List of lost state coins jumps to 121

5/1/2005

An accounting firm hired to check the inventory of rare coins purchased by Mr. Noe or his associates for the state found last year that not only were the coins missing, but 119 coins were possibly stolen by a Colorado coin dealer, according to a 2004 audit report released last week.

Mr. Noe hired the dealer to run a coin subsidiary funded with money from the Ohio Bureau of Workers' Compensation, the agency charged with paying the medical bills and providing income to workers injured on the job.

The 119 missing coins are in addition to two coins worth $300,000 owned by the state that were lost in the mail in 2003, confirmed Jeremy Jackson, press secretary for the Ohio Bureau of Workers' Compensation.

The state doesn't know what happened to any of the coins, Mr. Jackson said.

The Blade first reported April 3 that since 1998 the bureau has invested $50 million in rare coin funds controlled by Mr. Noe, a local coin dealer and frequent contributor to local, state, and national Republican campaign committees.

He was President Bush's northwest Ohio campaign chairman in last year's presidential race and because of the contributions he raised for the President, he earned the coveted status of a Bush "pioneer."

But his work raising cash for the President's re-election campaign has also made him the subject of a U.S. Justice Department and FBI investigation.

U.S. Attorney Gregory White, in Cleveland, disclosed last week that Mr. Noe is the subject of the federal probe into possible

federal campaign contribution violations.

The Ohio Inspector General has also launched a separate investigation into Mr. Noe, his coin ventures, and into "alleged wrongful acts associated with the investment practices" of the bureau.

After a bureau auditor raised strong concerns in 1999 about whether the state's millions were adequately protected in the rare coin funds, the state and Mr. Noe agreed that an accounting firm would review coin inventories and report its findings to the state. The state's coins are stored across the country, Mr. Noe has said.

In a report covering July 1, 2003, to June 30, 2004, the accounting firm Plante & Moran found a problem with one of Mr. Noe's Capital Coin Fund subsidiaries - Numismatic Professionals, LLC., based in Evergreen, Colo.

"There were 119 coins for which the physical location of the coin could not be determined with a total cost of approximately $93,000," the auditor's report stated.

"Management believes this could relate to a misappropriation of assets by a former employee during fiscal year 2004."

The coins were purchased by Numismatic Professionals with state money the bureau gave to Mr. Noe, which he then transferred to the subsidiary.

The estimated market value of the coins, and details about them, were not included in the report.

The coin dealer who managed Numismatic Professionals at that time was Mike Storeim, of Evergreen, Colo.

He's the same coin dealer who told authorities in 2003 that two state coins worth roughly $300,000 were lost in the mail.

Last year, Mr. Storeim was suspended by the Professional Numismatists Guild for breaching the organization's code of ethics.

The organization, based in California, represents leading rare coin experts and is designed to make the hobby safe for collectors and investors.

"We don't discuss ongoing cases, but I can confirm that Michael Storeim, of Evergreen, Colo., was suspended as a member of the Professional Numismatists Guild on Aug. 16, 2004, for violations of the Professional Numismatists Guild's code of ethics," said Donn Pearlman, a guild spokesman.

Mr. Pearlman said the guild, which has about 250 members, rarely issues suspensions.

"When there's a reported breach of the code of ethics, that is taken very seriously. In the last 15 years, there have only been a few suspensions or expulsions," he said.

A spokesman for Gov. Bob Taft said yesterday the governor's office was unaware that a total of 121 coins are now missing. He referred questions to the bureau. "This is their management. This is news we'll have to talk to the bureau about," Mark Rickel, the spokesman, said.

State Sen. Marc Dann, a Democrat from suburban Youngstown who has been critical of the state's rare coin investment since it was uncovered, said yesterday the revelation that an additional 119 coins are missing is more evidence that the state needs to get out of the investment and get its money back.

"From the start, I had hoped for the best and prepared for the worst. I couldn't have imagined how bad this could be," he said. "What's horrible is the Republicans are so addicted to the campaign contributions, they could not get out of this thing.

"We need to work with the attorney general's office and the bureau's oversight commission to salvage what we can," he said.

Democrats in the legislature have claimed that the bureau gave Mr. Noe $50 million to invest because of his generous contributions to state GOP campaign committees and Republican candidates.

Records show that Mr. Noe has over the last decade contributed more than $11,000 to both Governor Taft and former Gov. George Voinovich, now a U.S. senator for Ohio.

He has contributed more than $70,000 to other Republican candidates over the last 11 years.

Last year, Mr. Noe informed the state that an employee of Numismatic Professionals was misappropriating assets.

Mr. Noe told The Blade in a March interview that Capital Coin was studying the business deals of Numismatic Professionals, managed by Mr. Storeim.

Mr. Noe would not provide details at the time, but he said the review was unrelated to the two coins that Mr. Storeim reported were lost in the mail in October, 2003.

Mr. Noe's Capital Coin uses wholly owned subsidiaries to buy and sell coins for the state.

Capital Coin, which was set up by Mr. Noe to take receipt of the state's $50 million and is managed by him, provides the money for the subsidiaries to buy rare coins.

Mr. Noe then hires coin dealers he knows to run the subsidiaries.

Mr. Storeim used state money Mr. Noe gave him to buy for $185,000 the two coins he claimed were lost in the mail.

The market value of the coins was about $300,000 when they went missing.

One was an 1855 $3 gold coin, the other an 1845 $10 gold coin.

They were being sent to Mr. Storeim by Express Mail from a professional coin grading company in California, which certified their quality.

He said when he got the package it appeared that it had been tampered with.

Mr. Storeim said after opening the package, he found the two coins missing. He contacted Mr. Noe within minutes and later filed a report with the Jefferson County, Colorado, Sheriff's Department.

The sheriff's department ruled that it couldn't determine how the coins were lost and closed the case, a department spokesman said.

Mr. Noe told The Blade that he accepted the explanation for the two lost state coins. However, both he and Mr. Storeim agreed they have a broader disagreement. Neither Mr. Noe nor Mr. Storeim disclosed to The Blade that any additional state-owned coins were missing.

A sheriff's department spokesman said Friday no theft report was filed for the 119 missing coins.

Mr. Storeim Friday referred questions to his attorney, who declined comment.

Mr. Storeim also sent an e-mail to The Blade stating that he would not comment.

Mr. Noe has not returned calls to The Blade. His Toledo attorney, James Tuschman, also didn't return messages seeking comment.

He and Mr. Noe are members of the Ohio Board of Regents, which oversees the state-supported higher education system. Mr. Noe is also chairman of the Ohio Turnpike Commission.

In an April 12 letter, Mr. Tuschman updated the bureau on the "investigation being conducted regarding probable embezzlement" by a former employee of Numismatic Professionals.

He identified that former employee as Mr. Storeim.

Mr. Tuschman wrote that the investigation started in March, 2004, based on "internal auditing controls," and involved detailed accounting and investigation of all transactions" by Numismatic Professionals.

"Additionally, representatives from Toledo went to Evergreen, Colo., and took possession of inventory, collectibles, paperwork, and computers from the Evergreen office," Mr. Tuschman wrote.

Mr. Tuschman wrote that Mr. Storeim's resignation was "immediately accepted."

Mr. Noe's coin fund hired Plante & Moran, which has an office in Toledo, to quantify the amount of the "suspect transactions" and the potential loss, Mr. Tuschman wrote.

"It was also understood that the investigators may have to present expert testimony in a lawsuit or criminal proceeding related to the subject matter of the consultation," Mr. Tuschman wrote.

In a March interview with The Blade, Mr. Storeim said he was in Mexico when Mr. Noe's business partner, Tim LaPointe, came to Evergreen and "removed a great deal of personal property from my office."

"It was all very planned,'' Mr. Storeim said.

Mr. Noe previously confirmed that Capital Coin "confiscated some other coins that we felt were part of the fraud."

After all of the charges and countercharges of fraud and theft of state-owned rare coins, a spokeman for the Bureau of Workers' Compensation said on Friday that the bureau has "zero liability."

Mr. Jackson, the bureau spokesman, said because Mr. Noe withheld $900,000 in bonuses that Mr. Storeim would have received and confiscated $400,000 worth of coins from the Colorado dealer, the bureau's investments are safe.

Mr. Storeim, however, has said he will sue Mr. Noe for illegally stealing his coins. Mr. Noe, in turn, asserts he may pursue state or federal criminal charges against Mr. Storeim.

A letter and an e-mail Mr. Noe says Mr. Storeim sent to him last year provide some additional information about the state's missing rare coins.

Mr. Noe released the March 15, 2004, letter and a March 30, 2004, e-mail to reporters last month.

The letter, signed "Mike," states that monthly sales figures and a computer spreadsheet for coins purchased over three months didn't match.

"I have engaged in the most self destructive, irrational behavior possible ... left everybody a paper trail five miles wide to make sure that I couldn't continue, and been in denial I did anything wrong," the letter stated.

The March 30, 2004, e-mail from Mr. Storeim's e-mail address to e-mail addresses for Mr. Noe and Mr. LaPointe states: "It is very important to me that any person that I wronged ... be made whole during this process, and I don't think you can do it without my help.

"As I have stated before, I accept responsiblity for my actions and am not trying to hide anything. You cannot imagine the remorse and guilt that I feel and the only way for me to lessen those feelings is to make sure that everyone is treated fairly, as quickly as possible."

The e-mail stated it was also from "Mike."

Mr. Storeim isn't the only manager of a subsidiary buying and selling rare coins for the state who has caused problems for Mr. Noe and financial losses for the bureau's investment fund.

Mark Chrans, of Malibu, Calif., who was hired in 1998 by Mr. Noe to manage Visionary Rare Coins, a wholly owned subsidiary of Capital Coin, caused Mr. Noe's state-funded coin ventures to write off $850,000 over the last three years because of bad coin deals, an unpaid loan, and salary advances.

The Blade reported April 22 that Chrans was convicted in 1986 in a federal court in Springfield, Ill., of faking a coin transaction to cover up drug money.

He spent less than a year in prison after being found guilty of fraud and perjury.

Mr. Noe admitted after the conviction was reported in the newspaper that he had not done a background check on Chrans before handing over to him hundreds of thousands of dollars in state investments.

Blade Staff Writer Steve Eder contributed to this report.

Contact James Drew at:

drew@theblade.com

or 614-221-0496.