Blackwolfe may be thinking of "Wake of the Red Witch" he was the hero but the Witch originally sank because he intentionally ran it onto a reef.
Even in the era when the film was made it was a fairly common insurance scam to take worn out ship, claim it had a fairly valuable cargo, insure it to the max then either scuttle it in deep water, or run it up on some rocks then collect the insurance money.