Satellite observation recently discovered Cactus Man several nautical miles north of Talos Island among a chain of small, rocky islands. Unfortunately, Crey apprehension teams were unable to secure the target due to the mysterious presence of what appears to be a huge, spectral ocean tanker skimming at a brisk pace several feet above the surface of the water.
Crey apprehension teams were dispatched but the capture attempt failed. Regretably, several good Crey operatives were lost during the mission, killed under unusual circumstances. Surviving witnesses report seeing humanoid-shaped beings depart from the otherworldly vessel and descend upon our men, seemingly to "drain the very life right out of them." Autopsies are underway to determine the actual causes of death. A few survivors also report a sudden change of their hair color to stark white, supposedly from the horrific shock of witnessing inhabitants of the afterlife.
It is unknown at this time what happened to Subject 3133. Probability suggests that, due to the fiasco, he became aware of Crey presense on the islands, and has either fled to the mainland or succumbed himself to the alleged ghosts. Operating procedure demands that we do not assume the latter has occured unless we acquire physical evidence of death. Thus, we shall assume Cactus Man is still alive until proven otherwise.
Addenum: Shortly after this report was filed, our department was alerted by R&D with additional information that may be relevant to this occurance. One of their mid-level research scientists who studies supernatural activity in New England as a hobby recognized the phantasmal boat as the Moraine, a tanker that was lost in a fierce hurricane somewhere near Striga Isle in 1932. An article about the Moraine that appeared in the Paragon Times last year has also been brought to our attention, and has been referenced here: http://www.cityofheroes.com/paper/newspaper12.html