Within hours of gaining control of $25 million from the state of Ohio in 1998, Tom Noe began stealing it, according to a 53-count indictment unsealed yesterday.
He did not stop, the indictment states, until state officials shut down his coin funds last spring.
The indictment by a Lucas County grand jury alleges that Mr. Noe laundered and stole more than $3 million from the rare-coin investment funds he managed for the Ohio Bureau of Workers Compensation.
If convicted of all charges and sentenced to the maximum penalties, Mr. Noe could face 172.5 years in prison.
Lucas County Prosecutor Julia Bates said a judge would likely sentence him to far less time in prison.
A racketeering count he faces would require a mandatory 10-year prison term, she said.
Mr. Noe, a former chairman of the Lucas County Republican Party, entered a not guilty plea yesterday. A trial date has not been set.
We start a whole new chapter now, Ms. Bates said. We start the litigation process.
Mr. Noe was charged with 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.
Officials believe some of the stolen money helped fuel a lavish lifestyle that at one time included three waterfront homes, including a $2 million sprawling home in the Florida Keys where Mr. Noe, 51, now lives.
Mr. Noe, the longtime Republican benefactor and high-level appointee whose coin dealings with the state have touched off waves of scandal in Ohio, left the Lucas County jail yesterday after posting a $500,000 bond.
The indictment marks the first felony charges leveled as part of the wide-ranging investigation into Mr. Noe and the state s rare-coin investments that was sparked by reports in The Blade beginning April 3.
After the stories began running, Mr. Noe resigned from posts at the U.S. Mint, the Ohio Board of Regents, and the Ohio Turnpike Commission. Several others, including Gov. Bob Taft, were found guilty on ethics charges stemming in part from their relationships with Mr. Noe.
Now Mr. Noe is facing state charges.
We think we have a very good case, said Inspector General Tom Charles, who first announced his own inquiry in April. It s the largest investigation I ve ever been involved in.
Neither Ms. Bates nor Mr. Charles would talk about how much Mr. Noe allegedly stole or how it was used, including whether he used state money to make campaign contributions.
Ms. Bates said prosecutors are treating the case as if it is going to trial.
Timothy LaPointe, Mr. Noe s partner in Vintage Coins and Collectibles in Monclova Township, was also indicted. 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.
An attorney for Mr. LaPointe declined to comment yesterday.
Mr. Noe s attorney in Columbus, William Wilkinson, released a two-sentence statement yesterday afternoon: After a year of rumors and false reports, yesterday s indictment finally brings a set of specific accusations concerning coin-fund operations. Mr. Noe embraces the opportunity finally to defend himself against a concrete set of charges, he said.
During two brief appearances in the Lucas County Courthouse, Mr. Noe said little. He sat emotionless as Judge Thomas Osowik set his bond after his attorney, Jon Richardson, entered a not guilty plea.
Later, as he signed court papers regarding his bond, he politely answered the questions of deputy clerk Yolanda Castilleja.
All right, thank you very much, he said before leaving.
Bail-bond firm Wittenberg Associates put up the $500,000 surety bond. Mr. Noe had to give them $50,000 to post the bond for his release, money he won t be getting back. Jail officials said Mr. Noe was kept in a holding cell by himself while he waited for the process to take place.
Coin dealer and GOP fund-raiser Tom Noe, left, arrives at the Lucas County Courthouse with attorney Jon Richardson.
Mr. Noe s wife, Bernadette, also a former chairman of the Lucas County Republican Party, said it was a very sad and difficult day for me and Tom, our children, my parents Francis Buddy Restivo, and the rest of the Noe and Restivo families.
Not only are we sad for Tom today, we are fearful for him as well, because we believe he cannot get a fair and impartial trial in Lucas County, given the persistent media frenzy over the past 10 months, she said in a written statement.
When the power of the government is brought to bear on a person, the pressure and stress is crushing, said Mrs. Noe, who is working as an attorney in Florida.
Prosecutors declined to release details on where they think the stolen money went. But Ms. Bates said she found the evidence in the case very troubling, I ve got to be very honest with you.
Questions remain on how the money was spent, and whether any of it was used for Mr. Noe s burgeoning political contributions; his political giving multiplied substantially after the bureau wired him the first $25 million on March 31, 1998.
The indictment alleges that Mr. Noe laundered $135,000 that day and stole $100,000. Over the month, the indictment alleges that Mr. Noe laundered nearly $800,000 and stole between $315,000 and $600,000.
In addition to thefts ranging from $5,000 to $1 million, the indictment alleges that Mr. Noe tampered with records and forged numerous documents. It also seeks forfeiture of his Monclova Township coin shop and shares in a coin-industry business.
In July, Ohio Attorney General Jim Petro alleged that Mr. Noe forged a check to Gerry Gordon, a former colleague on the Ohio Board of Regents. That allegation is one of the forgery counts in the indictment.
According to Mr. Petro, Mr. Noe transferred $150,000 from the coin funds into his personal business, Vintage Coins and Collectibles. That same day, he wrote a check from his business account to Mr. 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.
Mr. Petro said that 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.
Mr. Gordon signed an affidavit swearing he never received the check from Mr. Noe and that the signature endorsing the check was forged.
At the center of the millions in deals was Rare Coin Enterprises LLC, the subsidiary Mr. Noe created and infused with $2 million in state money nine days after he received the first $25 million from the Ohio Bureau of Workers Compensation.
Last July, Mr. Petro, a Republican running for governor, accused Mr. Noe in a civil lawsuit of stealing at least $4 million of the state s money from the coin funds. Several of the elements of that suit mirror elements in the indictment.
For instance, Mr. Petro said that on July 31, 2001, within a day of Mr. Noe receiving his second $25 million installment from the bureau, the coin dealer moved $2 million from Coin Fund II into Vintage Coins business accounts.
A day later, Mr. Noe used the money to pay off a $393,000 commercial loan, which he would not have been able to cover without the state s money because the balance in his own account was too low. That amount is identical to an amount contained in one of the money-laundering counts against Mr. Noe.
Mr. Noe fraudulently documented the $2 million payment as a coin purchase by the coin funds, Mr. Petro said.
Then, three weeks later on Aug. 22, 2001, Mr. Noe transferred $786,000 to Coin Fund I from the $2 million of Coin Fund II money he had deposited into his Vintage account. Mr. Noe on the same day made a profit distribution from Coin Fund I to the bureau for $776,839.
The indictment alleges Mr. Noe laundered $786,000 on that same day.
In addition to yesterday s charges, Mr. Noe is facing three felony counts in U.S. District Court related to the alleged laundering of $45,400 into the Bush-Cheney re-election campaign. He has pleaded not guilty and has been free on a $350,000 bond. If convicted on the federal charges, Mr. Noe could face as many as five years in a federal penitentiary for each of the three counts and a fine of nearly $1 million.
A forensic accounting firm hired by state Auditor Betty Montgomery worked with Lucas County officials on the investigation. A report by Crowe Chizek and Company details many of the allegations and were used to build the case against Mr. Noe, said John Weglian, an assistant prosecutor.
The Crowe Chizek report has been provided to Ms. Montgomery, who is running for state attorney general, but yesterday she refused to make it public.
Ms. Montgomery, who received $8,150 in campaign contributions from the Noes, has been accused of waiting too long to order a special audit of the coin funds.
Local and state officials said yesterday that the indictment does not reflect how much they believe Mr. Noe stole. Mr. Weglian said there could have been hundreds of other criminal counts filed against Mr. Noe.
To cover every single thing that went on, we would be here for weeks reading the indictment, Ms. Bates said.
Referring to statements from Mr. Noe s attorneys in May that up to $13 million from the coin funds could be unaccounted for, Mr. Charles said: When the auditor issues its report, hopefully we ll get a definite dollar amount.
Jen Detwiler, a spokesman for the state auditor, said Ms. Montgomery plans to release the special audit next week.
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 yesterday s indictment could 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 prosecutor also said that her office would listen if Mr. Noe wanted to talk. Whether it would help him, she said, would depend on What does he have to say? What does he have to contribute? What does he have to offer?
The indictment against Mr. LaPointe alleges that he assisted Mr. Noe in 2002, 2003, and 2004 in putting coins into the state s inventory when in fact they did not belong to the two Capital Coin funds that Mr. Noe operated.
The intent was to mislead the auditors about $1 million stolen from the coin funds, the indictment states.
Gov. Bob Taft s press secretary, Mark Rickel, said yesterday that the governor considers the charges against Mr. Noe very serious and he is working on reforming the bureau to prevent anything like this from happening again.
It appears the multiagency task force has done a thorough job, said Mr. Rickel. The charges are extremely serious and we hope in the end that justice is done.
Mr. Taft last summer became the first sitting Ohio governor to be convicted of a crime after he failed to report numerous golf outings and gifts on his ethics forms including at least two golf games from Mr. Noe.
Two of Mr. Taft s aides, including former chief of staff Brian Hicks, were convicted on similar charges last summer for failing to disclose gifts from Mr. Noe.
Mr. Hicks yesterday did not return a message seeking comment.
U.S. Sen. George Voinovich, a Republican who was governor at the time the state began to invest in rare coins with Mr. Noe, also failed to return messages seeking comment. He appointed Mr. Noe to both the Bowling Green State University board of trustees and the Ohio Board of Regents.
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 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.
Gregory White, U.S. attorney for the Northern District of Ohio, credited the work of Ms. Bates and Franklin County Prosecutor Ron O Brien, and the investigators who worked with them.
Mr. White declined comment when asked if Mr. Noe had any information that could be useful in the ongoing investigation into the bureau s investment practices.
Since the scandal erupted, Mr. Noe has sold his Maumee condominium, his million-dollar home on Lake Erie, as well as boats and cars.
In December, Bill Brandt, who was hired by the attorney general s office to liquidate the rare-coin funds, said if they had operated in the fashion they were supposed to operate, the state could have seen a substantial return on its investment.
Mr. Brandt, president of Chicago-based Development Specialists, Inc., spoke a day after Mr. Noe and his attorneys held a news conference in Columbus and claimed the investment should be worth about $61.8 million.
Mr. Brandt has said he still expects a significant recovery on the coin fund based on the liquidation process.
If the money had not been stolen on the front end, the state would have made more money, Howie Hudson, an investigator with the state Highway Patrol, said yesterday.
Mr. Hudson said he did not have a precise amount on how much more the state would have received.
The collapse of the rare-coin investment led to the resignation of the bureau s top administrator, former CEO James Conrad, and other high-ranking officials with the bureau, which is the state agency charged with paying medical bills and providing monthly checks to Ohio workers injured on the job.
It also led to the revelation that the bureau had lost $215 million in a risky hedge fund.
The bureau decided in November to terminate its 69 remaining money managers and invest nearly all of its $15.7 billion portfolio into more conservative fixed-income funds.
The 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 Republican Party 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.
Politicians from Washington to California including President Bush have sought to return Mr. Noe s political contributions, which exceed $200,000 since 1990.
After months of investigation led some to question whether the Lucas County prosecutor s office would find any wrongdoing, Ms. Bates said she was relieved to be able to reveal her office s work, the cost of which required Ms. Bates to get more money from the county commissioners.
This was such a long, arduous process, and I m pleased that part is over, she said. We have been able to demonstrate that we weren t just twiddling our thumbs and that we ve been working diligently to get some answers.
Blade staff writers Joshua Boak, Steve Eder, Christopher D. Kirkpatrick, and Mark Reiter contributed to this report.
Contact Mike Wilkinson at: firstname.lastname@example.org or 419-724-6104.
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