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The FBI searched cave for Civil War gold, fearing Pa. officials would seize it, new court documents show

Dennis Parada, right, and his son Kem Parada stand at the site of the FBI's dig for Civil War-era gold in Dents Run, Pa., in 2020. (Michael Rubinkam/AP)

This article has been updated to add new information from an interview with Warren Getler.

It was the summer of 1863, and Union Lieutenant Castleton and his men were lost. They were transporting a large quantity of gold bars, hidden in false-bottomed wagons, from Wheeling, W.Va., to the U.S. Mint in Philadelphia and had paid a local to guide them through the hills. Now they were going around in circles, the guide had taken off with two horses, and Castleton was ill. They decided to separate; a small party would go find help while Castleton and Sergeant Mike O’Rourke stayed behind with the gold.

Neither the gold nor the men were ever seen again.

That’s the story two treasure hunters told FBI special agent Jacob B. Archer, according to recently released court records. Archer had gathered evidence both of the gold’s location in a cave on state-owned land in Elk County, and that state officials might be trying to seize the gold for themselves, prompting his application for a federal warrant to seize the alleged gold without the state’s permission.

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The warrant application, recently released after a petition by the Associated Press and the Philadelphia Inquirer, is just the latest twist in a bizarre 158-year-old story that the two treasure hunters, father-and-son duo Dennis and Kem Parada, say is far from over.

For years, the FBI declined to say what it was looking for in the cave; it now says that when it searched the cave, it came up empty and considers the case closed, according to the AP. The Paradas and a former Wall Street Journal investigative reporter say the FBI is lying.

“We can live with it if [the FBI] say[s] it’s national security, and they can’t talk about it,” said journalist Warren Getler in a phone interview with The Washington Post. Getler is the co-author of the book “Rebel Gold: One Man’s Quest to Crack the Code Behind the Secret Treasure of the Confederacy. “But to say nothing was found, it just doesn’t add up.”

In 2018, the Paradas told the FBI they’d heard rumors about hidden gold in the area for decades, according to the FBI’s warrant request. The story of “Lieutenant Castleton” and how the alleged gold got to be there came from a story titled “The Lost Gold Ingot Treasure,” which they found in the Army Heritage and Education Center at the Military History Institute in Carlisle, Pa. The story was written down for first time on “the centennial anniversary of the Civil War,” it says, according to the FBI request.

The Paradas used clues from this somewhat meandering text to center on a cave near the Dents Run area of Elk County. Dennis Parada first discovered the cave in 1974, Getler said. After getting permission from the Pennsylvania Department of Conservation and Natural Resources to search it, they found a “turtle-shaped cave,” which initial tests indicated had man-made walls and a large quantity of metal on the other side. A colleague, who was allowed to do a small amount of drilling, said he briefly saw a flash of gold and what appeared to be gold dust on the drill bit.

On Jan. 31, 2018, the Paradas — referred to as “Person 1” and “Person 2” in the new documents — led the FBI to the cave, where agents performed tests that confirmed the Paradas’ finding: There was something large and metal a few feet underneath them in the cave. The next month, the FBI used highly sensitive equipment called a gravimeter to determine that whatever was behind the wall weighed up to nine tons and had the density of gold.

Gold of that quantity would be worth hundreds of millions, perhaps even a billion dollars, Getler said, and according to federal regulations, the Paradas may have been entitled to a finder’s fee of up to 40 percent.

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Then Archer met Getler — “Person 3” in the new documents — who had a bold claim: The entire story about Castleton and O’Rourke probably was made up. But it wasn’t worthless.

Getler told him about the Knights of the Golden Circle, a secret society formed in 1854 that sought to create a new proslavery nation comprising the South, Mexico, the Caribbean and part of South America, he told Archer. During the Civil War, the group had Confederate sympathizers in northern states who performed clandestine operations to secure cash, gold and silver for future Confederate use.

They also used “waybills” — coded directions — to communicate secret locations, and Getler thought “The Lost Gold Ingot Treasure” was one of those, that had been passed down for generations before being written down in 1961. “Castleton” and “O’Rourke” were probably fake names, code for “castle” and “rook,” which would have identified the chapter of the group. And when Archer checked, he could find no military records matching those of the supposed lieutenant and sergeant. Other references to a turtle and “heading east into the rising sun,” are symbols used by the group, Getler said.

Archer applied for a federal warrant to seize the alleged gold, fearing that if he asked for the state government’s permission, they would claim the gold was abandoned property and thus belonged to Pennsylvania. In addition, the Paradas told Archer that a staff member for the Pennsylvania legislature had offered to keep state authorities away from the site while the Paradas excavated in exchange for “three bars of gold or 10 percent” of what they found. Surveillance cameras the Paradas had placed at the site showed state authorities had brought in equipment to try to dig the gold up themselves, though they were unsuccessful.

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The FBI got the warrant, and the Paradas and Getler made an oral agreement with the bureau to observe the dig on March 13, 2018. Instead, they were confined to their cars far away from the dig site, Getler said, and then told that workers were stopping hours earlier than expected.

That night, neighbors said they saw bright lights and heard backhoe and jackhammer noises, though the judge’s warrant had specified the FBI had to stop digging at 10 p.m. Witnesses also say they saw armored vehicles and a convoy of black SUVs. The next day, unaware of the neighbor’s reports, the Paradas and Getler were again confined to their cars. Then, FBI agents marched them to the excavation site and showed them an empty pit.

“We were embarrassed,” Dennis Parada told the AP in 2018. “They walk us in, and they make us look like dummies. Like we messed up.”

But the more they thought about it, the less they doubted they had made a mistake. It wasn’t just the mysterious hints in an old tale, multiple crews using specialized machines had detected gold. Now he says it’s “insulting” to imply all of these people were wrong. And tellingly, the FBI has never approached the scientists and crews who had performed all those tests to ask them what could have gone wrong with their measurements, something you would expect if a mistake this big, Getler said.

The way in which the gravimeter was used in this case — more than 50 measurements on a flat surface — “is like a fingerprint,” Getler said. “There’s a very, very infinitesimally small chance it’s going to get it wrong.”

Getler believes the FBI found the gold and decided to keep it secret, as a matter of national security. The FBI maintains nothing was found at the site.

The Paradas have now retained an attorney, who is fighting for the release of thousands of pages of FBI documents and video footage of the dig.

“There was definitely some kind of precious metal based on the readings of the instruments at the site,” attorney Bill Cluck said. “The fact they wouldn’t let them be there for the dig, it’s suspicious as hell and it doesn’t have to be.”

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