LAWYERS WEEKLY USA (Week of January 13, 1997) By Bill Ibelle

Photo by Ken Cheatham

* Type of Case: Theft of treasure, torture and imprisonment

* Date of Verdict: July 19

* Court: Honolulu Circuit Court, Hawaii

* Status: ON APPEAL

* Plaintiff's Attorneys: Peter and Daniel Cathcart, Magina, Cathcart &

* McCarthy, Los Angeles

* Size of Firm: Eight lawyers

* Defense Attorneys: James Linn, Linn & Neville, Oklahoma City

* Size of Firm: Seven lawyers

When Daniel Cathcart was offered the case that would win him a $22 billion verdict, the largest verdict in U.S. history, he threw the letter in the trash.

"It sounded kooky," says Cathcart. Kooky is an understatement.

The letter told the tale of the theft of a fortune's worth of gold bars as well as a three-foot statue of 22-carat gold that was said to have a hollow chest cavity stuffed with diamonds. But few had ever seen the treasure or the "Golden Buddha," and there was no definitive proof they even existed.

"I got that letter 10 years ago, and it was accompanied by an article that looked like it came from a supermarket tabloid," recalls Cathcart. "I put it in the wastebasket, and it stayed there until I finished reading all my other mail. Then I pulled it out and read it again."

Cathcart decided that a tale this bizarre was at least worthy of a phone call. That call was the beginning of a 10-year roller coaster ride that would end in what he unabashedly calls, "The biggest verdict in the history of planet earth!"

By the time Cathcart was finished, he had developed a case that involved a plundering army, an executed Japanese general, tunnels lined with boxes of gold bars, steaming Philippine jungles, coded maps, torture, an amateur treasure hunter and, finally, the defendants -- deposed Filipino dictator Ferdinand Marcos and his widow Imelda.

In the midst of the trial, Judge Marie Milks is reported to have said: "All we need now is Indiana Jones."

Almost all of the award was for the theft of the gold bars and the Buddha. The jury also awarded several million dollars on the torture claim.

Now that Cathcart has the verdict, the struggle will be to collect. Cathcart has already gotten an attachment on a Swiss bank account that contains $450 million and says he has tracked portions of the Marcos' vast fortune to locations around the world.

A Fantastic Footnote to History

The origin of the gold treasure is shrouded in mystery. According to rumor, it was stolen by the Japanese Imperial Army as it plundered dozens of Asian nations in the years leading up to World War II, with the Buddha being seized from Burma.

The treasure is said to have arrived in the Philippines along with Gen. Yomouki Yamashita, known as "The Tiger of Malaya," who was executed for war crimes following World War II. His vast treasure was never found, and Yamashita was rumored to have buried it in secret tunnels somewhere on the island during the waning days of the war.

But no one knew where. Treasure hunters, driven by visions of unparalleled riches, searched for decades without success. Among these gold-hungry adventurers was a little-known Filipino guerilla fighter named Ferdinand Marcos.

But the jury concluded that a 27-year-old locksmith with a fourth-grade education beat him to it.

In January 1971, the locksmith, Rogelio "Roger" Roxas, met a man of mixed Filipino/Japanese descent whose father had been a translator for Gen. Yamashita during the war. When the man was 15 years old, his father had taken him into the jungles behind the hospital in Baguio City to show him tunnels lined with boxes of gold. The father had left a map, but the man had no luck relocating the treasure and eventually burned the map in frustration, only to learn from his sister that the map was intended to be read backwards in a mirror.

Despairing at his stupidity, the man contacted Roxas, who was known locally for his exploits as an amateur treasurer hunter.

Later that month, Roxas hit paydirt. He broke into a tunnel that was lined, floor to ceiling, with more than 1,000 boxes of gold bullion. Among all the boxes, Roxas also found the Golden Buddha, a metric ton of solid gold (1.1 U.S. tons).

With the help of 10 friends, Roxas hauled the Buddha and a few bars of gold to the surface and then closed the tunnel opening with dynamite. His plan was to sell the gold and the Buddha to raise the money needed to excavate the rest of the treasure.

"When he got the Buddha back to his house, he discovered that the head was detachable and there were three huge handfuls of diamonds in the statue's hollow stomach," says Cathcart.

Rumors of the historic find spread quickly and soon made their way to the royal palace, which was then home to President-For-Life Ferdinand Marcos.

On April 5, 1971, Filipino soldiers, acting on orders from Marcos, broke into Roxas' home, stole the Buddha and gold and threw Roxas in prison. He remained in custody for two years until he revealed the location of the secret tunnels.

"He was beaten, burned and had electrodes attached to sensitive parts of his body," says Cathcart. "As a result, he lost the sight in one eye, which still bulged out of his head and was one-and-a-half times the size of its mate when I met him 15 years later."

While Roxas was in confinement, Marcos forced him to swear that his story was a hoax and that the Buddha was made of bronze. Marcos then released Roxas, giving him a bronze replica and keeping the Golden Buddha for himself.

In 1973, 60 of Marcos' soldiers reopened the secret tunnels and spent nearly a year removing the 1,000 boxes of gold.

Scene Two: Hawaii

The story resumes in 1986 when Ferdinand and Imelda Marcos fled the Philippines aboard a U.S. Army plane in the midst of the "People Power" rebellion.

After they landed in Hawaii, Roxas served them with a lawsuit alleging theft of the treasure, torture and false imprisonment.

Shortly after Marcos arrived in Hawaii, Roxas formed The Golden Buddha Corporation. His goal was twofold: (1) Move the jurisdiction of his lawsuit from the Philippines to the United States, where it would be heard free from Filipino political corruption, and (2) Reduce the threat to his own life by assigning rights to the treasure to a corporation.

After seven years of pre-trial maneuvering, the trial was finally set for May 25, 1993. On May 24, Cathcart called Roxas, who was still living in the Philippines, and told him to catch a plane to Hawaii immediately.

"An hour and a half later he was dead," says Cathcart. "The coroner never conducted a toxicology test, and never opened him up. He ruled that he died of tuberculosis."

Cathcart said he had counseled his client to lay low. He even hired bodyguards for Roxas when he left the Philippines to give his deposition. However, a few weeks before the trial, Roxas met a doctor who said he didn't look good and prescribed him some medication, his widow told Cathcart.

"I told her to get the remaining pills and Fed-Ex them to me immediately," says Cathcart. "But when the package arrived, the envelope was empty.

"I guess this was all a coincidence," he says sarcastically.

"Bongbong's" Defense

The defense strategy was simple: if the fabled tunnels of gold exist, no one has ever found them. And as for the Golden Buddha, it doesn't exist and never did; Marcos never stole it, never possessed it and neither did Roxas.

Because Ferdinand Marcos had died by the time the trial took place, his son, Ferdinand "Bongbong" Marcos Jr., testified in his place. Bongbong told the jury under oath that he has never seen the Buddha nor the vast stores of gold his father was supposed to have possessed.

The defense claims the whole fantastic story was just that -- a fantasy.

"It's completely beyond reason," said Bongbong Marcos, following the verdict. "In Fort Knox there is a total of $11 billion worth of gold. Now they are saying the Marcoses have more gold than the entire United States."

Finding the Witnesses

"When I first heard the story, I didn't believe it myself," says Cathcart. "So my biggest challenge was establishing credibility in the eyes of the jury.

"The numbers were so large and the story so wild -- this was all straight out of Indiana Jones," he continues. "I was trying to prove my client was entitled to $334 billion in damages, and there was a real possibility the jury would just laugh me out of the courtroom."

The first challenge was to prove the Golden Buddha existed and that Roxas had once possessed it. This wasn't going to be easy because hardly anyone -- except the plaintiff, the defendant and Marcos' cronies -- had ever laid eyes on the statue. The few people who had seen it, including the 10 men who helped Roxas pull the 1-ton statue out of the tunnels and the man with the map, had died in the intervening 25 years.

Cathcart hired private investigator Arlene Friedman, who proved to be worth her weight in gold, tracking down key witnesses in Las Vegas, Australia and the Philippines.

"She was able to find people all over the world who didn't want to be found," says Cathcart. "You have to realize that dealing with Mr. Marcos can be very hazardous to your health."

Ken Cheatham

Roxas remembered one man, an American G.I. stationed in the Philippines, who had visited his house in 1971 and taken pictures of the statue. But Roxas couldn't remember the G.I.'s name. He thought it might be "Timothy."

Finding the American G.I. was a small miracle of investigative work.

"All we had to go on was a first name, which proved to be wrong, and military records listing all the American personnel stationed in the Philippines in March 1971," says Cathcart.

But Friedman eventually tracked down Ken Cheatham in Las Vegas where he was living on his retirement pension as a Air Force major.

Cheatham, a retired intelligence officer, told the jury a spellbinding tale of international intrigue.

Although he met Roxas just once 25 years ago, it was not the kind of encounter a person is likely to forget, he says.

Like Roxas, Cheatham was an amateur treasure hunter. On March 30, 1971, he drove 150 miles north of Manila to search for Japanese war artifacts. Soon after arriving in Baguio City, Cheatham heard rumors that someone had found the Golden Buddha.

By 7 p.m., Cheatham had located Roxas and was ushered into the back room of the Filipino's small home.

"He pulled back a pile of family linens and there it was, a three-foot-tall Buddha made of solid gold," Cheatham tells Lawyers Weekly USA.

It was a heck of a yarn. But Cheatham had something better for the jury: photos.

Roxas had asked Cheatham to photograph him with the Buddha and to send copies to the U.S. treasure hunter's club to which both men belonged.

That's when Cheatham's trouble began.

The club issued a press release about the statue, which identified Cheatham as Roxas' partner. The story was picked up by the wire services and published in Stars and Stripes, the U.S. Military newspaper.

Marcos saw the story and flipped, Cheatham says.

Who was this Cheatham character and why was he meddling in Filipino affairs? the dictator demanded.

Marcos sent three of his officers to interview Cheatham. While they were enroute, CIA officials arrived at Cheatham's office and told him to keep his nose out of it.

"They told me to say the statue wasn't made of gold and to downplay the whole thing so Marcos would lose interest in me," Cheatham says. "They said that if I got involved in this, they'd ship me immediately to Viet Nam."

Cheatham did what he was told, and that was the end of it.

Or so he thought.

Five days later, Marcos' officers stole the Buddha from Roxas, threw him in jail, and tortured him into revealing the location of the tunnels.

Cheatham knew nothing of all this until the private investigator arrived at his door in Las Vegas more than 20 years later.

At trial, his photo provided the only definitive proof that Roxas ever possessed the Buddha.

Luis Mendoza

The next challenge was to prove that the statue Roxas had once possessed was made of gold. The private investigator, Friedman, delivered once again, in the form of Luis Mendoza, a Filipino goldsmith who had tested the statue for Roxas back in 1971. He testified that it was made of 22-carat gold.

Robert Curtis

The third task was to establish that Marcos had stolen the Buddha.

The origin of gold can be traced by the impurities in the metal. A Las Vegas mining engineer, Robert Curtis, had developed a method to remove these impurities by melting down the gold and removing the trace metals. It would then be solidified into generic gold ingots that bore no trace of its original "fingerprints."

In 1975, Curtis received a call from Marcos.

"Marcos wanted him to bring his smelter to the Philippines, set it up beside the royal palace and melt down the gold," says Cathcart. "He wanted to launder it."

When Curtis arrived in Manila, Marcos showed him a roomful of gold bars with oriental letters on them. He also showed him the Golden Buddha at Miravelles, the Marcos summer home.

After Curtis delivered the gold smelter, Marcos ordered his men to take him to the site of an open grave, Curtis said in his deposition.

"They put a .45 to the back of his head and showed him a headstone with his name carved in it," says Cathcart. "They planned to kill him, but Curtis had been working with Marcos to find other treasures, and he still had the maps. So they had to let him go."

A Filipino and three Australians

The final task was to find witnesses who could confirm that Marcos had taken the gold that Roxas claimed after discovering the secret tunnels.

First was Juan Quijon, a Filipino army cook assigned to Marcos' soldiers in 1974. Quijon testified that his unit spent nearly a year excavating tunnels behind the hospital in Baguio City. He testified that he watched soldiers carrying out heavy wooden boxes, and that at one point he saw the bottom break on a rotted box and several gold bars fall to the ground.

Next came three Australians who had negotiated nine contracts with Marcos to sell a total of $1.63 trillion in gold.

Their reluctant testimony proved key to establishing that Marcos possessed enormous wealth that he had no legitimate means of accounting for.

"There was no other place for Marcos to get that much gold," says Cathcart. "Imelda testified that his top salary as president was $5,000. How does a man with no income become a trillionaire?"

Others who saw the gold

Cathcart bolstered this assertion with witnesses who testified that Marcos showed them enormous amounts of gold stored in five different locations in the Philippines.

To do this, the private investigator found witnesses from opposite sides of the world.

"Curtis testified he saw gold bullion in a room 15 feet by 15 feet by 30 feet, stacked floor to ceiling, front to back," says Cathcart. "That's a lot of gold."

The Australians testified that while visiting Marcos in Manila, they were blindfolded and taken to a warehouse filled with a similar amount of gold.

Norman Dacus, a Las Vegas investor, flew with Bongbong Marcos to a shrine that Ferdinand Sr. was building for himself in the northern part of the island. While there, he saw boxes of gold waiting to be flown out of the country by the U.S. military, Cathcart says. Dacus also saw a bank vault in Manila piled with gold.

Finally, Norwegian psychic Olaf Johnson was shown a room in the Marcos summer palace that was filled with gold. Johnson had been hired by Marcos to locate a Japanese shipwreck in Manila Harbor that was said to be loaded with platinum.

Trial Setbacks

In addition to having the plaintiff die on the eve of the 1993 trial, Cathcart lost several evidentiary rulings that could have proved lethal to his case.

"Unfortunately, some of my best evidence never got out of my briefcase," says Cathcart.

For example, Judge Milks wouldn't allow into evidence copies of the $1.63 trillion in gold contracts Marcos had signed with the Australians. Nor did Cathcart get to call the handwriting expert who would have confirmed that it was Marcos who signed those documents.

The contracts were important to establishing the staggering wealth of the Marcos family.

Nor did the jury get to hear audiotapes of conversations with Marcos that were made on separate occasions by two people: mining engineer Curtis and an American lawyer.

"Curtis tape-recorded everything," says Cathcart. "He had tapes of Marcos asking questions about ways to remove the fingerprints from gold."

Cathcart also had transcripts of tapes made in 1987 by Richard Hirschfeld, an American lawyer whose clients had numerous dealings with Marcos.

"I had Marcos talking about how he had $40 billion in gold hidden back in the Philippines, and that he wanted to go back and get it," says Cathcart. "I also have him talking about his plans to re-enter the Philippines and topple Corrie Aquino."

A Video Trial

In spite of its inherent drama, the Roxas trial had an oddly detached air about it, Cathcart says.

First, Judge Milks heard all of the evidentiary arguments and objections in pre-trial hearings before the jury convened. And because of the potential danger for witnesses, almost the entire trial took place on videotape.

"Many of my witnesses were afraid to appear in court," says Cathcart. "I didn't want to risk the possibility that they would be intimidated or killed before trial. So I flew them to Hong Kong and videotaped their depositions. There were so few live witnesses at the trial."

In fact, retired Air Force Major Ken Cheatham was one of the few witnesses who testified live for either side.

The final twist came during Cathcart's closing arguments. Realizing that he was asking for an unprecedented amount of money, Cathcart made a strategic concession.

"I told the jury that if I were the defense attorney in this case, I would argue that the witnesses had seen the 'same' gold in five different places," says Cathcart. "I conceded that the amount of the gold in each sighting was remarkably similar. I also conceded that I had no proof of the quantity or quality of the diamonds stored inside the Buddha so I wouldn't ask them to award my client anything for those. I think that made my damages request more palatable to the jury.

"But who knows," he adds. "If I had asked for it, they might have given me the entire $334 billion.

The Verdict

As a specialist in airplane crash litigation, Cathcart had never handled a case like this one. And there was no one more surprised than Cathcart himself when he agreed to accept the decade-long project on a pure contingency basis.

So the drama was high when the jury returned July 19 and were polled individually on each of the 12 questions posed to them.

"It was agony," recalls Cathcart. "We got unanimous votes on the first 11 questions, but the twelfth one -- which concerned the statute of limitations -- could have taken it all away."

Cathcart won number twelve, thus securing the historic verdict.

However, when asked about the staggering judgment, Cathcart responded without hesitation.

"It should have been larger," he says.

He gives two reasons for his claim.

(1)The judge calculated pretrial interest from the time the case was filed rather than from the time the theft took place. A proper ruling would have increased the verdict to $67 billion, Cathcart says.

(2) The quantity of gold was fixed but the value of that gold swings wildly over time. The judge calculated the value of the gold at the time of the theft, while Cathcart contends the U.S. Supreme Court has ruled in other cases that gold be assigned the highest value it achieved during the period in question. A proper ruling would have increased the verdict to nearly half a trillion dollars, Cathcart says.

Imelda Marcos has appealed, calling the verdict against her husband "nothing but hubristic desecration of the dead" and vowing to fry her enemies "in their own fat" for slandering the Marcos name.

Cathcart plans to use the appeal to increase the verdict based on the trial judge's rulings on pre-trial interest and gold valuation.

Collecting $22 Billion

Lawyers for Imelda Marcos say the Roxas verdict is uncollectible because, while the jury found Ferdinand liable for theft, torture and imprisonment, it cleared Imelda of all charges.

"All they've got is a judgment against a dead man," says defense attorney James Linn. "It's non-collectible. It's monopoly money."

Cathcart counters that in a $1.9 billion verdict against Marcos for civil rights violations, the defendants tried to argue that Marcos had no estate from which to collect and that any alleged estate had no assets. The 9th Circuit Court of Appeals held against the defendants.

With that appeals decision in his favor, the Marcos estate is liable for this award, Cathcart says.

And he has already made a significant first step in getting at the Marcos fortune.

"I have a $450 million attachment on their Swiss bank account," Cathcart says, referring to a February ruling by a Swiss court. "That money will be released as soon as this verdict survives appeal."

Cathcart says he has spent eight years tracing the Marcos fortune to small communities scattered around the world and says he plans to collect the verdict little by little.

"This is not play money," says Cathcart. "They're trillionaires. They have assets all over the world and I know where a lot of them are."

Issue Date: JANUARY 13, 1997

Cite this article: 97 LWUSA 27
$450 Million in Swiss Bank Account Is Already Attached
$22 BILLION Roxas v. Marcos
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