quality.

Jay Miscovich: We have more than 65,000 emeralds on the surface already.

Armen Keteyian: That you've brought up from the bottom of the Gulf?

Jay Miscovich: Yes. And the amazing part is every time we go down, we see a lot of them. I mean, there's still a huge amount down there.

Few people know more about the laws of sunken treasure than Key West attorney David Horan. Miscovich sought him out for help.

Armen Keteyian: You must have heard some wild stories over the years, "Hey, I found this, I found that."

David Horan: By the way, this may be one of the wildest.

Armen Keteyian: Really?

David Horan: Oh yeah, Oh yeah. "I found a whole bunch of emeralds and amethyst and quartz crystals all over the bottom." Yeah right.

Armen Keteyian: So as he's, as he's telling you the story, you're thinking what?

David Horan: I gotta see this.

That's what we were thinking too. We needed to see the site for ourselves.

Armen Keteyian: How many people know the exact coordinates?

Jay Miscovich: Three know the exact coordinates.

Armen Keteyian: So three in the entire world?

Jay Miscovich: Three people in the entire world have the coordinates.

We headed four and a half hours into the Gulf, to an expanse of open water, a graveyard of ships sunk by hurricanes and pirates.

Armen Keteyian: Wow. We are in the middle of ever lovin' nowhere.

Within minutes, they plunged in.

Our camera crew was right behind, diving 60 feet below into the murky water.

There, sitting proper on the silty bottom, was what we had been promised, glittering specks of green.

[Armen Keteyian: Wow. Holy cow.]

Soon our hands were full of rough emeralds, with some amethyst mixed in.

Duncan Mathewson: I've never seen so many emeralds coming from such a small part of the ocean floor before in my life.

Marine archeologist Duncan Mathewson specializes in shipwrecks of the Florida Keys. He is helping Miscovich try to solve this mystery -- how such an enormous collection of emeralds ended up out here.

Duncan Mathewson: This is backwards. Normally you find a part of a ship and its wreckage and then you look for its cargo. This time we are finding cargo and now we got to try to find the rest part of the ship.

They've found other ship wreckage: musket balls, cannon balls and part of an old ship hull. But also, some of the emeralds are scattered near the metal beams of a merchant ship that sunk during World War II. We went so far as to dig out a copy of that ship's manifest at the National Archives, but emeralds weren't listed as official cargo.

Armen Keteyian: You have emeralds next to beer cans, next to musket balls, next to cannon balls, next to steel beams.

Jay Miscovich: Right.

Armen Keteyian: What does that say to you?

Jay Miscovich: Well, that's not unusual in the Florida Straits, in the Florida Keys and on the whole coast of Florida. We have many times found two and three wrecks even on top of each other.

Armen Keteyian: But still no real answers, right?

Jay Miscovich: No. We know that we have remnants of a colonial era ancient wreck but what we also have is several other possibilities. The Coast Guard's constantly chasing drug runners through here. Did they-- were they smuggling drugs and emeralds into the country? And did they jettison them when the Coast Guard was chasing 'em and throw them overboard 20 years ago?

David Horan: We don't have a clue as to whose wreck it was and how it got there.

[Jay Miscovich: Holy cow!]

It was only after diving the site himself that David Horan agreed to represent Miscovich.

[David Horan: Mark that. When we get title, I want that one.]

David Horan: There's just an unbelievable amount of emeralds.

Armen Keteyian: Did Jay understand legally what he had found -- what the implications of what he had found--

David Horan: He didn't understand the implications as to title. Possession was, in his mind, 99.9 percent of the law.

But the law is not that simple.

[Jay Miscovich: We got some amazing stuff today!]

It's not finder's keepers, although Miscovich could have quietly sold his treasure on the black market. Instead, he hired Horan, who then convinced the federal court in Key West to give Miscovich temporary custody of everything he finds, but it could be years before the court awards full ownership. Until then, Miscovich can't legally sell a single stone.

David Horan: He's emerald rich and cash poor.

Armen Keteyian: Jay said a lotta people have told him, "You should've just taken the emeralds and essentially run, cashed in, cashed out."

David Horan: He had that option and he didn't do it. And--um-- could he be faulted for it? I'm not sure anybody really wants to get into the fight that you get into-- it's the trouble with treasure. That's what it is. And there's a lotta trouble that comes with finding treasure.

For Jay Miscovich, his biggest trouble came in January, when a company that was looking to market his emeralds sent a few dozen to Europe for special testing. Only to discover that some of the gems had been treated with a jeweler's polish or epoxy, routinely used to enhance the brightness of emeralds. Polish that has only been in use for the past 50 years or so.

Armen Keteyian: This epoxy or polish begs the question: did you put it on the emeralds?

Jay Miscovich: No, absolutely not.

Armen Keteyian: Any idea how it got there?

Jay Miscovich: No, no. And the other thing is -- it's amazing -- of the many experts we've called, just in the last couple of weeks, they all say it's almost unheard of to put -- to treat raw emeralds.

He says he wants to test more of the emeralds, but his investors are drying up. Today, he finds himself nearly $10 million in debt to his original investors and lawyers - conceivably more than the emeralds will be worth.

Jay Miscovich: This is where I live, right here.

Which is why he's living like a pauper in his dive partner's spare room.

Jay Miscovich: I sleep in the kids' bunk bed here, the extra bunk bed. My feet hang out the bottom of it.

Adding to his troubles, other treasure hunters are challenging the find, accusing him of everything from stealing the emeralds, to buying and planting them.

Armen Keteyian: A lotta people have been suspicious of this find and of you from the start. That you're running some kinda scam here.

Jay Miscovich: Right.

Armen Keteyian: What do you say to that?

Jay Miscovich: Those allegations are absolutely frivolous, they're ridiculous.

Armen Keteyian: Do you believe, given what you know now, that these emeralds could've still come from an ancient wreck?

Jay Miscovich: I think it's less likely -- um, it's more romantic if we could ascertain that it was a pirate ship, a great sailing ship, which is what we thought we had. But because of the huge number, the value is still gonna be extremely significant. I'm hoping in the next dive season, in the next six months, we solve this mystery. I hope we do.

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