Calling it a "pure misappropriation of public funds," Mr. Petro charged that Mr. Noe engaged in check forgery, presented false profits, and stole millions from the $50 million Capital Coin I and II funds he managed for the Ohio Bureau of Workers Compensation.
Mr. Petro has filed a lawsuit on behalf of the state against Mr. Noe, claiming the former Toledo-area coin dealer and Republican fund-raiser defrauded the bureau of millions of dollars.
Yesterday, the attorney general asked Judge David Cain of Franklin County Common Pleas Court to lock down the proceeds of all asset sales by Mr. Noe and his wife, Bernadette, until the case is decided.
"Right now we are convinced that, at some point in time, we are going to win a judgment against Noe," Mr. Petro said. "We just want to make sure the money is there to pay the judgment."
Mr. Petro wrote in a motion filed yesterday that evidence shows the Noes committed fraud and are selling their assets with the intent to avoid satisfaction of a judgment in this case.
William Wilkinson, an attorney for Mr. Noe, responded to the new allegations yesterday in a statement. He said his client is "anxious" for the judge to decide Mr. Petro's motions so the public can see his charges are "hollow."
"For several reasons, Mr. Noe is delighted with the filing, which makes three specific allegations of fraud and theft," Mr. Wilkinson wrote. "It is a great advantage to know the details of the charges against you. It allows the defense time to marshal a defense to defeat the charges."
Mr. Noe's attorneys have told authorities that there would be a "valuation shortfall" of up to $13 million in the coin funds but have denied any accusations of wrongdoing by the former coin dealer.
His attorneys yesterday asked Judge Cain to freeze the state's civil lawsuit against Mr. Noe until the criminal investigations are complete. There are at least 13 government agencies investigating Mr. Noe and the coin funds, Mr. Wilkinson said.
In July, Mr. Petro presented evidence to the court that Mr. Noe had converted at least $4 million in state money for personal use. The court has frozen the Noes assets and is requiring the couple to gain the judge's approval before selling any property above $5,000.
With the judge's blessing, Mr. Noe is in the process of selling about $665,000 in business interests, and the couple already has liquidated more than $2 million in personal assets, Mr. Petro said yesterday. To keep the $665,000 from being placed in a legal defense fund, the attorney general must provide evidence that state money was used to purchase the assets.
On April 3, The Blade first reported on the state's rare-coin investment with Mr. Noe. During the last six months, the investment scandal that ensued has led to three grand jury investigations in Ohio and one in Colorado, high-level government resignations and firing, as well as the criminal conviction of Gov. Bob Taft and two top aides on ethics violations for failing to report gifts from Mr. Noe.
3 examples given
In a filing yesterday that included canceled checks and sworn affidavits, Mr. Petro laid out three examples of instances he believes show Mr. Noe stole state money and put it to personal use.
The attorney general said some of the allegations were based on "the proximity of the transfers" of money in and out of the coin funds to his personal accounts and purchases. He said investigators in his office came to their findings by tracking the flow of the dollars.
In at least one case, Mr. Petro alleges Mr. Noe converted state money through check forgery.
According to the court filing, Mr. Noe on April 30, 2002, transferred $150,000 from the coin funds into his personal business, Vintage Coins and Collectibles, and that same day, he wrote a check from his business account to Gerry Gordon for $110,000. The check, endorsed with a signature, was deposited into the personal bank account of the Noes at National City Bank.
Four days earlier, Mr. Noe wrote a check from his personal accounts for $43,773 for landscaping work on the family's home in the Florida Keys. Before transfer of the $110,000 check, the bank had insufficient funds from the Noes to cover the landscaping charge.
But Mr. Gordon, a former member of the Ohio Board of Regents, signed an affidavit swearing that he never received the check from Mr. Noe and that the signature endorsing the payment was forged.
"Noe was, through forgery and manipulation, able to take money from Coin Fund II through Vintage, get it into his personal bank accounts, and use the proceeds to pay a landscaping charge," Mr. Petro said.
Mr. Gordon said yesterday he had no idea why his name was on the check.
Referring to Mr. Noe, Mr. Gordon said: "He's the forger. He ll have to work it out He knew I was on the Board of Regents. He knew I had sold my company." Mr. Gordon referred to SunMedia Corp., which he said he co-founded in 1986.
But Mr. Gordon, who is retired and lives in the Cleveland suburb of Richfield, said he's not angry at Mr. Noe.
"My name is good, and it will be until I leave this good Earth," he said.
When asked if he had ever had any financial dealings with Mr. Noe, Mr. Gordon's wife, Betty, said the couple would not comment. Mr. Gordon also declined to comment on the allegations facing Mr. Noe.
Mrs. Gordon said she handles the couple's finances and determined that Mr. Gordon never received the check and that the endorsing signature on the back of the check is not his signature.
Mr. Noe's attorney, Mr. Wilkinson, wrote yesterday that Mr. Gordon traded in coins and engaged in joint ventures with Vintage Coins for years.
"He invested considerable sums of money. At the conclusion of those investments he received his entire original investment plus a profit," Mr. Wilkinson wrote.
The $43,773 in landscaping paid for rocks, gravel, palm trees, and other plants at the Noes former home in Islamorada, southwest of their current home in the Florida Keys.
Rick Johnson, owner of Island Landscaping, remembers working on the home for about a month. "We did a lot of work out there," he said.
He was not aware of any problems with Mr. Noe's finances. "From what I heard, he made a lot of money off Beanie Babies," Mr. Johnson said.
The Noes sold that home in 2003 and then bought their current Florida home for $1.85 million in June, 2003. They have added a pool, waterfall, and an addition to that home since then.
Fifteen days after Mr. Noe allegedly deposited the $110,000 check into his accounts, the Noes made separate $2,500 contributions to Governor Taft's re-election campaign fund.
In July, 2002, Mrs. Noe's parents retired Lucas County Judge Francis "Buddy" Restivo and Jane Restivo sold their property and home on Catawba Island to their daughter and her husband. The Noes agreed through a promissory note to pay for the home in two installments of $120,000, due Dec. 31, 2002, and Jan. 31, 2003.
According to Mr. Petro, on Dec. 19, 2002, Mr. Noe transferred $120,000 from coin fund accounts into his Vintage Coins accounts, and on the same date, moved that amount into the couple's personal checking account.
The Noes then paid the first installment of $120,000 to Mrs. Noe's parents. Before the transfer, Mr. Petro said there was not enough money in the Noes account to cover the check.
Again, on Jan. 31, 2003, Mr. Noe transferred $100,000 from the coin funds through his business accounts to the Noes accounts, before writing a personal check to Mrs. Noe's parents for the remaining $120,000. Mr. Petro said there would not have been enough money in the personal account to support the check without the funds from Vintage Coins.
Mr. Petro said the manner in which Mr. Noe settled his debt with the Restivos is evidence that the coin dealer converted state money for personal use.
'Pretty good tracing'
"If Tom Noe has no money in his personal account and suddenly he has $120,000 and it comes within close proximity in time, within 48 hours, from Coin Fund II to Vintage Coins to Tom Noe the same exact amount is being used to pay off an obligation that acquires that property in Catawba,' he said. "To me, that's a darn pretty good tracing."
In response to the alleged purchase of the Catawba Island home with coin-fund money and the alleged check forgery using Mr. Gordon's name, Mr. Wilkinson wrote: "If Vintage sold coins to the Coin Fund, and received $120,000 for them, it's no one's business what Vintage or Noe did with the sale proceeds."
Mr. Petro said, "Somebody may say at some point that was for the purchase of coins. But there are no records of anything changing hands as a result of this payment to Vintage. There is nothing that would indicate that $120,000 was the proceeds of a coin purchase.
"It's just a misappropriation."
The attorney general also said he had no reason to believe that Mrs. Noe's parents engaged in any wrongdoing.
"All they know is they sold the property and they expected to get two payments," Mr. Petro said.
Mr. Restivo said yesterday he does not believe Mr. Petro's allegation regarding the sale of the Catawba property.
"I don t understand it at all. I don t think it happened," Mr. Restivo said.
The property has been in the Restivo family for years. After the older home was demolished and the new one constructed, Mr. Restivo visited often, he said.
"The only reason I sold it was my age," he said.
When asked if investigators have met with him regarding his son-in-law, Mr. Restivo said: "I haven t talked to anyone about anything."
Mr. Petro yesterday also unleashed allegations that Mr. Noe manipulated payments from the state to support the coin funds to show false profit and to pay off a commercial loan.
On July 31, 2001, within a day of Mr. Noe receiving his second $25 million installment from the bureau, the coin dealer moved $2 million from Coin Fund II and into Vintage Coins business accounts.
A day later, Mr. Petro alleges that Mr. Noe used the money to pay off a $393,000 commercial loan which he would not have been able to cover without the state's money because the balance in his own account was too low.
In the filing, the attorney general said, Mr. Noe "fraudulently" documented the $2 million payment as a coin purchase by the coin funds.
Then, three weeks later on Aug. 22, 2001, Mr. Noe transferred $786,000 to Coin Fund I from the $2 million of Coin Fund II money he had deposited into his Vintage account. Mr. Petro said Mr. Noe on the same day made a profit distribution from Coin Fund I to the bureau for $776,839.
"Coin Fund I, prior to the deposit of $786,000, had insufficient funds to make a profit distribution without the infusion of cash from Coin Fund II," Mr. Petro wrote in the filing.
In light of the new allegations of theft and forgery, why hasn't Mr. Noe, who is living in his Florida Keys home, been arrested?
In July, Mr. Petro said the former coin dealer was not being arrested because he was not a flight risk.
Yesterday, Mark Anthony, a spokesman for Mr. Petro's office, said authorities have not arrested Mr. Noe because the new accusations are being lodged in a civil lawsuit, not a criminal case.
"We are bringing evidence to support our allegations that this money belongs to the state and was wrongly taken," Mr. Anthony said. "In terms of laws being broken, that's in the province of the criminal investigation team."
Blade staff writers Mike Wilkinson and Joshua Boak contributed to this report. Contact James Drew at:email@example.com or 614-221-0496.