By John Seewer The Associated Press
TOLEDO – A coin dealer and GOP fundraiser hired to manage an unorthodox state investment in rare coins was charged yesterday with embezzling at least $1 million in an election-year scandal that has sent Ohio Republicans running for cover.
Tom Noe, 51, pleaded not guilty and was jailed on $500,000 bail. He was arrested over his handling of a $50 million investment fund set up by the state workers’ compensation bureau in an unusual attempt to make money by buying and selling rare coins.
The 10-month investigation led to sweeping changes at the workers’ compensation bureau and prompted lame-duck Gov. Bob Taft and two former aides to plead no contest to ethics charges. Two other former Taft aides were charged last week, accused of failing to report loans and other favors from Noe.
After the scandal broke last year, President Bush and Republicans in Ohio rushed to give back donations from Noe. The furor has also raised Democrats’ hopes of retaking the governor’s office and other key elected positions in this year’s elections.
Noe was charged yesterday with stealing money from the coin investment fund by writing numerous checks, sometimes for hundreds of thousands of dollars each.
Lucas County Prosecutor Julia Bates would not say how much money Noe is alleged to have stolen, but one of the charges accuses him of embezzling at least $1 million. The Ohio attorney general has said he believes Noe stole up to $6 million.
Ohio Inspector General Tom Charles said investigators know where the money went, but he would not say where. Investigators were looking into whether any of the stolen money was donated to political candidates.
Noe already faces charges of illegally funneling $45,000 to Bush’s re-election campaign. The 53 new counts include racketeering, forgery, theft, money laundering and tampering with records, with the most serious charge carrying up to 10 years in prison.
Noe and his attorney, Jon Richardson, refused to any answer questions after leaving the courtroom. Richardson has acknowledged a shortfall of up to $13 million of the money Noe invested for the Ohio Bureau of Workers’ Compensation.
In recent years, Noe became one of the state’s top fundraisers and personally contributed more than $105,000 to Republicans, including Bush and the governor, during the last campaign.
After the scandal broke, the Democrats bitterly complained that Noe was hired to manage the investment because of his political donations. They charged that the coin investments were another example of GOP corruption and self-dealing that resulted from virtual one-party rule in Ohio, where Republicans have controlled the governor’s office, the Legislature and most statewide elected positions for 12 years. Ohio was also the state that put Bush over the top in the 2004 White House race.
The investigation began after The Blade newspaper reported in April that the workers’ compensation bureau had invested $50 million in rare coins with Noe.
Prosecutors also charged Noe’s business partner, Timothy LaPointe, with engaging in corrupt activity and tampering with records. The two ran a rare-coin business in suburban Toledo.
Key events in the noe scandal:
1998 -The Ohio Bureau of Workers’ Compensation invests $25 million and appoints coin dealer Tom Noe to oversee the buying and selling of rare coins. The deal allows Noe to keep 20 percent of the profits.
April 3, 2005 – The (Toledo) Blade reports that Workers’ Compensation has invested $50 million in rare coins with Noe, a top Republican donor and fundraiser in Ohio.
May 26 – Noe’s attorney tells state inspectors that $10 million to $12 million is missing from the coin fund.
Oct. 27-Noe indicted on charges of funneling $45,400 to President Bush’s re-election campaign to skirt giving limits in federal campaign finance laws.
Feb. 13, 2006-Noe is indicted in Lucas County Common Pleas Court on numerous counts of theft, money laundering, forgery and tampering with evidence, as well as engaging in a pattern of corrupt activity, for his handling of the $50 million coin investment.
Source: AP research
