When there wasn't enough money in his business account to pay the bills, Tom Noe would take money from the state's rare-coin funds under his control, his former bookkeeper testified yesterday.
Jeannie Beck, who handled the accounts of Noe's Vintage Coins and Collectibles as well as the two coin funds, said Noe covered Vintage deficits with transfers of coin-fund money - and then marked them as "purchases."
Prosecutors have charged Noe with embezzling more than $2.2 million from the coin funds he managed for the Ohio Bureau of Workers' Compensation. They say he took money from the coin funds to support his lifestyle, which included purchasing waterfront homes on Catawba Island along Lake Erie and in the Florida Keys.
Records obtained last year by The Blade show that Noe wrote checks totaling nearly $3.2 million to Vintage from the two Capital Coin funds he managed for the bureau in the 18 months preceding June, 2005, when the state seized the funds.
Dozens of checks, ranging from a few thousand dollars to $600,000, were written from the coin funds to Vintage, records show.
Prosecutors yesterday started building the foundation to argue that the transfers were not loans, as Noe's defense attorneys have suggested - or if they were - they weren't recorded.
Keith Elliott, the manager of internal audit for the Bureau of Workers' Compensation, said any loan would have been doc-umented in the financial reports of the Capital Coin funds.
Mr. Elliott, who first raised serious questions about the coin funds in 1999 and 2000, said he had reviewed coin fund records in which loans, joint venture agreements, and other financial arrangements were documented.
When asked by assistant prosecutor David Buchman if there was "any legitimate business reason" not to document such loans, Mr. Elliott said there wasn't.
"It should have been recorded in the financial statements," he said.
Ms. Beck said earlier in the day that Noe told her on some occasions that the coin-fund-to-Vintage transfers were "loans." But she also said she didn't recall ever seeing loan documents related to the transfers.
Sue Bahn, another former Vintage employee, testified Tuesday that Noe told her he considered the $50 million in state coin funds "an ATM" he could tap whenever he wanted. She said his spending increased markedly in late 2004, including installation of a $50,000 pool at their Florida home.
Priscilla Livingstone, a former Vintage office manager, said she got a $10,000 bonus at Christmas, 2004. Her previous bonuses never exceeded $1,500, she said.
"We had a good year," she said Noe told her.
Throughout the first week of the trial, defense attorneys have routinely elicited testimony showing two things: The state's contract with Noe granted him wide latitude with its money, and Tim LaPointe, a vice president at Vintage, was a key person at the company.
Time and again, Ms. Beck, Ms. Bahn, and Ms. Livingstone said Mr. LaPointe was the day-to-day boss at Vintage who had direct control of computer records such as coin invoices.
All three women have also pointed out that Noe was Mr. LaPointe's boss and was in overall charge of the operation.
"He was everybody's boss," Ms. Beck said.
Mr. LaPointe has been charged with seven felonies and is considered a co-conspirator with Noe. He is expected to testify later this week for prosecutors, with whom he has a cooperation agreement.
Noe's attorneys have warned jurors that Mr. LaPointe's testimony may be "unreliable" because of his deal with prosecutors.
Prosecutors have agreed to consider recommending leniency at Mr. LaPointe's sentencing depending on his cooperation in the Noe case.
Jurors also heard yesterday that investigators executing a search warrant at Vintage in May, 2005, found Noe's financial records missing.
Howard Hudson III, a former lieutenant with the Ohio Highway Patrol, said he discovered that several file cabinets marked as coin files were empty.
Ms. Beck later testified that those records had been removed more than a week earlier. She said Noe told her they were sent to the Detroit area for copying.
Investigators later secured those records from Noe's defense attorneys at the firm of Thompson Hine LLP in Columbus.
Noe has pleaded not guilty to 44 felony counts against him. He is free pending $500,000 bond.
All three former Vintage employees have testified that they knew little about the sudden demise of the company last year as the criminal investigation of Noe took full flight. The office was "edgy," but Noe and Mr. LaPointe said little.
"I knew something was going on, I just didn't know what," Ms. Livingstone said.
All of the women are currently unemployed.
Another former employee, Rick DeFrances, is expected to testify today, sometime after the cross examination of Mr. Elliott.
Mr. DeFrances handled much of the accounting work for Noe from another site in Ohio. Ms. Beck said she faxed him most of the coin-fund records on a regular basis.
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