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Published: Monday, 2/13/2006

GRAND JURY CHARGES NOE WITH 53 FELONY COUNTS

BY MIKE WILKINSON AND JAMES DREW
BLADE STAFF WRITERS

Mr. Noe was taken to the Lucas County jail for processing as he attempted to post the $500,000 bond set by Judge Thomas Osowik.

A grand jury indicted Mr. Noe on 22 counts of forgery, 11 counts of money laundering, eight counts of tampering with records, six counts of aggravated theft, five counts of grand theft, and one count of engaging in a pattern of corrupt activity under the Racketeer Influenced and Corrupt Organizations (RICO) Act.

If convicted of all charges and he received the maximum penalty, he could face 172.5 years in prison. But Lucas County Prosecutor Julia Bates said only two of the felony counts have a presumption of incarceration and one, the RICO count, would require a mandatory 10 year prison term.

We start a whole new chapter now, Ms. Bates said. We start the litigation process.

Also indicted was Timothy LaPointe, Mr. Noe s partner in Vintage Coins and Collectibles in Monclova Township, which has since been shuttered. He faces one count of engaging in a pattern of corrupt activity under the RICO law and six counts of tampering with records. Mr. LaPointe will receive a summons to appear in court for arraignment.

Noe booking photo. Noe booking photo.
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Mr. Noe, 51, was taken into custody this morning after his attorney, Jon Richardson, entered a plea of not guilty on all charges.

The former GOP fund-raiser was accompanied by his sister and brother-in-law and said nothing during the six-minute hearing.

The charges mark the first state felony charges since mulitple law enforcement agencies began investigating Mr. Noe following The Blade s revelations in April that he was investing state money in rare coins.

The indictment calls for the forfeit of Mr. Noe s business Vintage Coins and Collectables and the sale of his shares in Numismatic Guaranty Corp. if convicted.

Mr. Noe was indicted in October in U.S. District Court in Toledo on three felony counts for allegedly laundering more than $40,000 to President Bush s re-election campaign.

The state invested a total of $50 million with Mr. Noe s Capital Coin funds, beginning with $25 million in 1998.

According to the indictment, the theft charges allege he stole more than $800,000 and laundered another $2 million.

Prosecutors declined to release details on where they think the money went or on what it was spent. Ms. Bates said she found the evidence in the case very troubling, I ve got to be very honest with you.

Although Mr. Noe traveled from Florida for the hearing, it is unclear if he is cooperating with authorities. Ms. Bates declined comment on whether Mr.

Noe had attempted to negotiate a plea agreement.

She did say, however, that today s indictment would escalate the activities of the task force looking into Mr. Noe and other aspects of state investments. I think there are other things the task force will be turning to, she said.

The indictment against Mr. LaPointe alleged that he assisted Mr. Noe in 2002, 2003, and 2004 in getting coins that did not belong to the state s coin funds or their subsidiaries yet listing them as inventory of the coin funds.

The intent was to mislead the auditors about $1 million stolen from the coin funds.

The U.S. attorney in Cleveland is looking at problems involving other Workers Compensation fund managers, one of which lost $215 million in a Bermuda hedge fund. That loss was not revealed until Noe task force investigators began asking questions following revelations in The Blade.

The Bureau of Workers Compensation bureau is the state agency charged with paying medical bills and providing monthly checks to Ohio workers injured on the job.

Before the coin scandal unfolded, Mr. Noe was an extraordinary Republican fund-raiser who received high-level appointments from Governors George Voinovich and Bob Taft.

Today s indictments came 10 months after The Blade first reported on the state s $50 million rare-coin investment with Mr. Noe, documenting how the Bureau of Workers Compensation continued to invest millions of dollars in Mr. Noe s Capital Coin Fund despite strong concerns raised by an internal auditor about whether the state s millions were adequately protected.

Since that April 3 story, the state halted its investment in rare-coin funds controlled by Mr. Noe, and the scandal that ensued has led to four grand jury investigations, high-level resignations and firing in state government, the criminal conviction of Governor Taft and two top aides on ethics violations for failing to report gifts from Mr. Noe, and charges filed last week against two former aides to Mr. Taft for failing to disclose loans that they received from Mr. Noe.

Mr. Taft, who in an interview with The Blade on April 7 defended Mr. Noe and the state s rare-coin investment with him, by saying The bottom line is: Is it making money for the state; what s the problem? could not be reached for immediate comment.

On the day Mr. Noe received his first $25 million from the workers

compensation bureau, he approved a wire transfer of $1.4 million from the coin fund to his own accounts to pay off previous obligations, officials have alleged.

Several of the counts of theft and money laundering focus on the early days of the coin funds. Within the first week, the indictment alleges that Mr.

Noe either stole or laundered $912,000.

With the first $25 million, Mr. Noe quickly invested money into real estate and his associates coin businesses. He brokered multimillion dollar coin deals that made the state little money, but allowed him to unload his own coins for hundreds of thousands to the state, according to rare-coin records released last year by the state after The Blade won a lawsuit filed with the Ohio Supreme Court.

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Jeremy Jackson, press secretary for the Bureau of Workers Compensation, reacted to the indictment of Mr. Noe by saying the agency is pleased [investigators] are making progress on the criminal front.

It will provide greater clarity to what occurred with the coin fund, and we hope it is another step in the right direction to get to the bottom of this information, he said.

Mr. Jackson said the indictment of Mr. Noe is expected to give us direction in what went wrong on the investment from the perspective of the general partner. Obviously, we have learned a lesson that this investment was not a prudent one.

The bureau on May 9, 2005 halted the rare-coin investment, saying it had concerns about the ability of the managers to commit the necessary time and resources to make it profitable.

The agency made its decision two days after The Blade reported that two rare gold coins purchased for the state probably had been stolen. Mr. Noe had said the coins were lost in the mail.

Mr. Jackson said the bureau has taken several steps to prevent what happened with the rare-coin investment that Mr. Noe managed.

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Since the scandal erupted in April, 2005, Mr. Noe has sold his Maumee condominium and his million-dollar home on Lake Erie as well as boats and cars.

Last July, Attorney General Jim Petro, a Republican, accused Mr. Noe in a civil lawsuit of stealing at least $4 million of the state s money from the coin funds. Mr. Petro said some of the money helped Mr. Noe build a home on Catawba Island, improve landscaping at his Florida Keys home, and show an imaginary profit to the state.

Mr. Noe s campaign contributions to Republicans increased substantially in

1998 after he received the first $25 million 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.

The workers compensation bureau was on the verge of investing a third $25 million in his coin funds last spring when The Blade began reporting on problems with the unusual investment. They quickly backed off further investments with Mr. Noe.

Although the indictment does not spell out the specifics of each alleged forgery, it does say that one occurred in April, 2002. Mr. Petro has earlier said that Mr. Noe transferred $150,000 from the coin funds into his personal business, Vintage Coins and Collectibles on April 30, 2002. That same day, he wrote a check from his business account to Gerry Gordon for $110,000. The check, endorsed with a signature, was deposited into the personal bank account of Mr. Noe and his wife, Bernadette, at National City Bank.

Four days earlier, Mr. Noe wrote a check from his personal accounts for

$43,773 for landscaping work on the family s home in the Florida Keys.

Before transfer of the $110,000 check, the bank had insufficient funds from the Noes to cover the landscaping charge.

But Mr. Gordon, a former member of the Ohio Board of Regents, signed an affidavit swearing that he never received the check from Mr. Noe and that the signature endorsing the check was forged.

The collapse of the state s rare-coin investment led to the resignation of the bureau s administrator-CEO James Conrad, and the firing of Jim McLean, the former chief investment officer. Mr. McLean s predescessor, Terry Gasper, was pressured to resign in October, 2004, after the hedge fund losses were exposed.

The collapse of the rare-coin investment and the $215 million loss in a risky hedge fund led to the bureau s decision last November to terminate its

69 remaining money managers and invest nearly all of its $15.7 billion portfolio into fixed-income funds.

***

Today s indictments are expected to make national news and breathe new life into a scandal that Democrats say gives them the best chance to capture the governor s office, which the GOP has controlled since 1991. Mr. Noe, who was chairman of President Bush s re-election efforts in northwest Ohio, gained the elite fund-raising status of Bush Pioneer for raising at least $100,000 for the re-election campaign.

Mr. Noe last year resigned from posts at the U.S. Mint, the Ohio Board of Regents, and the Ohio Turnpike Commission.

Politicians from Washington to California including President Bush have sought to return Mr. Noe s political contributions, which exceeded $200,000 since 1990.

Brian Hicks, who served as Mr. Taft s chief of staff from 1999 until 2003, was convicted on a first-degree misdemeanor charge for failing to disclose on his state-mandated ethics form that he received a cut-rate vacation at the Florida Keys home owned by Mr. Noe and his wife, Bernadette, a former chairman of the Lucas County Republican Party, as is Mr. Noe.

Mr. Hicks executive assistant, Cherie Carroll, was charged with an ethics violation because she accepted expensive meals paid by Mr. Noe that could have influenced decisions she made in her job. Mr. Hicks has a lobbying and consulting firm, and Ms. Carroll is among the employees. Both Mr. Hicks and Ms. Carroll were fined $1,000 each.

Last Friday, Columbus prosecutors filed criminal charges against H. Douglas Talbott and Doug Moormann, lobbyists and former high-ranking aides to Governors Voinovich and Taft.

Mr. Talbott was charged with one misdemeanor count of violating state ethics law for failing to disclose a $39,000 payment he received from Mr. Noe in September, 2002, which Mr. Talbott said was a loan to help buy a vacation home in Lakeside, Ohio. He left the governor s office in May, 2000, to become a Columbus lobbyist.

He also was charged with failing to disclose meals and other gratuities he received as a member of the Noe Supper Club a group of Columbus insiders who accepted lavish dinners from the coin dealer at Morton s steakhouse, a popular upscale hangout for the politically connected, including members of Governor Taft s staff.

It is a first-degree misdemeanor to falsify an ethics form, with a maximum penalty of six months in jail and a $1,000 fine.

Mr. Talbott was required to file an annual ethics statement because Mr. Taft had appointed him to the state Board of Cosmetology.

Prosecutors also charged Mr. Talbott, 41, with one count of violating state campaign finance law by funneling money from Mr. Noe to contribute to three Republican state Supreme Court candidates. If convicted, Mr. Talbott could face a fine of up to $10,000.

Mr. Moormann, 39, was charged with one misdemeanor for failing to disclose a $5,000 loan he received from Mr. Noe in 2004 after he had left the governor

s office, said Lara Baker, chief legal counsel in the Columbus prosecutor s division.

At the time, Mr. Moormann was a member of the Transportation Review Advisory Council, which reviews transportation projects for the Ohio Department of Transportation. He now is a lobbyist for the Cincinnati Area Chamber of Commerce.

Under state law, public officials must report the source of gifts valued above $75 and must disclose the sources of loans.

Contact Mike Wilkinson at:mwilkinson@theblade.com or 419-724-6104

Read more in later editions of The Blade and toledoblade.com.



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