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Case File: Skeleton Canyon Treasure AKA Peloncillo Treasure
Location: Arizona
Date: 1881
Description: Skeleton Canyon is in the Peloncillo Mountains, a jagged ravine in Cochise County on Arizona's southeastern border. Buried somewhere in it is supposed to be a Mexican treasure worth today around eight million dollars.

Case[]

History: Stretching twenty miles across Arizona's eastern border is a jagged mountain ravine whose very name reflects its dark and treacherous past: Skeleton Canyon. A century ago, thieves and robbers from Mexico frequented this rugged landscape, smuggling stolen riches into the United States. Legend holds that somewhere near this mysterious canyon lays a buried cache of gold and jewels. According to some, it is the wild west's largest unclaimed treasure.
Hunter Pritchard, director of A National Treasure Hunting Museum, spent a night in the canyon and is convinced that the treasure is real. Treasure hunter Fern Hamill is certain that it is real as well. Some, like historian Robert Palmquist, do not believe that the treasure exists.
The legend of Skeleton Canyon begins in a small Mexican village. In 1881, a con artist named Jim Hughes learned that the "Estrada Gang", a gang of Mexican bandidos, had looted the town of Monterrey. They were planning to smuggle their booty into the United States. Hughes himself was a member of the infamous Curly Bill Brocius gang, which operated out of Arizona. He was able to infiltrate the Estrada Gang because he spoke fluent Spanish. He found out that the gang was coming back to Skeleton Canyon.
Hughes rode back to Arizona and told his cronies of the treasure. They made plans to ambush the smugglers. When the Estrada Gang later came out of Mexico, they went through Sonora and then Skeleton Canyon. When they were about a mile into Arizona, they passed an area called Devil's Kitchen. Hughes' gang then ambushed them, shooting them off of their mounts. The coins and contraband were scattered all over the canyon. In order to stop the mules from scattering and taking the loot with them, they shot the mules as well.
The Curly Bill Brocius gang had their treasure, but without mules, they had no way of moving it out of the canyon. Part of it was divided up on the spot, while the rest was buried to be retrieved later. However, two members of the gang, Zwing Hunt and Billy Grounds, had different ideas. The two were good friends. They decided that while the rest of the gang was out spending their fortune in the local bars, they would double cross them and come back into they canyon. According to legend, they found a Mexican teamster and talked him into bringing his team and his horses into Skeleton Canyon to help remove the treasure. He was later killed in order to keep their new hiding place a secret.
Fearing retribution from their ex-partners, Hunt and Grounds went into hiding. They found a desert cave where they remained for nearly four months. During this period, Grounds penned a number of letters to his sister Maggie in San Antonio. He wanted her to know where the treasure was hidden, should anything happen to him. He was said to have ventured out once a week to give the letters to a passing stagecoach. Hamill claims to have seen and copied portions of nine of the letters. He refused to show Unsolved Mysteries his copies, but agreed to divulge their contents.
The letters told about the cave they were in and how long they were on the road. They moved all night with the treasure from dark until sun up, when they stopped to bury it. They then went to the cave. According to the letters, the cave is at the mouth of the canyon. Hamill claims to have found the cave, which goes back eighty feet. Inside, he found old ropes that were buried in there. In one of the letters it said that from their lookout, they could see the turf growing back over where they had buried the treasure, down in the mouth of the canyon.
Hamill found all of the clues in the letters. He then located the place in the canyon where all the clues told him to go. He believes that he is close to finding the treasure. Palmquist, however, is skeptical about the letters and their contents. He noted that Grounds was a nineteen-year-old Texas cowboy rustler-type who had migrated from Texas to Arizona. He feels that it is unlikely that Grounds would have written home detailed letters about robbing Mexicans and burying treasure. According to Hamill, Maggie and a man went to the cave and lived there for two years while they looked for the treasure. In the cave, Hamill found a vase that said "Maggie - 1885 World's Fair" on it. He believes that this is proof that she was there.
On March 19, 1882, a sheriff's posse cornered Grounds and Hunt in a remote desert outpost. In the ensuing shootout, Grounds was killed and Hunt was seriously injured. In Tombstone, Hunt revealed the secret location of the treasure to his uncle, who drew up a detailed map. Hunt later managed to escape, only to be killed in an Indian attack. Palmquist is skeptical that the map actually exists. Hamill, however, claims to have seen the map. According to him, it shows the canyon and it shows where the cave is. However, as a result of an earthquake that took place in 1886, he believes that the treasure is now twenty feet deep under rocks.
Although there are many skeptics, the legend of the Skeleton Canyon treasure continues to attract fortune hunters from around the world. Pritchard believes that the treasure is still buried within the vicinity of Skeleton Canyon, probably less than thirty miles away. He believes that evidence such as skulls, coins, and mule bones, continue to show up in it. Palmquist believes that it is possible that there is a treasure. However, according to initial reports from the Mexican government, only a small amount of money was actually taken by the Estrada Gang. That money may have been spent very quickly. Hamill continues to insist that it is real and that he is going to find it.
Background: According to legend, the treasure was originally stolen in 1881 by Mexican Bandits from citizens of Monterey, Mexico. Con-artist Jim Hughes learned of the treasure and became friendly with the bandits. He contacted his fellow members of the Curly Bill Brocious Gang, which operated out of Arizona. The gang ambushed the Mexican bandits, but the treasure was too large to carry out of the canyon so they buried it, planning to come back later. Two gang members, Zwing Hunt and Billy Grounds, double-crossed the gang and came back to relocate the treasure. They stayed in hiding for several months. Billy sent several letters to his sister, Maggie, telling her where to find the treasure in case anything happened to him. In March 1882, Zwing and Billy were ambushed by a Sheriff's posse and Billy was killed. Zwing reportedly detailed a map to the treasure before he died in another shootout. However, an earthquake in 1886 destroyed all the telltale clues that might have helped locate it.
Investigations: Several treasure hunters have tried to locate the Skeleton Canyon Treasure but have so far been unsuccessful. They have, however, found evidence that the legend surrounding the treasure was true. Palmquist has investigated the story surrounding the treasure. He believes that the story is just a legend as there seems to be little first-hand evidence that has been found to corroborate the story.
Extra Notes: This case originally ran on the December 5, 1990 episode.
The book, "The Weirdest People in the World" by C.B. Colby locates the treasure under a square rock marked with two crosses on the bank of a creek.
Results: Unsolved. Fern Hamill passed away in 2011 at the age of ninety-four.
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