THE sunken wreck is real: the century-old Imperial Russian Navy cruiser Dmitri Donskoi is sitting on the bottom off the coast of South Korea. But its gold-bullion cargo is not.

Now, the South Korean company behind the breathless announcement that it had found a $190 billion treasure-trove is under investigation for fraud.

The Shinil Group produced photographic evidence it had found the wreck of the cruiser, which was scuttled by its crew after the battle of Tsushima a clash with saw the Russian navy soundly defeated by the Japanese.

Where things get murky is the legend it went down with some 200 tons of gold, in the form of coins and 5000 boxes of gold bars. Shinil claimed a treasure box was seen inside the wreck by its remote-piloted vehicle. No gold, however, was recovered.

That presents the first problem: Shinil claimed this would be worth $190 billion. But the stated amount of gold is worth about $10 billion.

Nevertheless, the company issued a salvage claim on the wreck. While Russia is automatically entitled to half, Shinil benevolently said it would give 10 per cent of its cut to Korean infrastructure projects.

But investigators believe the devil is in the detail.

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Shinil also stated it would invest another 10 per cent in a new cryptocurrency system that it would be establishing. Meanwhile, a Singapore-based affiliate was trying to sell cryptocurrency based on the potential value of the shipwreck.

The company said it would produce evidence of the gold cargo within a week of its announcement. That was a month ago.

It has also walked back its estimated value of the haul several times. It now says the treasure is likely worth just over one million dollars.

The video posted to YouTube of the wreck has been removed. Shinil has shut down its own website.

The Shinil Gold Coin cryptocurrency project has also vanished. Its website is gone and no new mention of its impending launch has been made.

Seoul Metropolitan Police have told the Yonhap News Agency that it has raided Shinil offices and is now investigating the case as a potential fraud, perpetrated by a family with a history of similar scams.

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Choi Yong-seek, former chief of Shinil Group, and his predecessor Rhu Sang-mi are both being interviewed by police.

Police believe Choi played a key role in the company business as a partner of the Rhu siblings Rhu Sang-mi and Rhu Seung-jin who headed the firms Singapore unit.

Choi resigned as CEO as the Dmitri Donskoi story exploded around him.

Rhu Seung-jin, who fled to Vietnam after he was implicated in another fraud case in 2014, has been added to an Interpol wanted list in relation to the Dmitri Donskoi case.

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Russian treasure ship cryptocurrency fraud: Dmitri Donskoi