In the annals of maritime history, there is probably no greater fraud than a story about a shipwreck called the San Lorenzo de Escorial. This story purported to solve a centuries old mystery about where the horses that run wild on Assateague Island came from. The pervasive legend is that a they swam ashore from a wrecked Spanish ship centuries ago. This legend became world renowned in 1947 when Marguerite Henry published Misty of Chincoteague. She documents the legend through the real life character of Clarence “Grandpa” Beebe who, in the book, tells his grandchildren, “All the wild herds on Assateague be descendants of a bunch of Spanish hosses.”
In 1976, a man named Donald Stewart left the USS Constellation in Baltimore Harbor after twenty years of employment midst a swirly controversy about the true identity of the ship that many wanted to believe was the original that was built in Baltimore in 1797. The truth is, it wasn’t built in Baltimore in 1797 but it was the second Constellation which was built at Norfolk, Virginia, in 1854. Experts from the government and maritime preservation circles had been misled by some forged documents that had been placed in the National Archives that proved that the ship in Baltimore Harbor was the original Constellation. Stewart would be the one who “found” them. What made these documents so convincing was that they bore the National Archives stamp. The FBI was called in and declared at least one document a forgery. Years later, naval experts declared that the ship in Baltimore was the one built in Norfolk in 1854 and proved that the original Constellation had been dismantled in Norfolk prior to building the new one. But this was too late. Millions of dollars had been spent and reputations squandered by the followers of Donald Stewart.
Stewart was allowed to leave Baltimore quietly and he decided that Ocean City, Maryland, would make a nice home. He also saw the opportunity to pursue a lifelong fantasy: he wanted to hunt for sunken treasure.
The following year, Stewart created a scheme to capitalize on the popularity of the Assateague horses and the shipwreck legend. His plan was to lay the groundwork for a treasure hunt off of Ocean City, Maryland and solicit investors. What makes this fraud so incredulous is that Stewart ultimately seduced the federal government, newspaper editors, attorneys, judges, investors and the public at large with his highly creative but totally untrue story.
In 1949, the twenty-year-old Donald Stewart had read an article that appeared in the Baltimore Sun. This article described a Spanish warship named the Greyhound (in Spanish, La Galga) which had run ashore on Assateague Island in 1750. A second ship, called the Ocean Bird, “sank near Ocean City” in a storm on January 5, 1799. The article also described a third unidentified Spanish ship that was believed to have wrecked on the shoals off of Ocean City in 1820. The reporter who wrote the story gave the date of 1820 because that was the last date on the Spanish coins that had washed up on the beach and found by beachcombers. The reporter did not realize that Spanish coins were legal currency up until the Civil War and would be found on any ship sailing along the American Coast. These three shipwrecks would become central to his future schemes.
Over the years, Stewart’s fantasies grew. He realized that if he could identify the mystery ship he had read about he could establish his bona fides in Ocean City. With this recognition, he might be able to organize a treasure hunt and go after what he fantasized as a huge sunken treasure. He believed that when he found the treasure nobody would care about the real identity. He was convinced he could easily find it.
In 1977, he wrote an article for the Baltimore Sun entitled “The Wild Ponies of Assateague Island: A New Look.” It appeared in the magazine section on Sunday, July 24. Just weeks before, Stewart and his wife incorporated The Atlantic Ship Historical Society, a non-profit 501(c) (3) corporation. Not only could he now solicit tax free donations, but being president of a historical society was a great resume enhancer. Before he was even incorporated, he wrote to the superintendant of the Assateague Island National Seashore and asked for a permit to explore for shipwrecks along the Maryland section of Assateague. He dubbed his adventure “Project SEA” for “Ship Exploration and Archaeology.” Two days before his article would appear in the Baltimore Sun, he wrote again to the superintendant of Assateague and told him about his upcoming article on the San Lorenzo where he documented this make-believe shipwreck as the source of the wild ponies on Assateague. He even went so far as to blend in some details from Marguerite Henry’s Misty of Chincoteague. A nice touch, but Mrs. Henry’s book is totally fictional when it comes to describing the legendary Spanish shipwreck.
After Stewart’s article appeared in the Sun, it was read by National Park Service personnel who became intrigued. It seemed that Stewart had solved a mystery that had nagged modern historians for decades. But the Park Service was equally captivated by the description of treasure on the San Lorenzo. Stewart described gold doubloons, gold and silver bars, pieces of eight, and a solid gold statue of the Virgin Mary—a treasure worth millions.
Stewart prefaced his story by describing his incredible find in the archives of Spain of 894 pages of testimony of the sole survivor of the San Lorenzo named “Pedro Murphy.” Also in the Spanish documents he claimed was a receipt for transporting 110 horses to Spain. To corroborate the horses swimming ashore and surviving on Assateague, Stewart invented the “Journal of Henry Lloyd.” This “journal” recounts “Henry Lloyd’s” visit to Assateague in 1826 where he counted “45 small horses no larger than a hound.” Henry Lloyd was said to be the surveyor of Dorchester County, Maryland. For anybody willing to look, they would have found that a Matthew Smith was the surveyor.
The Park Service was anxious to get more from Stewart about the San Lorenzo. He prepared eleven pages of so-called sources and notes for his story which he turned over to them. The Park Service did no verification of his research and then built a wayside exhibit about the San Lorenzo at the Park Headquarters building in Berlin, MD. In 1980, the Park Service gave a full account of the San Lorenzo in their Assateague Island Handbook.
The Park Service was happy to cooperate with Donald Stewart, the president of Atlantic Ship Historical Society and past “director” of the Constellation in Baltimore. He got his permit to explore Assateague.
Stewart’s first archaeological “discovery” was that of the “Ocean Bird.” A rotting hulk of a wreck had over the years uncovered and recovered with sand on the beach where the former inlet called Sinepuxent was located about fifteen miles south of Ocean City Inlet. The Park Service was amazed that Stewart was able to recover artifacts from this shipwreck lying on the beach that at times was swept clean of sand during storms. In Stewart’s written report on his “archaeological investigation” he included a history of the Ocean Bird and her captain, James Carhart. But there was no real ship called the “Ocean Bird.” Captain Carhart’s ship was called the Hawke which was wrecked near 22nd Street on Ocean City on January 5, 1799. She had sailed from Havana, Cuba, with a cargo of sugar destined for Philadelphia. His tombstone can be seen today in what is called Captain’s Hill in West Ocean City. This was a clear case demonstrating that for Stewart it was easier to make up history rather than go to the archives or libraries where he could ascertain the truth. With the date of January 5, 1799, and Carhart’s name on the gravestone, it was an easy task to get the particulars of the shipwreck in the Philadelphia newspapers.
Stewart also made another discovery on Assateague. He claimed to have found a Papal medal of Pope Gregory with the date of 1572 near the Maryland-Virginia line. Stewart told the newspapers his discovery proved that the Spanish were in Maryland and Virginia before John Smith founded Jamestown. Fortunately, experts at the Smithsonian didn’t bite.
Stewart volunteered to write articles about shipwrecks for the Maryland Beachcomber in Ocean City. The paper was happy to print them for the entertainment of the summer tourists. On April 18, 1980, he published in the Beachcomber an article entitled “Of Hurricanes and Spanish Galleons,” a story about treasure galleons called Conquistadore and Santa Teresa which had sailed with the Nuestra Señora de la Concepcíon in 1641. The Concepcíon was a fabulous treasure ship lost off the Dominican Republic which was discovered in 1978 by Burt Webber. Stewart said that the Conquistadore and Santa Teresa had wrecked on Virginia’s Eastern Shore. Spanish records prove the Santa Teresa had sailed with another fleet and safely arrived at Spain. There is no record in the Spanish archives to support the existence of the Conquistadore.
Stewart’s contributions to the Beachcomber were no doubt seen by Park Service personnel. His stream of phony articles no doubt looked impressive to them. Now, with the inadvertent help of the National Park Service, the foundation for his next fraud was laid. In that same year, Stewart set up a treasure hunting company called Subaqueous Exploration and Archaeology, Ltd. (SEA). He was going to search for the Spanish warship, La Galga, which ran ashore on Assateague Island on September 5, 1750. He would claim there was millions to be recovered. He would stop at nothing. In 1978, he found out about a would be competitor named Albert Alberi in Virginia Beach. In order to not only discourage Alberi from his treasure hunt but to con him out of his research, he wrote and told him that his historical society had already found La Galga. What would happen next can only be characterized, in legal terms, as a fraud upon the whole world.
P.S. By 1982, the truth began to surface when Spanish coins found on the beach were showing dates after 1820, dating to at least 1826. This prompted archival investigations in American and Spanish archives which proved that the San Lorenzo was a hoax. Research also suggests now that the coins came from an American brig called the Samaritan which drove ashore on what is now Ocean City in December of 1830. The Samaritan had come from Havana, Cuba, and was destined for Newburyport, MA. The documentation Stewart provided the National Park Service on his San Lorenzo was easily picked apart. In 1985, Park Service would disavow the San Lorenzo, take down the San Lorenzo exhibit, and reprint the Assateague Island Handbook without Stewart’s phony story. But the discovery would come too late. Stewart had filed claims in the United States District Court for the District of Maryland to four non-existent shipwrecks in the hopes of attracting investors. And they came.
For more on this story read The Hidden Galleon