toledoblade.com --

With the sell-off of its infamous rare-coin fund nearing its conclusion, the Ohio Bureau of Workers' Compensation is estimating that the divestment will net as much as $54.9 million.

After more than three years of liquidation, the agency is set to recoup more than the $50 million the state agency fronted former Toledo-area rare-coin dealer Tom Noe to manage the venture beginning in 1998. But the surplus deviates vastly from the $14 million or more in profit the bureau could have earned if it invested the money conservatively in money markets, government bills, or index funds, according to projections by the BWC's investment department.

Noe, the onetime GOP insider and fund-raiser for President Bush who was at the center of the "Coingate" scandal, was sentenced to 18 years in state prison after a Lucas County jury convicted him in 2006 on charges that he stole millions of dollars from the coin fund.

Bill Brandt, who was hired by the state to spearhead the state's liquidation efforts, said the fact that the coin fund will return its principal doesn't let Noe off the hook.

"I've heard people say, 'Well, you've returned all the principal, so maybe Noe wasn't guilty,'•" said Mr. Brandt, the CEO of Chicago-based Development Specialists Inc, a restructuring firm. "Well, there's $13 million to $18 million worth of interest missing here.

"This was used as a personal piggy bank. People have blinders on."

He added, "Getting the principal back is a watershed event because it normally does not happen. We've got to consider ourselves measurably lucky that we did that."

Noe is appealing his conviction and sentence, contending he did not receive a fair trial because of the media attention surrounding his case.

Noe's attorney, John Mitchell, did not return a message yesterday seeking comment.

After Blade reports in April, 2005, raised questions about Noe's handling of the rare-coin fund and missing state-owned valuables, a state and federal task began investigating BWC's investment department.

During the course of the investigation, the bureau was overhauled, the state's political leadership changed from Republican to Democrat, and 19 money managers and government officials were convicted of crimes, including former Ohio Gov. Bob Taft on ethics charges.

Bureau administrator Marsha Ryan is expected to update the BWC's board of directors on the efforts to sell off the assets of the coin fund at a meeting today.

"The efforts to recover these assets on behalf of Ohio's employers and injured workers should be recognized as an important accomplishment on the road to recovery for the BWC," Ms. Ryan said in a statement. "The work of the investigators, lawyers, and liquidators who made this happen deserve recognition for their diligence and hard work over the last three years.

"Today, the BWC has built upon these recovery efforts and has begun a comprehensive, customer-focused reform to fundamentally improve Ohio's workers' compensation system."

The bureau is projecting net proceeds of $53.5 million to $54.9 million from the coin funds after deducting at least $6.2 million in expenses. The expenses so far consist of $1.2 millions in settlements and $4.6 million in professional services, including $2.4 million for Development Specialists Inc.

To recoup the money, liquidators in June, 2005, began selling off collections of coins and other rare collectibles, and negotiating settlements to lawsuits.

The bureau recently sold stock in Numismatic Guaranty Corporation, a Florida-based coin grading company, for $7.6 million.

About $50,000 worth of coins remain to be auctioned.

Noe, who owned Vintage Coins & Collectibles in Maumee, is serving a 27-month sentence in a central Florida federal prison for laundering contributions to President Bush's re-election campaign.

His state prison sentence stemming from the rare-coin scandal is slated to begin next year.

Contact Steve Eder at:
seder@theblade.com or
419-304-1680

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