THIS WEEK'S TOP STORIES
Courts: Treasure hunter sues Goldfinch over failed deal
By Jason Lesley
State Rep. Stephen Goldfinch’s partner in underwater exploration has turned his hopes of striking it rich to the federal courts in Texas. He is suing the Murrells Inlet lawyer for $250,000.
William E. Kenon of Port Isabel, Texas, has accused Goldfinch, a freshman in the state House of Representatives, with breach of fiduciary duty in a treasure-hunting venture, according to documents filed in the U.S. District Court in Brownsville, Texas.
“It’s baseless, completely frivolous,” Goldfinch said. “This guy has lost his mind. It’s pretty sad to see it happen. He’s getting dementia or something. I don’t know what’s going on with him.”
Kenon’s lawyer, Jim Hunter Jr., said his client is well respected in the Gulf’s marine salvage industry. “It’s not just shipwrecks,” Hunter said, “he works in the offshore oil and gas industry and marine construction. I think if you Google him, you’ll find he’s a pretty solid guy and has a good reputation. Mr. Goldfinch says things that suit his needs, in my opinion. I’m a seasoned litigator, and I don’t take lawsuits unless I have plenty of evidence.”
The civil complaint says Goldfinch made an unsolicited call to Kenon in June 2012 while Kenon’s treasure-hunting vessel, the Rio Bravo, was exploring a shipwreck called The North Carolina off the South Carolina coast. The Rio Bravo has a unique system to blow silt, sand and mud from the ocean floor to uncover shipwrecks and artifacts.
“Goldfinch told Mr. Kenon he was a lawyer and a state legislator who was also a diver and treasure hunter,” the suit says. “Goldfinch told Mr. Kenon he knew of two other shipwrecks which could be salvaged, and he had a money-making proposition for Mr. Kenon.”
Goldfinch said he could share his knowledge about the wrecks and provide divers for the Rio Bravo, according to the civil complaint, which also stated that Goldfinch would be the lawyer for the venture.
Goldfinch said Kenon contacted him first, going through the dive shop at Murrells Inlet to get his phone number.
“In August or July of 2012, Billy Kenon contacted me and said, ‘Look, I’m coming to do some salvage work and heard you had some commercial shipwrecks. If you’d be interested in sharing some of the numbers with me, I’d be interested in talking.’”
The suit claims the Brownsville court has jurisdiction because Goldfinch solicited Kenon in Texas by phone, and the events giving rise to the claim occurred there through phone calls and e-mails.
Kenon’s suit says the men met in September 2012, and Goldfinch repeated that he was a South Carolina lawyer and influential state legislator, very knowledgeable about shipwrecks and diving, and he had a knack for business deals. The suit also said Goldfinch bragged about making $5 million from the sale and distribution of stem cells in Texas.
“Goldfinch also told Mr. Kenon that due to his position and influence as a powerful lawyer and state legislator, he could obtain the necessary approvals for Mr. Kenon to explore state inland waters and rivers when offshore conditions were unfavorable,” the complaint says.
Goldfinch said Kenon’s story is not true. “I never tell clients I’m a legislator because politicians are hated,” Goldfinch said. “No. 1, it’s just not me. No. 2, we signed that agreement before I was a legislator. If it ever gets served on me, you’ll see counterclaims flying left and right.”
Goldfinch, his partner Kent Rogerson of Pawleys Island and Kenon signed a salvage agreement in 2012. With Kenon putting up the salvage boat and paying the costs, he was to get 70 percent of the value of anything found with Goldfinch and Rogerson splitting the remainder.
The partners began planning salvage operations on the wrecks known as The Carolyne, The Bottle Wreck and The Copper Pot. “We got to working on shipwrecks,” Goldfinch said, “and found a number of things. It looked like there may be something worthwhile or valuable, so we decided to do a federal arrest of the wreck, giving us the salvage rights.” He said the partners hired a maritime lawyer who suggested they form a limited liability corporation.
The divers had some success but lost part of a valuable find to thieves. A January 2012 report in the Georgetown County Sheriff’s Office said recovered items valued at between $25,000 and $100,000 were taken off a salvage ship docked in Georgetown.
Kenon said in his civil complaint that he trusted Goldfinch to draft the incorporation documents, but as time passed Goldfinch wouldn’t show him the papers and he became increasingly concerned.
Kenon’s civil complaint alleges that Goldfinch drafted the documents in such a way that he and Rogerson could take control of the entire company.
Goldfinch said the papers incorporated the language of the finders agreement and the LLC made no attempt to take over the business from Kenon. The LLC, he said, is on file in the S.C. Secretary of State’s office.
The suit says Kenon repeatedly requested that Goldfinch redraft the operating agreement to be consistent with the finders agreement, but he refused. “Instead, Goldfinch emphasized that he was a very powerful lawyer and legislator in South Carolina, and if Mr. Kenon wanted Goldfinch out of the picture, it was going to cost Mr. Kenon money to take him out,” the document says. “Concerned with Goldfinch’s influence and threats, Mr. Kenon, on December 6, 2013, asked Goldfinch, by phone, what it would take to buy him out. Goldfinch refused to give Mr. Kenon a figure. Frustrated with Goldfinch’s cavalier attitude, Mr. Kenon was fed up. He advised Goldfinch he was going to be left with no choice but to sue Goldfinch to correct the wrongs Goldfinch committed. Later that day on December 6, 2013, Goldfinch sent to Mr. Kenon, in Port Isabel, a self-serving e-mail which attempted to paint Mr. Kenon as an extortionist for exercising his right to sue Goldfinch. He advised Mr. Kenon he would spend less money paying Goldfinch off than suing him. Goldfinch further threatened to ruin Mr. Kenon’s reputation if Mr. Kenon didn’t ‘take the deal.’”
Goldfinch said Kenon called him two weeks ago, hoping to force him out of the business by making his life “a living hell” by rehashing the details of a federal case involving mislabeled stem cells. Goldfinch owned the company, Caledonia Consulting, that sold the cells to Francisco Morales, who is coincidently a Brownsville, Texas, resident. Morales pleaded guilty in September 2012 to conspiracy to introduce misbranded and unapproved drugs into interstate commerce. Morales and Illinois resident Lawrence Stowe, admitted to falsely representing that they were licensed to practice medicine and that they operated medical clinics in Brownsville. Another of Goldfinch’s business associates, Vincent Dammai, also pleaded guilty to mislabeling drugs. Goldfinch said he accepted responsibility for the company’s actions and pleaded guilty to a misdemeanor in the case, even though he knew nothing about his associates’ actions.
Goldfinch said Kenon hoped to use the stem cell case to cause trouble for him. “He said, ‘You’ve got a lot to lose. You’ve got trouble going on with the media right now.’ He’s trying to put pressure on me because he thinks I’m weak right now. I don’t like being threatened. I told him to bring it on, if that’s what he wanted to do.”