RedactedNarrative: V1 cruising in northbound in Gulf of Mexico.  Alarms sound at the helm and smoke appears from the engine compartment.  V1 shuts down.  Dead in the water.  Taking water.  Sea Tow was called and arrived at approximately 1230 hours.  They were able to begin pumping the vessel just as it was about to sink and managed to keep it afloat.  They then towed it back into Marine Max Marina in Venice, arriving at approximately 1500 hours.  Both subjects were unharmed and the vessel was secured on a lift.  
  I spoke with the two subjects.  Passenger 1 told me that at approximately 1100 hours, several alarms sounded at the helm reporting problems with the starboard engine.  At the same time, Passenger 2 noticed smoke or steam coming from the engine compartment.  She opened the hatch and smoke began to billow out.  Passenger 1 immediately brought the throttle to neutral and then shut off the engines.  Both subjects were unable to determine where the smoke was coming from but quickly realized that they seemed to be taking on water.  Passenger 1 then called into Coast Guard on VHF channel 16, requesting help.  
  Both Passengers wrote and signed a sworn written statement which reflected their accounts.  I took pictures of the vessel including where the fire appeared to have started.  I was unable to determine if the fire was extinguished by the internal extinguish system or simply by the water that had been coming in.  Both twin Cummins diesel 425 HP engines had been almost completely submerged as well as the generator. The estimate of damage I was told was approximately $550,000.  There were no injuries to the subjects on board.  End of report.