Defense: Borrowing Was in Ohio Contract
TOLEDO, Ohio (AP) _ Authorities found a fraction of the expected $13 million in rare coins owned by the state when they searched the business of a politically connected coin dealer in 2005, a state investigator said Tuesday at the dealer’s embezzlement trial.
Instead, the state agents counted coins worth only about $600,000, said Tom Wersell, director of investigations for the Ohio Bureau of Workers’ Compensation.
Coin dealer Tom Noe is accused of stealing more than $2 million from the workers’ compensation bureau’s coin investment and spending it on his business and renovating his home in the Florida Keys.
His attorneys argue that Noe’s contract with Ohio to oversee the investment permitted him to borrow money from the fund or loan it to others.
``You can’t steal something from the owner of property if they give you permission to use it,″ defense attorney William Wilkinson said in his opening statement Monday.
The investment scandal has battered Republicans who control the state, raising Democrats’ hopes of retaking the governor’s office for the first time since 1990. Democratic U.S. Rep. Ted Strickland has a wide lead over Republican Ken Blackwell, Ohio’s secretary of state, in gubernatorial race polls.
Prosecutors say Noe, 52, was deep in debt when he got the money, and he quickly used it to pay off his creditors.
Within a week, Noe put $1.75 million into his own business and wrote himself a $135,000 check to support ``a lifestyle he felt he deserved,″ said Lucas County Assistant Prosecutor John Weglian.
``He needed money,″ Weglian said. ``He needed it desperately.″
Noe, once a go-to guy for the Republican Party, has pleaded not guilty to theft, money laundering, forgery and corrupt activity charges.
The state fund for injured workers initially invested $25 million with Noe in 1998, followed by another $25 million in 2001.
Weglian said Noe kept two sets of financial records _ one for the workers’ comp agency and one for his own business. When state officials wanted to check the status of the coins Noe told them he had bought, he created false documents and borrowed coins from other dealers to trick investigators, Weglian said.
When state investigators began looking into the investment in 2005, 96 percent of the coins Noe said he owned were actually borrowed from others, Weglian said.
Noe attorney Wilkinson said the bureau’s leaders ``fell down on the job″ when they approved the deal. He said the bureau gave Noe wide authority to manage the investment and that he spent millions buying other collectibles such as historical documents and rare paintings.
Defense attorney John Mitchell pointed out to Wersell on Tuesday that managers from the bureau knew for several years that Noe was using the coin fund money to pay off debts and invest in property and collectibles. Wersell testified he didn’t know that until April 2005.
In a different case, Noe pleaded guilty earlier this year to funneling $45,000 to Bush’s re-election campaign. He was sentenced last month to two years and three months in federal prison but won’t start serving that sentence until the state charges are resolved.
Investigations into the coin investments led to separate ethics charges against Gov. Bob Taft, who pleaded no contest last year to failing to report golf outings and other gifts.