COLUMBUS Tom Noe often transferred tens of thousands of dollars from the Ohio rare-coin funds he managed to his personal business before bankrolling Republican candidates and causes with contributions and loans.
A Blade examination of the accounting records from Mr. Noe s $50 million rare-coin venture shows a pattern of large sums of money moving from the coin funds to his personal business, Vintage Coins and Collectibles, in the days and weeks before the coin dealer and his wife, Bernadette, made contributions to Republican candidates ranging from President Bush to U.S. Sen. George Voinovich and Gov. Bob Taft down to Lucas County Auditor Larry Kaczala.
Mr. Noe typically listed the payments from the coin funds to Vintage Coins as "profit distributions" or "coin purchases."
But both of those explanations have been assailed as fraudulent by Ohio Attorney General Jim Petro, who has branded Mr.
Noe a thief and accused the former Toledo-area coin dealer of running a Ponzi scheme and making questionable coin trades with the state fund.
Last month, Mr. Petro accused Mr. Noe of diverting coin-fund money to his personal business and then to his personal checking account to pay for his former Catawba Island home, landscape his home in the Florida Keys, and pay off a business loan. Mr. Petro said the accusations largely came from "tracking the flow of dollars" out of the coin funds to Mr. Noe s personal accounts and measuring the "proximity of the transfers" before large purchases or payments.
According to the computerized accounting records of Capital Coin I, II, and their subsidiaries, Mr. Noe since 1998 transferred more than $19 million from the state coin venture into his business accounts at Vintage Coins, including more than $13 million for "coin purchases" and more than $1.7 million in "profit distributions." In that same time period, Vintage Coins transferred about $5 million back to the coin funds, the records show.
As Mr. Petro lodged accusations about how Mr. Noe bought houses and paid-off loans with state coin fund money, he stopped short of making claims about how the coin dealer paid for political contributions and loans he and his wife doled out, totaling more than $300,000 since 1998 the year he received his first installment of $25 million from the Ohio Bureau of Workers Compensation to invest in rare coins.
Mr. Petro, who has returned $6,100 in campaign contributions from the Noes because of concerns that the money could have come from state funds, said during a news conference that coin-fund money could have been used for political purposes, but his office is focusing on "personal resources" in building its civil case against the coin dealer.
William Wilkinson, a Columbus attorney representing Mr. Noe, said no state coin funds were used to make campaign contributions.
"Look at the coin-fund check register. You don t see any checks written to any campaign committees," he said.
Mr. Wilkinson said Mr. Petro never would be able to prove that Mr. Noe used coin funds to make political contributions or for any other personal use because those dollars "lost their identity" when they joined dollars from other sources in the Noes bank account.
Mr. Petro, in announcing his new allegations last month, said that on at least five occasions without coin-fund money being diverted to his personal accounts, Mr. Noe would have had insufficient funds to cover checks he had written.
Additionally, in March, 1998, several days before the bureau invested the first of two $25 million payments with Mr. Noe, his Vintage Coins account at National City Bank in Toledo was running a negative balance and had bounced 40 checks, a forensic accountant for the attorney general s office wrote in a sworn affidavit.
Mr. Petro has said that on the day Mr. Noe received his first $25 million from the workers compensation bureau, he wire transferred $1.4 million from the coin fund to his own accounts to pay off previous obligations.
Mr. Noe s political contributions to Republicans increased substantially in 1998 after he received the first payment from the state, and his contributions more than doubled again in 2002, the year after the bureau gave him his second installment of $25 million.
Since The Blade first reported on the rare-coin venture on April 3, a long line of politicians including President Bush, Governor Taft, and even California Gov. Arnold Schwarzenegger have returned their contributions from the Noes after Democrats charged that the money came from Ohio s injured-workers fund.
The contributions and fund-raising are central issues in the scandal that has engulfed the Ohio Republican Party over the past six months. The controversy has led to the criminal conviction of Mr. Taft on ethics violations and high-level firings and resignations at the Bureau of Workers Compensation and has spawned more than a dozen criminal and civil investigations.
Investigators are examining the Noes contributions, and a federal grand jury has been convened in Toledo to look into charges that Mr. Noe illegally laundered money into President Bush s re-election campaign. Mr. Noe, who was chairman of the President Bush s re-election efforts in northwest Ohio, was labeled a Bush "Pioneer" for raising at least $100,000 for the campaign.
The money-laundering investigation centers on an Oct. 30, 2003, Bush campaign fund-raiser in Columbus that was attended by the President and raised $1.4 million for his re-election effort. Mr. Noe sponsored a table at the luncheon and invited a number of people to attend.
Less than four weeks before the fund-raiser, coin fund records show that Mr. Noe transferred $800,000 from Capital Coin I to Mr. Noe s personal business Vintage Coins. No reason was specified in the electronic records for the transfer.
A few months earlier, on July 15, 2003, Mr. Noe moved $200,000 from Capital Coin II to his Vintage Coins accounts for "coin purchases." Within one month, the Noes made contributions of $4,000 to President Bush s re-election campaign.
There were many other large coin-fund payments to Vintage Coins before the Noes made high-dollar loans to political causes and friends.
On Aug. 29, 2002, Mr. Noe wrote a check for $100,000 from Capital Coin II to his Vintage Coins accounts for "coin purchases." In the following month, he loaned $39,000 to H. Douglas Talbott, a former aide to Mr. Taft.
Later that fall, on Oct. 22, 2002, in the stretch run of the political season in Toledo, Mr. Noe loaned the Lucas County Republican Party s candidates fund $40,000 the day before the fund bought a series of television ads for Maggie Thurber s successful county commissioner campaign.
Last week, Ben Konop, a lawyer who ran for Congress last year as a Democrat, wrote a letter to Mr. Petro asking him to compel the county party to return $63,000 in loans it received from Mr. Noe.
In October, 2004, before last year s election, Mr. Noe loaned the county party $25,000. Earlier that month, Mr. Noe sent $60,000 from Capital Coin I to his Vintage Coins account.
The party, which has paid back $2,000 of the loans, has reclassified the money it borrowed as contributions and said the funds have been dispersed. Mrs. Noe was chairman of the county party when Mr. Noe made both loans.
Last week, Lucas County Prosecutor Julia Bates confirmed that investigators are trying to determine if any of the state s coin funds ended up in GOP campaign coffers.
"We have to be very careful," she said. "We re tracking it thoroughly, because we don t want to make a mistake. We re looking through a lot of records and we don t have all the records."
Asked to elaborate, Ms. Bates said she could not because of a state grand jury empaneled in early August in Toledo that is focusing on possible criminal activities in Mr. Noe s rare-coin funds.
"We re trying to be meticulous and see what happened to the dollars. Was it bad investments, bad accounting, or stolen money?" she said.
Mr. Noe s attorney, Mr. Wilkinson, said a "natural flow of funds" was taking place between the state s coin funds and Vintage Coins.
"It was natural because Vintage was Tom Noe s company," he said. "Once Tom Noe had money in his bank account, it was natural for it to flow from Tom Noe to his creditors."
He added, "The attorney general puts that sequence of events together and concludes there was a crime. I put that sequence of events together and conclude that is what everyone expected business transacted," Mr. Wilkinson said.
Mark Anthony, a spokesman for Mr. Petro, said last week that the attorney general s office is in the process of building its case against Mr. Noe and is sharing information with criminal investigators. He would not speak specifically about what role campaign contributions will play in Mr. Petro s civil suit against Mr. Noe.
During his Sept. 29 news conference, Mr. Petro said his office is looking at "any instance where money is diverted" from the state "for uses other than investment," but he said his office had not considered whether Mr. Noe improperly used state funds for political contributions.
State Sen. Marc Dann, a Youngstown-area Democrat who has emerged as a vocal critic of the state s investment in rare coins, said any link between state funds and campaign contributions should have been the first issue that Mr. Petro examined.
"Sometimes if you are doing your job as a lawyer, you have to go after things even though it might be personally embarrassing," Mr. Dann said. "Jim Petro has a duty to look at it as a civil recovery for the state. If someone used our money to make campaign contributions, we should have our money back."
Contact Steve Eder at: firstname.lastname@example.org or 614-221-0496.