"Coingate" erupts
numispro
Posts: 103
From www.toledoblade.com
$10 million to $12 million in coins missing; Noe faces criminal charges
BLADE STAFF
COLUMBUS — The Ohio Attorney General’s office announced today that the state will immediately pursue civil and criminal measures against Maumee coin dealer Tom Noe after his legal counsel informed the state that a substantial amount of assets from his Capital Coin Funds are missing.
Mr. Noe’s legal counsel advised the state that $10 million to $12 million of the state’s assets held by Capital Coin are unaccounted for.
The Ohio Bureau of Workers’ Compensation has invested $50 million with Mr. Noe’s rare-coin funds since 1998.
“Today’s news makes it clear that Tom Noe has irresponsibly mismanaged the monies of the state of Ohio,” Governor Bob Taft said today in a statement released by his office. “Such criminal action is outrageous and will not be tolerated. We will pursue all legal avenues possible to recover these funds for injured workers and employers. It is imperative that we do all we can to keep the Bureau of Workers’ Compensation (BWC) solvent and strong.”
State and local law-enforcement authorities served a search warrant this afternoon on Mr. Noe’s Monclova Township headquarters in an attempt to catalog state-owned items stored inside the coin and collectibles business.
Inspector General Tom Charles was on site with other high-ranking officials, including Lt. Col. Art Reitz of the Ohio Highway Patrol, and officials from the Ohio Auditor’s office and the Ohio Bureau of Workers’ Compensation.
The bureau recently moved to dissolve the state coin venture amid concerns about management.
Access to the property was blocked by Ohio Highway Patrol cruisers, and uniformed personnel and state workers were seen going into the building with empty boxes.
Officials said they could be there all night.
Mr. Charles declined any other comment.
The search warrant was issued by a Lucas County Common Pleas Court Judge earlier today.
$10 million to $12 million in coins missing; Noe faces criminal charges
BLADE STAFF
COLUMBUS — The Ohio Attorney General’s office announced today that the state will immediately pursue civil and criminal measures against Maumee coin dealer Tom Noe after his legal counsel informed the state that a substantial amount of assets from his Capital Coin Funds are missing.
Mr. Noe’s legal counsel advised the state that $10 million to $12 million of the state’s assets held by Capital Coin are unaccounted for.
The Ohio Bureau of Workers’ Compensation has invested $50 million with Mr. Noe’s rare-coin funds since 1998.
“Today’s news makes it clear that Tom Noe has irresponsibly mismanaged the monies of the state of Ohio,” Governor Bob Taft said today in a statement released by his office. “Such criminal action is outrageous and will not be tolerated. We will pursue all legal avenues possible to recover these funds for injured workers and employers. It is imperative that we do all we can to keep the Bureau of Workers’ Compensation (BWC) solvent and strong.”
State and local law-enforcement authorities served a search warrant this afternoon on Mr. Noe’s Monclova Township headquarters in an attempt to catalog state-owned items stored inside the coin and collectibles business.
Inspector General Tom Charles was on site with other high-ranking officials, including Lt. Col. Art Reitz of the Ohio Highway Patrol, and officials from the Ohio Auditor’s office and the Ohio Bureau of Workers’ Compensation.
The bureau recently moved to dissolve the state coin venture amid concerns about management.
Access to the property was blocked by Ohio Highway Patrol cruisers, and uniformed personnel and state workers were seen going into the building with empty boxes.
Officials said they could be there all night.
Mr. Charles declined any other comment.
The search warrant was issued by a Lucas County Common Pleas Court Judge earlier today.
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Comments
The Ludlow Brilliant Collection (1938-64)
Russ, NCNE
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
That's what I half-expected to happen. Cash profit reported and booked, while the nest egg ($50M), presumed to be intact, is depleted. It is still way too early to determine what actually happenned, but it is not looking good for Mr. Noe and his associates.
edited: kant speel
If Noe has close ties with Bush he can just ask the FED/Treasury to print the money for him. At $2 Billion per day, $10 million shouldn't be missed.
roadrunner
Hmmmmmm
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
roadrunner >>
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
The Ludlow Brilliant Collection (1938-64)
roadrunner
Exactly!
Hopefully the stolen money can be traced to his "new" investments.
Joe
Noe way!
<< <i> Will this end up being the straw that breaks the market's back?
Noe way! >>
Very Punny.
I Noe we are going to have a lot of fun with this one.
A veritable numismatic "Soap opera" will unfold before our very eyes.
No doubt books will be written and movies will be made (I will read the book and see the movie, where is my popcorn?), the public's "right to know" will be satisfied and money will be made off of this debacle by lawyers, agents, principals, etc. but the Ohio Bureau of Worker's Compensation will not be made whole from the bad guys. Not to worry though, the corporate and human citizens of Ohio (at least those who pay Worker's Comp premiums and/or taxes) will take care of any loss through higher taxes.
Experience the World through Numismatics...it's more than you can imagine.
An attorney for the coin dealer, Tom Noe, told inspectors that $10 million to $12 million is missing from the $55 million coin fund owned by the Bureau of Workers' Compensation, the state attorney general's office said.
Officials don't know what assets are missing or where those items are supposed to be, bureau spokesman Jeremy Jackson said.
The State Highway Patrol used a search warrant to enter Noe's suburban Toledo coin shop, where a scheduled inventory of the coins and memorabilia by state auditors and bureau fraud investigators was halted after attorney William Wilkinson revealed the shortfall to officials in Columbus.
"Such criminal action is outrageous and will not be tolerated," Gov. Bob Taft said in a news release. "We will pursue all legal avenues possible to recover these funds for injured workers and employers."
The investigators had gone into the shop under a court order issued Thursday morning, but weren't able to remove coins from their cases to inspect them and verify authenticity, Jackson said.
The state inspector general and other state agencies had been looking into the $50 million the bureau gave Noe to invest, which should have had $5 million in profit on hand, Jackson said. Also, federal authorities are looking into possible campaign finance violations stemming from Noe's contributions to President Bush's re-election campaign.
"Mr. Noe will continue to cooperate with the investigation," said Jud Scheaf, Wilkinson's legal partner, who said he could not provide more details.
Attorney General Jim Petro will ask the Franklin County judge who issued the emergency order to freeze all personal and business assets of Noe and his wife, Bernadette, former chairwoman of the Lucas County Republican Party, Petro spokeswoman Kim Norris said.
The bureau had made $15.3 million from the investments while Noe has collected about $3.8 million. His shop in Maumee, a Toledo suburb, had one of the two largest caches in the collection.
The fund with tens of thousands of coins represented less than 1 percent of the bureau's total $14 billion in investments. Questions began when an outside consultant said 119 coins that were bought for $93,000 were missing. Noe blamed a Colorado dealer who was keeping the coins.
Franklin County Common Pleas Judge David Cain issued an order Thursday morning to grant access to the coins in the Maumee shop and ban any buying or selling from the fund after Noe and his attorney denied access for three days. The order also called for moving the coins from sites in five states to one secure spot.
Fraud investigators had kept the shop under 24-hour surveillance since Tuesday to ensure no coins were removed, and the Patrol was guarding it Thursday, Jackson said.
About a dozen cars were in the shop's lot on Thursday, and a sign on the door read, "Closed for inventory." No one answered a knock.
The bureau does not know what coins or collectibles the fund owns or their value, Jackson said. Noe last gave the bureau an inventory of the holdings in August, and as a wholesale dealer typically turns over 90 percent of his stock a year.
Inventories were nearly complete in Florida, Colorado and Pennsylvania, and a small collection held in Delaware was being transported to Columbus.
The bureau learned for the first time Wednesday that Noe claimed to have bought artwork, autographs and other collectibles instead of coins, Administrator James Conrad said. Noe's contract allowed him to invest in real estate and make loans from the fund, Jackson said, but the bureau knew only that he had some collectibles as collateral for a $530,000 loan.
The bureau has 77 similar funds in which it contracts with outside managers to invest in private equity, such as real estate or venture capital. Investment experts recommend keeping about 5 percent of a portfolio in private investments as a hedge against stock losses, Jackson said, but the bureau is reconsidering because of questions about the coin fund.
Meanwhile, Senate President Bill Harris said Thursday he would seek a state budget amendment, aimed only at the bureau, to ban investment in items including coins, stamps, artwork and horses. The full Senate is set to vote on the two-year budget next week, then send it to a joint committee to work out differences with the House version.
"These items may bring in big returns for an individual investor or collector willing to take major risks. But when it comes to an investment fund that provides a safety net for injured workers, we can't be too careful," Harris, an Ashland Republican, said in a news release.<!-- end body-content -->
The Ludlow Brilliant Collection (1938-64)
"Seu cabra da peste,
"Sou Mangueira......."
BTW, as far as state investment scandals go, $10 - $12mm is chickenfeed!! Connecticut's recycling authority lost approximately $110mm on a $220mm "energy deal" with Enron, and is trying to recover the rest.
Edit: Corrected per Roadrunner's post below. Guess I had a Dan Rather moment!
NOT TRUE. This has already appeared in CT newspapers that the CRRA (CT Resources Recovery Authority) negotiated a settlement with Deutsche Bank to recover approx $111-113 Million from the Enron fiasco. That has been paid to CRRA. CRRA negotiated a settlement from Enron for about $85 MILL as I recall and Deutsche bought that marker for $111+ MILL. CRRA along with the state of CT intend to try and recover the rest of the money. Based on how they've done so far, I wouldn't bet against them. They've already got over 50% of the money back. The $220 million never belonged to the CRRA but they used that money in a private deal with Enron.
Nearly the entire upper level staff of CRRA as well as the governor and his cronies have been given the boot in the interim...though the governor got tossed out on different charges.
Is it too late to redesign the Ohio state quarter? How about a nice
pastoral scene of "coingate?" Ironic that one dealer was accused of losing $93,000 in coins but the accuser is now accused himself of losing $10,000,000 in coins. Oops.
roadrunner
<< <i>BTW, as far as state investment scandals go, $10 - $12mm is chickenfeed!! Connecticut's recycling authority lost $220mm on an "energy deal" with Enron. They might get 5 cents on the dollar when all the lawsuits are settled --- in 10 years!!
NOT TRUE. This has already appeared in CT newspapers that the CRRA (CT Resources Recovery Authority) negotiated a settlement with Deutshe Bank to recover approx $111-113 Million from the Enron fiasco. That has been paid to CRRA. CRRA negotiated a settlement from Enron for about $85 MILL as I recall and Deutsche bought that marker for $111+ MILL. CRRA along with the state of CT intend to try and recover the rest of the money. Based on how they've done so far, I wouldn't bet against them. They've already got over 50% of the money back.
roadrunner >>
Thanks for the correction RoadRunner. Still a $110 million loss, but certainly not a total one, and they might recover more. I must have been out of town when that hit the papers!!
roadrunner
roadrunner
<< <i>uniformed personnel and state workers were seen going into the building with empty boxes. >>
Perhaps coming out with empty boxes, too!
"Seu cabra da peste,
"Sou Mangueira......."
I agree. I would have assumed that the coins would have been stored on State premises.
While Mr. Noe was negligent...
I think it is too early to conclude his negligence. All we know is what the media wants us to know. Just like the media wanted us to know about the flushed Korans, Bush AWOLs, etc.
This is the way business is done at market tops. Stocks, bonds, and real estate too. No one wants to know the dirty details. Just give me the financing and let the deal go through.
Sobering point. While I doubt that this incident will take down the market--heck, we don't even know if there are any coins around to liquidate, perhaps years from now this incident will be associated with the top of the coin boom that lasted until 2005. Then again, perhaps not.
<< <i>This is sad and not the kind of publicity Rare coins deserve >>
This reflects badly on the crooks that stole from the funds and not the coins themselves. As far as this discouraging people from using coins as an investment, I don't consider this as necessarily a bad thing.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
That's what I half-expected to happen. Cash profit reported and booked, while the nest egg ($50M), presumed to be intact, is depleted. It is still way too early to determine what actually happenned, but it is not looking good for Mr. Noe and his associates.
it would seem that theft of funds wouldn't negate the fact that the fund was profitable. i find it ironic that "investment" is viewed as such a nasty word in Numismatics when it most certainly happens more than we'd like to think. my feeling is that the successful "funds" such as this-----and don't kid yourself that there aren't any-----are in private hands where they're free of all that goes along with politics.
sadly, i'm one who will end up helping to make this all whole as Sanction so astutely described. on the bright side, just think of all that fresh material that'll hit the market in the next couple of years as the fund is located and liquidated.
In fairness to Tom Noe, he deserves the same presumption of innocence - he hasn't been found guilty in a court of law either. It also appears that in his case, politics is playing at least some role in the scrutiny and publicity, as well as in the reporting.
Mark, the legal system may claim to have a presumption of innonence but either fortunately or unfortunately the public in general does not view these situations the same way. I don't know the exact per centages but last I heard conviction rates exceed 90% in most jurisdictions around the country. Its the battle of reality with an ideal.
<< <i>COLUMBUS — The Ohio Attorney General’s office announced today that the state will immediately pursue civil and criminal measures against Maumee coin dealer Tom Noe after his legal counsel informed the state that a substantial amount of assets from his Capital Coin Funds are missing. >>
The operative phrase here is "after his (Noe's) legal counsel informed the state that a substantial amount of the assets ... are missing." It would appear that Mr. Noe is admitting through his attorney that assets are missing, and he might be looking to cut a plea bargain.
Sorry, Mark, but I would not be too quick to circle the wagons around Mr. Noe. Given the way the coin market has gone in recent years, one would almost have to work at it to lose money. Heck if the State of Ohio had been one of my regular customers since 1998, they would have been many dollars ahead by now, not $10 mil in the hole.
There's seems to be a real problem here, and I'd say that it goes deeper than "poor investment decisions."
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
Sorry, Mark, but I would not be too quick to circle the wagons around Mr. Noe.
Perhaps one should interpret Mark's statement "Numispro/Mike Storeim, the person who started this thread, has not been widely condemned or found guilty here, based upon the accusations which have been leveled against him" as more of a reminder that if we the chatroom community do not jump down Mike's throat regarding his alleged crimes then we shouldn't jump down Noe's throat at this point either?
but when the guy's own attorney says that $10 million - $12 million of coins are missing... what possible explanation could there be?
It's already acknowleged that other collectibles were purchased - are they included in this total? We don't know, do we. Would it change your view of Mr Noe if the entire $50M were accounted for but had been utilized not just for coins? In other words, it's sloppy [but hardly criminal] if there are $12M worth of collectibles, stocks, bonds and other investments generating a return waiting to yet be accounted. It would be bad if we the chatroom community jump to the conclusion that the funds have been spent on coins that are 'missing' based off a single sentence open to interpretation.
It never ceases to amaze me how folks miss the most obvious red flag...the funds return......that too much profit is often indication of cooking the books, hiding material information or just plain good old fraud.
Personally, I feel the Fund's return to the State was woefully inadequate and hardly a red flag in that direction.
Also......because of this scandal Ohio is now looking at taxing the sale of coins. Pandora's box has been opened.........
<< <i>I believe the fallout from this case will be felt for years to come regardless of Mr. Noe's guilt/innocence. Regardless of how you feel about investment vehicles using rare coins this case will put a permanent sour taste in the mouths of money managers and/or potential investors.
Also......because of this scandal Ohio is now looking at taxing the sale of coins. Pandora's box has been opened.........
On point number one, no it won't.
Point number 2, of course. You would expect anything different from government?
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Back in the late 1970s and early 1980s the owners of an outfit called Rare Coin Company of America and the second incantation of New England Rare Coin Galleries (the company that operated after James Halprin sold it) bilked millions of dollars out of would-be coin investors. Rare Coin Company’s scam was to sell bright, shiny “sliders” (AU coins) to investors as MS-65 graded coins at wildly inflated prices. New England sold mostly legitimate coins at wildly inflated prices. Ultimately the Federal Trade Commission and the U.S. Justice Department closed down both companies and barred their owners from participating in the numismatic industry.
Despite the obvious wrongdoing, some legitimate coin dealers, who had been the business for years, felt duty bound to defend these companies’ actions in the spirit that they were “colleagues.” In fact these companies were nothing more than bloodsuckers that lived off the funds of naïve people and the reputations and goodwill of honest businessmen in the coin dealer community.
Yes, I was wrong to infer that Mr. Noe is guilty because his attorney has admitted that assets are missing. BUT it would imprudent for legitimate dealers to line up in his defense also. Let the courts hash it out, and if Mr. Noe is innocent, perhaps he will be vindicated. BUT if he is guilty of wrongdoing, let’s not make the mistake again of damaging our position by defending the indefensible.
<< <i>Regardless of how you feel about investment vehicles using rare coins this case will put a permanent sour taste in the mouths of money managers and/or potential investors. >>
The problem is not coins as an investment, but the quality of the people handling the investment. No to mention liquidity issues concerning the investment.
Frankly, if he's guilty of this, I hope he never sees the light of day again.
<< <i>
but when the guy's own attorney says that $10 million - $12 million of coins are missing... what possible explanation could there be?
It's already acknowleged that other collectibles were purchased - are they included in this total? We don't know, do we. Would it change your view of Mr Noe if the entire $50M were accounted for but had been utilized not just for coins? In other words, it's sloppy [but hardly criminal] if there are $12M worth of collectibles, stocks, bonds and other investments generating a return waiting to yet be accounted. It would be bad if we the chatroom community jump to the conclusion that the funds have been spent on coins that are 'missing' based off a single sentence open to interpretation. >>
That could well be, but if that was my attorney, I'd be highly vexed that all he said was that the coins were missing. Why not say that the audit isn't complete, or that an investigation will show that all the assets are identifiable, or that all funds entrusted to his client have not yet been accounted for, or any number of other statements? To simply say millions of dollars worth of assets are missing and leave it at that doesn't sound as though a reasonable explanation is sure to follow.
New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.
Why didn't Mr. Noe buy the 1933 Twenty dollar Saint for $7,500,000 ? It was only one coin.It would have been harder to lose.
Stewart