Civil case against Noe is delayed

11/10/2005

COLUMBUS - A Franklin County judge yesterday brought Attorney General Jim Petro's civil case against Tom Noe to a temporary halt until criminal investigators complete their cases against the former Toledo-area coin dealer.

The ruling by Judge David Cain of Franklin County Common Pleas Court means it will be several months - if not more than a year - before Mr. Petro can seek to recoup millions of dollars he's alleged that Mr. Noe stole from the $50 million rare-coin funds he managed for the Ohio Bureau of Workers' Compensation.

Despite the objections of Mr. Petro, Mr. Cain said there was no compelling justification for moving forward with the case immediately, but there were several valid reasons to put the proceedings on hold.

The judge said much of the process of gathering information has already been completed and that Mr. Noe's assets "weren't going anywhere" because of earlier rulings limiting how the coin dealer could spend money and sell property.

Less than two hours before attorneys for Mr. Noe and Mr. Petro faced off in Franklin County court yesterday, the Ohio Supreme Court heard oral arguments in a separate public records case stemming from the same investment scandal.

In that case, State Sen. Marc Dann, a Democrat from suburban Youngstown, is suing Gov. Bob Taft for the release of memos written by high-ranking aides, which the governor has refused to release under an "executive privilege." During yesterday's Supreme Court hearing, justices compared the lawsuit to public records cases involving former President Richard Nixon.

The Supreme Court arguments are being made as investigators are examining the bureau's investments, which include Mr. Noe's failed rare-coin venture and a loss of $215 million in an offshore hedge-fund.

During yesterday's hearing before Judge Cain, Mr. Noe's attorney, Judson Scheaf, argued successfully that the state's civil case should be put on hold so it will not interfere with ongoing criminal investigations or taint a potential jury pool.

After the hearing, Mr. Scheaf said, "The judge has aptly frozen the status quo so the parties can go about their business in an orderly fashion, and conduct an investigation into what did or did not happen with the coin funds."

He added that the ruling effectively "freezes" the case for the time being.

Criminal investigators have set a timetable of next spring for concluding their coin-fund probe, and Mr. Scheaf estimated yesterday that prosecution on felony charges that Mr. Noe laundered money into President Bush's re-election campaign was about a year away. Mr. Noe was indicted two weeks ago by a federal grand jury in Toledo on the campaign finance violations.

William Becker, an attorney for Mr. Petro, argued in court that it was necessary for the state to act quickly to secure Mr. Noe's assets in advance of any judgment against him.

"This ruling does not let the Noes off the hook with the state in this case," said Mark Anthony, a spokesman for Mr. Petro. "We will still litigate our case against the Noes; it will just take a little longer."

Yesterday's ruling will also bring a halt to the information-gathering side of the case, as Mr. Petro will be barred from subpoenaing records or deposing witnesses.

Judge Cain expects a joint proposal next week from the attorneys for Mr. Petro and Mr. Noe suggesting a plan for handling Mr. Noe's assets while the case is pending.

The judge has already ordered Mr. Noe get court approval before selling any of his assets above $5,000 and must submit his legal expenses for review.

Contact Steve Eder at:

seder@theblade.com

or 614-221-0496.