Ohio News Today

By STEVE EDER and CHRISTOPHER D. KIRKPATRICK
BLADE STAFF WRITERS


COLUMBUS: Millions of dollars in coins and cash exchanged hands among managers of Tom Noe's $50 million rare-coin venture in the days leading up to his admission that up to $13 million was missing from the state-funded operation, documents released yesterday show.

Nearly 15,000 pages of coin-fund transaction records provide evidence that there were hundreds of trades among the people charged with managing the states rare-coin investment throughout its seven-year existence.

The documents also show Mr. Noe authorized millions of dollars in loans from the states Capital Coin funds including $285,000 to himself while using state money to foot the bill for legal work to fight public records requests to release coin-fund documents.

Last week, the Ohio Supreme Court ordered the Ohio Bureau of Workers Compensation to release the transaction records, siding with The Blade in a lawsuit filed against the agency after its refusal to comply with a request under Ohio’s public records laws.

The documents made public yesterday, which were distributed through Ohio Attorney General Jim Petro's office, were the first batch of records detailing the inner workings of Mr. Noe's coin operation.

Investigators have been scouring the transaction records from Mr. Noe’s coin venture for weeks after attorneys for the Toledo-area coin dealer on May 26 acknowledged that millions of the funds assets could not be accounted for. Mr. Noe, a Republican fund-raiser, is facing multiple state and federal investigations, including a probe into whether he laundered money to President Bush's re-election campaign.

Kim Norris, a spokesman for Mr. Petro, said her office was investigating the rare-coin funds ¡ª including the millions of dollars in transactions that occurred in the days leading up to the states seizing control of the coin operation. Ms. Norris said she could not comment on the details of the investigation.

The information in the documents we are very aware of, she said.
On May 24 more than seven weeks after The Blade first reported on Mr. Noe’s rare-coin investment on April 3 Mr. Petro sued Mr. Noe to freeze the assets of the venture and forbid the coin dealer from selling or transferring any of the assets of the investment. On May 9, the state announced plans to divest in the coin fund, citing ¡°concerns about the ability of managers to commit the necessary time to the operation.

As Capital Coin inched closer to liquidation and as the pressure mounted for a thorough review of its books, the pace of trading increased between managers of the coin fund. The records paint a picture of an operation desperate to move cash and coins in the days before the assets were frozen.

This is one of the most brazen schemes I've ever seen said state Sen. Marc Dann, a Democrat from suburban Youngstown and one of the leading critics of the problems at the bureau. It's more obvious than a murder on Desperate Housewives.

Review of records:

A Blade review of the transaction records shows trading activity from the coin funds and its various subsidiaries reaching a fever pitch in the days leading up to the freezing of the funds.

Noe attorney Bill Wilkinson said the millions in transactions in the days leading up to the freezing of the states assets would not be unusual because no one could have known if or when the assets would be frozen. He said it would be like reading the future or knowing the Lotto numbers before they were announced.

How could anyone know? I think the questions insane Mr. Wilkinson said.

But a number of state officials and agencies including the governor, the inspector general, state auditor, secretary of state, and Ohio Ethics Commission all had called for investigations or audits of the coin funds, Mr. Noe, and people associated with the states investment. At the same time, state House Democrats were calling for the coin assets to be Accounted for:

The transaction records also highlight other trading activity in the final days and weeks before the coin fund was closed down:

On May 24th the day the state seized control of Capital Coin from Mr. Noe his firm, Vintage Coins & Collectibles, purchased an 1882 $5 coin from the fund for $17,500.

On May 23, state fraud investigators attempted to take an inventory of the coins held at Mr. Noe’s Monclova Township headquarters. But they were turned away. That same day, a Capital Coin subsidiary bought 312 coins for $865,840 from Mr. Noe’s founding partner in Capital Coin, Frank Greenberg of Delaware Valley Rare Coins. Included in the sale was a 1919-dime for $20,000.

On May 20, Kevin Savage, an employee of Mr. Noe’s Mid-American Sports, wrote a check for $160,672 to a Capital Coin subsidiary.

On May 17, Numismatic Professionals, a subsidiary of Capital Coin, wrote a check for $200,000 to Vintage Coins & Collectibles, a business owned by Mr. Noe, with no reason stated for the payment.

Even before questions arose about the coin funds, there were a number of trades between managers within the fund some of which included their personal businesses. For example, a Capital Coin subsidiary paid $75,000 to Vintage Coins on April 1. Three days later, on April 4, Vintage paid $75,000 back to the subsidiary.

Millions lent out:

The records also show millions of dollars were lent to coin fund subsidiaries, coin dealers, and businesses across the country, since the inception in 1998 of the state rare-coin fund.

The loans often were short-term high-dollar payments made to subsidiaries and other coin dealers nationwide. The loans were sometimes as short as a month and paid with interest.

It is unclear why Mr. Noe authorized loans and if debtors repaid the loans in a satisfactory manner.

Scott Travers, a coin-collectors advocate and author of several consumer protection books on coin collecting, said the unique nature of the industry also allows for nontraditional, short-term loans sometimes for hundreds of thousands of dollars between dealers and buyers and sellers.

That's not a big amount he said of some of the Capital Coin loans in the transaction records. Its just dealers. That’s usual. That’s OK.
In at least one case, Mr. Noe not only authorized a loan but also acted as the receiver of a loan.

In April, a Capital Coin subsidiary lent Mr. Noe $285,000 at 6 percent interest. On May 7, Mr. Noe wrote a $1,405 check to the subsidiary for one months interest on the loan from the Thomas W. Noe and Bernadette Restivo Noe checking account at National City Bank in Toledo. Bernadette Restivo Noe is Mr. Noe’s wife and a former chairman of the Lucas County Republican Party, as Mr. Noe is as well.

Money to lawyers:

Additionally, records show that Capital Coin paid to retain a number of lawyers as more attention became focused on the operation.
To fight public records lawsuits brought by The Blade and other organizations, Mr. Noe paid thousands of dollars to Isaac, Brant, Ledman & Teetor LLP, a Columbus law firm. A statement on May 1 showed a balance due of $25,660.

He also retained the services of Ganz & Hollinger, a New York law firm, to prepare trade secret commentary. On April 28 and April 29, Capital Coin Fund wrote checks to Ganz & Hollinger totaling $5,951.
On April 14, Capital Coin Fund Limited II issued checks for $10,000 to Schottenstein, Zox & Dunn, a Columbus law firm, to represent the fund in the matter currently being investigated by the Ohio Inspector Generals Office relating to the Ohio Bureau of Workers Compensation.

Senator Dann said he was not surprised that Mr. Noe paid attorneys with state money to defend against lawsuits at the height of the investment scandal.

Nothing surprises me anymore about this whole situation, he said. This is what you get when you set up a system that is designed to win elections rather than protect taxpayer money and injured workers money.

Coin-fund purchases:

The thousands of pages of documents also shed more light on the purchases of the coin fund.

In January, Mr. Noe used $26,500 of the states money to purchase 13 1783 George Washington Textiles, the only known Cox for governor button, and other political memorabilia.

In September 2004, Mr. Noe purchased $9,000 in Christmas cards from Presidential Coin and Antique Co. in Alexandria, VA. The purchase was made with Capital Coin fund money.

Mr. Noe also purchased two letters written by Theodore Roosevelt on White House letterhead in 1908 to the president of University of California-Berkley. The letters, priced at $5,000, were purchased with coin-fund money and now owned by the state along with thousands of other collectibles.

Blade Columbus Bureau Chief James Drew contributed to this report.