<< <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......... >>
Hey Chris, You want to come over and go with me to a Sheriff's sale????
edited to add.... It's only a mile or so away from me!
<< <i>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. >>
Kranky, perhaps the attorney did say more, but it was not reported/included. While I have no knowledge that such was the case, it certainly wouldn't surprise me if it were so.
Geesh - this is what 90% of the companies most of us invest in do anyway. Instead of fungible coins though they just start printing more stock and handing it out as options to their executives, use it as collateral to back huge loans that end up not getting paid, and otherwise pump more stock out into the marketplace - all resulting in a devaluation of the stock we originally purchased. Looks like these guys are just trying to run the "coin fund" the same way they were taught to run stock funds.
<< <i>That kind of wipes out most of the "profit" they were touting.
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. >>
I'd rather see Politicians detect fraud as they apparently have.
i'm not convinced that politicians detected anything. more likely there were those coins missing and a private individual blew the whistle because it was his loss and the pols started to hunker down into survival mode. Gov. Taft of the Great State of Ohio leaves much to be desired as do many of the members of his cabinet. the house of cards begins to fall as his opponents prepare to make hay.
<< <i>I'd rather see Politicians detect fraud as they apparently have.
i'm not convinced that politicians detected anything. more likely there were those coins missing and a private individual blew the whistle because it was his loss and the pols started to hunker down into survival mode. Gov. Taft of the Great State of Ohio leaves much to be desired as do many of the members of his cabinet. the house of cards begins to fall as his opponents prepare to make hay. >>
<<< Geesh - this is what 90% of the companies most of us invest in do anyway. Instead of fungible coins though they just start printing more stock and handing it out as options to their executives, use it as collateral to back huge loans that end up not getting paid, and otherwise pump more stock out into the marketplace - all resulting in a devaluation of the stock we originally purchased. Looks like these guys are just trying to run the "coin fund" the same way they were taught to run stock funds. >>>
<< <i>it would seem that theft of funds wouldn't negate the fact that the fund was profitable. >>
Unless the "profit" was created out of the states own money by the companies Noe created buying and selling the same coins back and forth between each other. Until the coins are liquidated it won't be possible to say if any real profits were realized or not.
<< <i>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, with all due respect, this situation smells extremely ugly. My bet is that "negligence" is much too kind a word here to characterize the situation. Criminal fraud, embezzlement, and larceny driven by unfettered arrogance and greed will likely be the correct analysis. And no, I do not say this out of any political motivation at all. Just a sad acknowledgement of human nature. "Innocent until proven guilty" is an important cornerstone of any civilized criminal justice system, but that didn't absolve O.J. Simpson in the court of public opinion. We are entitled to have opinions, regardless of the principles of the dosctrinal justice. And my opinion is that Mr. Noe smells worse than Limburger cheese.
Anyone who doesn't think this is bad for the rare coin business is mistaken. Investment funds and portfolios have played a major role in the stellar rise of high-end rarities in the last three years.
<< <i>Mark, with all due respect, this situation smells extremely ugly. >>
Sunnywood, (Bill and others who have addressed me in this thread ) - I agree that this situation sounds "extremely ugly", to say the least.
One of the main points I was trying to make, was that people have been quite easy on Numispro/the originator of this thread (who has been accused of a number of wrong doings himself regarding his involvement with the fund), while at the same time, coming down very hard on Tom Noe.
Perhaps it's because the accusations against Tom Noe are newer and thus fresher in posters' minds, but there seems to be somewhat of a double standard taking place.
The thread is interesting and expresses the polar views of forum members based on incomplete data as described by the press. Nevertheless the situation whereby a speculative vehicle is used to buy products of questionable liquidity and subjective valuation is one of possible concern. This rarely happens in the beginning of a valuation cycle and sometimes is the trigger for a broader reassessment of valuation in the marketplace. I am not sure if the comments suggesting that questionable and perhaps illegal management practices are OK if the venture is profitable were said tongue in cheek; I hope so.
I would say that I do not know anything about anything or anyone in this affair. Seeing it unfold is like watch a train wreck in slow motion. I predict that the story will captivate the numismatic audience for some time to come. While I hope things work out as best they possibly can for all parties involved, at this point I am quite skeptical that will be the case.
The money can easily be accounted for by having ACG regrade all the coins. Problem solved. Alan Hager are you available?
Ironic too that Mr. Noe came from the roots of that same company listed earlier that eventually was sold and turned very sour in the mid 1980's. I can still remember one of their sales reps coming to my house in 1984-85 to show me "real" gem proof type coins. He didn't stay long after I saw the cleaned junk he was peddling. Not to defend these guys, but MANY major dealers at that time were also selling cleaned junk for gem 65 prices. A number of them are at the top of the coin world today claiming how righteous they are. Back then, they just didn't do it often enough to get nailed by the Feds.
I would concur with Bill Jones that any good coin dealer could have easily generated an impressive gain on $50 million from 1998....and far far better than $10-15 Million. That money could have easily been doubled in that time frame. Being PNG doesn't necessarily guarantee anything, just as in life in general. There are dozens of top notch pro's out there that for 1%/year ($500K) could have turned eye opening profits with that fund from 1998-2003 without cooking any books. $15 mill proft? That's pretty poor when you're paying pros $3 million or more in fees to run it! It's just unfortunate that at times our hobby does tend to invite people to act other than in their client's best interests. And that's a claim I level against the majority of the dealers in today's hobby. You know, buying across the counter at 5 to 30 cents on the dollar. Or selling overgraded coins at multiples of what they paid. They look out for themselves first and the client second. Unfortunately it has always been that way. And that's not unlike how the regular financial investment world works.
I've always said that if you found an honest auto mechanic, or car dealer, or a totally honest coin dealer, that the world will beat a path to your doorstep. Well I found that honest mechanic in 1991 after 15 years of looking. Have not found a 2nd one since. The coin and car dealers? Hmmm...........
It's easy to spend $1.85MM on a house when you've been paid $3.8 MM for managing $50MM in state funds while possibly embezzling additional monies from those funds at the same time. Why Florida? That's easy ... Florida allows criminal convicts and civil defendants to keep their primary residence when they are forced to disgorge wrongly converted money. People in Noe's legal position often run to Florida and build the largest houses possible as a way to keep some of their ill-gotten gains.
Does it matter that he declared FL as his primary residence AFTER he's been accused of wrongdoing? Can that residency declaration be nullified by the courts?
And as far as people going to Jail for misdeeds as discussed already....no one from CT has been found at fault to date for the $220 Million Enron deal. Not the former governor or anyone on his staff nor anyone connected with the CRRA. I hope Ohio has better luck with their investigation. The bigger the deal, the tougher to get to the bottom of it.
This country tolerates CEO's directors, and upper-level executives of PUBLICLY HELD companies who pay themselves gigantic and unjustifiable salaries, bonuses, stock options and perks. Really, all that is going on is that they are taking as much as possible from the owners (shareholders) of the company. There is no limit to greed, unless a limit is imposed externally. The shareholders are too dispersed and have no say. The legislatures are paid off by lobbyists. And so the endless looting of public money continues. In an environment like that, with corporate emperors like Hank Greenberg, Ken Lay, Dennis Kozlowski, the Rigases, et al., it is no surprise to read about this numismatic abuse. Pity though, as it tarnishes the hobby once again. It reminds us of a time when "coin dealer" was synonymous with "con artist" or "criminal." It is a disservice to the many HONEST coin dealers out there.
<< <i>Anyone who doesn't think this is bad for the rare coin business is mistaken. Investment funds and portfolios have played a major role in the stellar rise of high-end rarities in the last three years. >>
We should all be happy. These "funds" just drive up prices and take the nicer coins away from collectors. Thier "gain" is our loss. Who needs them?? Where do you think thier "profits" come from.......from the pocket of the collector. It's just one more set of parasites the hobby doesn't need.
Coins for collectors.......all others.......get out.
Has anyone commented on why someone from the Ohio State Bureau of Workers’ Compensation would have ever authorized the investment of $50,000,000.00 into an investment as highly speculative and illiquid as a rare coin portfolio??
That would seem to me like a completely unsuitable investment for something like a state workers comp. investment portfolio considering what that money is supposed to be appropriated for.
Here is the latest Blade article. If you read it you will see that Ohio Governor Bob Taft has visited Tom Noe's Toledo area coinshop numerous times and that Taft was assured and believed that rare coins are a "safe" investment. What a buffoon Taft is. As an Ohio resident I am ashamed to have such as fool as my governor. He needs to resign ASAP.
COLUMBUS — Gov. Bob Taft, who initially defended the state’s $50 million investment in rare coins and personally supported Tom Noe, said yesterday that the Bureau of Workers’ Compensation had made a “bad decision” by investing with the “wrong person.”
“Mr. Noe has clearly deceived and betrayed many people at organizations and has irresponsibly managed the state’s moneys,” Mr. Taft said at a Statehouse news conference. “If he is guilty of criminal conduct, he should receive the most severe punishment possible under law.”
The governor also announced yesterday that the man in charge of the bureau, administrator/CEO James Conrad, was stepping down from his $150,696-a-year post after consistently backing the agency’s failed rare-coin investment. Mr. Conrad’s support did not waver even after his own internal auditor raised questions about a lack of safeguards in the funds. ALSO * Audit didn't locate $7M in inventory * Governor says scandals aren't part of problem * Property records indicate Noes planning move to Florida
Mr. Taft said Mr. Conrad’s decision to resign was “mutual.”
The governor said the bureau “failed to implement proper controls to safeguard this investment.”
State and federal authorities said Thursday they were pursuing criminal and civil charges against Mr. Noe for allegedly misappropriating $10 million to $12 million from the state’s rare-coin funds that he controlled.
A law enforcement source said this week’s searches at Mr. Noe’s coin shop in Monclova Township revealed records of questionable coin transactions, a law enforcement source said.
One of them involved a coin purchased for more than $100,000 that was later sold for less than a dollar.
Inspector General Tom Charles announced yesterday he is coordinating a task force to investigate the bureau’s rare-coin investment with Mr. Noe, along with allegations of wrongdoing by state employees.
And Secretary of State J. Kenneth Blackwell called on the Public Integrity Section of the U.S. Department of Justice to take control of the investigation into Mr. Noe’s alleged misappropriation.
“The Justice Department’s involvement will eliminate the potential of any conflicts of interest,” Mr. Blackwell said in a written statement. Mr. Conrad said his resignation would take effect June 3.
“The last thing I want to do is distract from the outstanding progress we have made together over the years,” Mr. Conrad said in a written statement.
Mr. Taft denied yesterday that Mr. Noe had ever “informed me or to my knowledge, any member of my senior staff “ about his state contract with the Ohio Bureau of Workers’ Compensation.
WHAT CONRAD TOLD THE BLADE James Conrad, administrator of the Bureau of Workers’ Compensation, said the following about Tom Noe and the state’s investment in rare coins during a 90-minute interview at The Blade on May 2:
• When asked about the bureau’s activities to verify the state’s investments:
“Last Friday, two inspectors from the Bureau of Workers’ Compensation came up and asked for a certain number of coins, verified that the coins [existed], that gives us a degree of comfort.… We just don’t sit back in Columbus and do nothing. “I think we told him [we were coming], but we didn’t tell him the list of coins we wanted to see.… [The bureau] selected a number of coins and asked at random for him to produce them.”
• When asked if the bureau had ordered a criminal background check of a Noe manager:
“Guess what, and I know you will find it a little hard to believe, I do certain things that I don’t issue press releases on and I do certain things for my fiduciary responsibility and when I testify in front of the inspector general, a lot of that’s going to come out.”
• When asked about the $850,000 that Capital Coin wrote off related to unpaid loans, bad debt, and failed coin deals orchestrated by Mark Chrans, the convicted felon who managed a fund for Mr. Noe:
“I was disturbed because we do not do business with felons.”
• When asked about the possibility of his resignation:
“Will I resign? No.”
In response to a question, Mr. Taft said he had visited Mr. Noe’s coin shop in Monclova Township, where authorities executed a search warrant Thursday.
The governor said he didn’t know how many times he had visited the coin shop and when asked why he went there, Mr. Taft replied: “Just a visit.” An aide to Mr. Taft said he didn’t have any dates of when Mr. Taft dropped by Vintage Coins & Collectibles.
Asked if he and his high-ranking staff members solicited Mr. Noe to raise campaign contributions for President Bush’s re-election and the Republican Governors Association, Mr. Taft replied: “I’m sure we did.”
“Mr. Noe at one time was chairman of the Lucas County Republican Party. He was a business leader in Toledo,” said Mr. Taft, who was chairman of the Republican Governors Association during President Bush’s re-election campaign.
Mr. Taft said “neither Mr. Conrad nor any member of his staff ever informed me about the bureau’s investment in rare coins.”
Mr. Taft said he didn’t learn about the state’s investment in rare coins until he read The Blade’s April 3 story. He said bureau officials then told him the investment was “not only profitable, but safe.”
Yesterday, Mr. Taft noted that Mr. Noe didn’t disclose his contract with the bureau to the Ohio Ethics Commission when he was appointed to the Ohio Board of Regents and the Ohio Turnpike Commission.
In fact, Mr. Noe didn’t file that disclosure with the Ethics Commission until after The Blade’s first story about the rare-coin investment.
Failure to file the disclosure is a first-degree misdemeanor punishable by six months in jail and/or a $1,000 fine.
Attorneys representing Mr. Noe surrendered his passport yesterday to the Franklin County prosecutor.
Mr. Noe’s attorneys didn’t return messages seeking comment. Franklin County Prosecutor Ron O’Brien said Mr. Noe’s attorneys have said he will cooperate with investigators and that could involve taking a polygraph test.
Former federal Judge William Bodoh announced yesterday that he had appointed Development Specialists, Inc., which has an office in Columbus, as the new general manager of the Capital Coin funds. The firm replaces Mr. Noe.
Attorney General Jim Petro chose Judge Bodoh on May 13 to be the independent third party charged with overseeing the withdrawal from the rare-coin fund.
The firm will work to divest the bureau’s assets “over a reasonable amount of time,” Judge Bodoh said.
Mr. Noe’s financial trouble deepened yesterday.
National City Bank, from which Mr. Noe borrowed $400,000 in November, 1997, for his business, Thomas Noe, Inc., went into court and essentially called for the balance of the loan, or more than $203,000, yesterday.
An attorney representing Mr. Noe did not contest the request. When the bank will be paid is unclear because the state has frozen all of Mr. Noe’s assets.
Yesterday, Judge David Cain of Franklin County Common Pleas Court approved the state’s request to bar Mr. Noe from transferring or selling any personal property in excess of $15,000 without the state’s consent or court approval.
“This order shall not impair the ability of the Noes to pay legal fees or reasonable and necessary living expenses, such as mortgage payments, utilities, groceries, and other such reasonable living requirements,” Judge Cain wrote.
Mr. Taft pledged the state would try to recoup the full value of the state’s investment in rare coins, cooperate with state and federal investigations, and work with lawmakers to “prohibit investments in this kind of commodity.”
Mr. Taft started the news conference in the governor’s ceremonial office at the Statehouse by saying the state started the rare-coin investment under Republican Gov. George Voinovich, now a U.S. senator, and it continued under the Taft administration.
“As governor, the Bureau of Workers’ Compensation reports to me, and therefore I accept responsibility for what has happened,” Mr. Taft said.
“I’m outraged. I’m angered. I’m saddened. And I’m sickened by what we learned yesterday from Mr. Noe’s attorneys with respect to up to $12 million of bureau investments in the Capital Coin funds being unaccounted for,” Mr. Taft said.
Mr. Taft also said yesterday he wanted to assure workers and employers that the workers’ compensation fund “remains strong and is in a position to meet present and future commitments to injured workers.”
That didn’t mollify several citizens who have dealt with the workers’ compensation system, especially a day after the bureau’s Oversight Commission voted to increase private employer premiums by an average of 4.4 percent starting July 1.
Harold Fitzgerald, a 57-year-old Columbus resident who said he suffered a workplace injury in 1987, said he suspects that both Mr. Taft and Mr. Conrad were aware of the “sweetheart deal” with Mr. Noe.
“This is how bureaucrats cover themselves,” he said.
Mr. Taft said he will work with House and Senate leaders on proposals to “eliminate the possibility that what happened in this instance will ever happen again.”
On Thursday, Senate Republican leaders announced several “reform provisions” that they intend to insert into the state operating budget bill.
They include prohibiting the bureau from investing in unregulated investments such as coins, artwork, horses, jewelry, gems, stamps, antiques, artifacts, collectibles, and other memorabilia.
Ohio Democrats, emboldened by the scandal that they say has cast a shadow over the state’s Republican leadership, held a news conference at the Statehouse immediately following the governor’s appearance.
Democrats presented a twelve-point “Coingate: Action List” yesterday morning. They called on Republicans to take a number of actions, including returning contributions from the Noes to the bureau; recusing themselves from the investigation and allowing a third party to investigate, and determining whether any elected officials committed wrongdoing associated with the coin scandal.
“I believe Tom Noe is the little minnow in the pond,” State Sen. Teresa Fedor (D., Toledo) said.
“There are much bigger fish, and we need to get to the bottom of this.”
State Sen. Marc Dann, a Democrat from suburban Youngstown, called for Mr. Charles to receive additional tools to investigate the coin scandal.
He called Mr. Charles and The Blade, because of its reporting, the only “heroes” in this controversy.
“When [Mr. Charles] finally got a chance to take a look at what was in Noe’s office, he picked up the phone and called the police,” Mr. Dann said.
Mr. Dann said Mr. Taft, Mr. Petro, and Auditor Betty Montgomery were absent in their duties to Ohio residents. He said the scandal has now shifted from “pay-to-play “ to “pay-to-steal.”
“We’ve gotten to the point where the leaders of our state don’t even know it is wrong,” he said. “They put their loyalty to their contributors ahead of the state of Ohio.”
Mr. Petro, who is seeking the GOP nomination for governor in 2006, would not talk to The Blade yesterday.
His spokesman, Kim Norris, said Mr. Petro is consulting with the Ohio Elections Commission about how to return $6,100 in campaign contributions from Mr. Noe over 11 years, possibly to the workers’ compensation fund.
Shortly after The Blade’s first story on the rare-coin investment, state Sen. Randy Gardner (R., Bowling Green) said: “Do the Democrats have evidence that money was lost? Is there any evidence of political favoritism? Have there been any funds lost? What has been the track record? These are all questions. They’re fair to ask. I’m not sure we have answers to all of them.”
Yesterday, Mr. Gardner said that the only charges left to be proven are those made by Democrats of political favoritism by the GOP in choosing Mr. Noe.
“I think there were clearly mistakes made and bad judgments made with this investment. Both Republicans and Democrats approved this investment. In terms of choosing unwise investment policies, there is bipartisan blame to go around, and I hope the solution can be a bipartisan solution,” he said.
Democrats in Washington shared the same disbelief as the Ohio politicians.
Josh Earnest, a spokesman for the Democratic National Committee, called on President Bush to return all of the money that Tom Noe has raised for him.
“In Republican circles, access to high dollar donors is the coin of the realm, “ Mr. Earnest said.
Blade Staff Writers Steve Eder and Christopher D. Kirkpatrick contributed to this report.
Contact James Drew at:jdrew@theblade.com or 614-221-0496.
I'm not sure why there would be such a suspicious transaction on the books. It's real simple to skim profit out of such a fund and to make it more difficult to catch than that. Just send in a ton of coins for upgrade and those that upgrade you sell off to a second company at a slight profit on invoices dated before they were sent in to the grading service.
The fund realizes a small profit and your secondary company reaps all the benefit of the upgrades.... the big bucks.
Coingate is big national news. It is in Saturday's New York Times......above the fold. Their "spin" deals with the political fallout more than the economic impact. Of course they love the fact that Mr. Noe is/was a large contributor/fund raiser for President Bush. Chris
Comments
<< <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.........
Hey Chris, You want to come over and go with me to a Sheriff's sale????
edited to add.... It's only a mile or so away from me!
<< <i>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. >>
Kranky, perhaps the attorney did say more, but it was not reported/included. While I have no knowledge that such was the case, it certainly wouldn't surprise me if it were so.
.......................in a word, politics!!!!!!!! take that to the bank, but it's a heavy load, so you might need that gold-tipped walking cane.
Politics or fraud.....or both? I'd rather see Politicians detect fraud as they apparently have. Doesn't one go hand in hand with the other?? CD
<< <i>That kind of wipes out most of the "profit" they were touting.
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. >>
See above post
i'm not convinced that politicians detected anything. more likely there were those coins missing and a private individual blew the whistle because it was his loss and the pols started to hunker down into survival mode. Gov. Taft of the Great State of Ohio leaves much to be desired as do many of the members of his cabinet. the house of cards begins to fall as his opponents prepare to make hay.
<< <i>I'd rather see Politicians detect fraud as they apparently have.
i'm not convinced that politicians detected anything. more likely there were those coins missing and a private individual blew the whistle because it was his loss and the pols started to hunker down into survival mode. Gov. Taft of the Great State of Ohio leaves much to be desired as do many of the members of his cabinet. the house of cards begins to fall as his opponents prepare to make hay. >>
Where did you come up with that one??? LOLOL
<< <i>it would seem that theft of funds wouldn't negate the fact that the fund was profitable. >>
Unless the "profit" was created out of the states own money by the companies Noe created buying and selling the same coins back and forth between each other. Until the coins are liquidated it won't be possible to say if any real profits were realized or not.
Member ANA, SPMC, SCNA, FUN, CONECA
<< <i>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, with all due respect, this situation smells extremely ugly. My bet is that "negligence" is much too kind a word here to characterize the situation. Criminal fraud, embezzlement, and larceny driven by unfettered arrogance and greed will likely be the correct analysis. And no, I do not say this out of any political motivation at all. Just a sad acknowledgement of human nature. "Innocent until proven guilty" is an important cornerstone of any civilized criminal justice system, but that didn't absolve O.J. Simpson in the court of public opinion. We are entitled to have opinions, regardless of the principles of the dosctrinal justice. And my opinion is that Mr. Noe smells worse than Limburger cheese.
Anyone who doesn't think this is bad for the rare coin business is mistaken. Investment funds and portfolios have played a major role in the stellar rise of high-end rarities in the last three years.
Best,
Sunnywood
Sunnywood's Rainbow-Toned Morgans (Retired)
Sunnywood's Barber Quarters (Retired)
<< <i>Mark, with all due respect, this situation smells extremely ugly. >>
Sunnywood, (Bill and others who have addressed me in this thread ) - I agree that this situation sounds "extremely ugly", to say the least.
One of the main points I was trying to make, was that people have been quite easy on Numispro/the originator of this thread (who has been accused of a number of wrong doings himself regarding his involvement with the fund), while at the same time, coming down very hard on Tom Noe.
Perhaps it's because the accusations against Tom Noe are newer and thus fresher in posters' minds, but there seems to be somewhat of a double standard taking place.
Sunnywood's Rainbow-Toned Morgans (Retired)
Sunnywood's Barber Quarters (Retired)
Nevertheless the situation whereby a speculative vehicle is used to buy products of questionable liquidity and subjective valuation is one of possible concern. This rarely happens in the beginning of a valuation cycle and sometimes is the trigger for a broader reassessment of valuation in the marketplace.
I am not sure if the comments suggesting that questionable and perhaps illegal management practices are OK if the venture is profitable were said tongue in cheek; I hope so.
I would say that I do not know anything about anything or anyone in this affair. Seeing it unfold is like watch a train wreck in slow motion. I predict that the story will captivate the numismatic audience for some time to come. While I hope things work out as best they possibly can for all parties involved, at this point I am quite skeptical that will be the case.
$1.85M for the house! It's good to be the king...
Ironic too that Mr. Noe came from the roots of that same company listed earlier that eventually was sold and turned very sour in the mid 1980's. I can still remember one of their sales reps coming to my house in 1984-85 to show me "real" gem proof type coins. He didn't stay long after I saw the cleaned junk he was peddling. Not to defend these guys, but MANY major dealers at that time were also selling cleaned junk for gem 65 prices. A number of them are at the top of the coin world today claiming how righteous they are. Back then, they just didn't do it often enough to get nailed by the Feds.
I would concur with Bill Jones that any good coin dealer could have easily generated an impressive gain on $50 million from 1998....and far far better than $10-15 Million. That money could have easily been doubled in that time frame. Being PNG doesn't necessarily guarantee anything, just as in life in general. There are dozens of top notch pro's out there that for 1%/year ($500K) could have turned eye opening profits with that fund from 1998-2003 without cooking any books. $15 mill proft? That's pretty poor when you're paying pros $3 million or more in fees to run it! It's just unfortunate that at times our hobby does tend to invite people to act other than in their client's best interests. And that's a claim I level against the majority of the dealers in today's hobby. You know, buying across the counter at 5 to 30 cents on the dollar. Or selling overgraded coins at multiples of what they paid. They look out for themselves first and the client second. Unfortunately it has always been that way. And that's not unlike how the regular financial investment world works.
I've always said that if you found an honest auto mechanic, or car dealer, or a totally honest coin dealer, that the world will beat a path to your doorstep. Well I found that honest mechanic in 1991 after 15 years of looking. Have not found a 2nd one since. The coin and car dealers? Hmmm...........
roadrunner
Sunnywood
Sunnywood's Rainbow-Toned Morgans (Retired)
Sunnywood's Barber Quarters (Retired)
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
And as far as people going to Jail for misdeeds as discussed already....no one from CT has been found at fault to date for the $220 Million Enron deal. Not the former governor or anyone on his staff nor anyone connected with the CRRA. I hope Ohio has better luck with their investigation. The bigger the deal, the tougher to get to the bottom of it.
roadrunner
Sunnywood
Sunnywood's Rainbow-Toned Morgans (Retired)
Sunnywood's Barber Quarters (Retired)
<< <i>Anyone who doesn't think this is bad for the rare coin business is mistaken. Investment funds and portfolios have played a major role in the stellar rise of high-end rarities in the last three years. >>
We should all be happy. These "funds" just drive up prices and take the nicer coins away from collectors. Thier "gain" is our loss. Who needs them?? Where do you think thier "profits" come from.......from the pocket of the collector. It's just one more set of parasites the hobby doesn't need.
Coins for collectors.......all others.......get out.
<< <i>Coins for collectors.......all others.......get out. >>
I love that !!!!!!!!!
Sunnywood's Rainbow-Toned Morgans (Retired)
Sunnywood's Barber Quarters (Retired)
That would seem to me like a completely unsuitable investment for something like a state workers comp. investment portfolio considering what that money is supposed to be appropriated for.
Here is the latest Blade article. If you read it you will see that Ohio Governor Bob Taft has visited Tom Noe's Toledo area coinshop numerous times and that Taft was assured and believed that rare coins are a "safe" investment. What a buffoon Taft is. As an Ohio resident I am ashamed to have such as fool as my governor. He needs to resign ASAP.
COLUMBUS — Gov. Bob Taft, who initially defended the state’s $50 million investment in rare coins and personally supported Tom Noe, said yesterday that the Bureau of Workers’ Compensation had made a “bad decision” by investing with the “wrong person.”
“Mr. Noe has clearly deceived and betrayed many people at organizations and has irresponsibly managed the state’s moneys,” Mr. Taft said at a Statehouse news conference. “If he is guilty of criminal conduct, he should receive the most severe punishment possible under law.”
The governor also announced yesterday that the man in charge of the bureau, administrator/CEO James Conrad, was stepping down from his $150,696-a-year post after consistently backing the agency’s failed rare-coin investment. Mr. Conrad’s support did not waver even after his own internal auditor raised questions about a lack of safeguards in the funds.
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Mr. Taft said Mr. Conrad’s decision to resign was “mutual.”
The governor said the bureau “failed to implement proper controls to safeguard this investment.”
State and federal authorities said Thursday they were pursuing criminal and civil charges against Mr. Noe for allegedly misappropriating $10 million to $12 million from the state’s rare-coin funds that he controlled.
A law enforcement source said this week’s searches at Mr. Noe’s coin shop in Monclova Township revealed records of questionable coin transactions, a law enforcement source said.
One of them involved a coin purchased for more than $100,000 that was later sold for less than a dollar.
Inspector General Tom Charles announced yesterday he is coordinating a task force to investigate the bureau’s rare-coin investment with Mr. Noe, along with allegations of wrongdoing by state employees.
And Secretary of State J. Kenneth Blackwell called on the Public Integrity Section of the U.S. Department of Justice to take control of the investigation into Mr. Noe’s alleged misappropriation.
“The Justice Department’s involvement will eliminate the potential of any conflicts of interest,” Mr. Blackwell said in a written statement.
Mr. Conrad said his resignation would take effect June 3.
“The last thing I want to do is distract from the outstanding progress we have made together over the years,” Mr. Conrad said in a written statement.
Mr. Taft denied yesterday that Mr. Noe had ever “informed me or to my knowledge, any member of my senior staff “ about his state contract with the Ohio Bureau of Workers’ Compensation.
WHAT CONRAD TOLD THE BLADE
James Conrad, administrator of the Bureau of Workers’ Compensation, said the following about Tom Noe and the state’s investment in rare coins during a 90-minute interview at The Blade on May 2:
• When asked about the bureau’s activities to verify the state’s investments:
“Last Friday, two inspectors from the Bureau of Workers’ Compensation came up and asked for a
certain number of coins, verified that the coins [existed], that gives us a degree of comfort.… We just don’t sit back in Columbus and do nothing. “I think we told him [we were coming], but we didn’t tell him the list of coins we wanted to see.… [The bureau] selected
a number of coins and asked at random for him to produce them.”
• When asked if the bureau had ordered a criminal background check of a Noe manager:
“Guess what, and I know you will find it a little hard to believe, I do certain things that I don’t issue press releases on and I do certain things for my fiduciary
responsibility and when I testify in front of the inspector general, a lot of that’s going to come out.”
• When asked about the $850,000 that Capital Coin wrote off related to unpaid loans, bad debt, and failed coin deals orchestrated by Mark Chrans, the
convicted felon who managed a fund for Mr. Noe:
“I was disturbed because we do not do business with felons.”
• When asked about the possibility of his resignation:
“Will I resign? No.”
In response to a question, Mr. Taft said he had visited Mr. Noe’s coin shop in Monclova Township, where authorities executed a search warrant Thursday.
The governor said he didn’t know how many times he had visited the coin shop and when asked why he went there, Mr. Taft replied: “Just a visit.” An aide to Mr. Taft said he didn’t have any dates of when Mr. Taft dropped by Vintage Coins & Collectibles.
Asked if he and his high-ranking staff members solicited Mr. Noe to raise campaign contributions for President Bush’s re-election and the Republican Governors Association, Mr. Taft replied: “I’m sure we did.”
“Mr. Noe at one time was chairman of the Lucas County Republican Party. He was a business leader in Toledo,” said Mr. Taft, who was chairman of the Republican Governors Association during President Bush’s re-election campaign.
Mr. Taft said “neither Mr. Conrad nor any member of his staff ever informed me about the bureau’s investment in rare coins.”
Mr. Taft said he didn’t learn about the state’s investment in rare coins until he read The Blade’s April 3 story. He said bureau officials then told him the investment was “not only profitable, but safe.”
Yesterday, Mr. Taft noted that Mr. Noe didn’t disclose his contract with the bureau to the Ohio Ethics Commission when he was appointed to the Ohio Board of Regents and the Ohio Turnpike Commission.
In fact, Mr. Noe didn’t file that disclosure with the Ethics Commission until after The Blade’s first story about the rare-coin investment.
Failure to file the disclosure is a first-degree misdemeanor punishable by six months in jail and/or a $1,000 fine.
Attorneys representing Mr. Noe surrendered his passport yesterday to the Franklin County prosecutor.
Mr. Noe’s attorneys didn’t return messages seeking comment.
Franklin County Prosecutor Ron O’Brien said Mr. Noe’s attorneys have said he will cooperate with investigators and that could involve taking a polygraph test.
Former federal Judge William Bodoh announced yesterday that he had appointed Development Specialists, Inc., which has an office in Columbus, as the new general manager of the Capital Coin funds. The firm replaces Mr. Noe.
Attorney General Jim Petro chose Judge Bodoh on May 13 to be the independent third party charged with overseeing the withdrawal from the rare-coin fund.
The firm will work to divest the bureau’s assets “over a reasonable amount of time,” Judge Bodoh said.
Mr. Noe’s financial trouble deepened yesterday.
National City Bank, from which Mr. Noe borrowed $400,000 in November, 1997, for his business, Thomas Noe, Inc., went into court and essentially called for the balance of the loan, or more than $203,000, yesterday.
An attorney representing Mr. Noe did not contest the request.
When the bank will be paid is unclear because the state has frozen all of Mr. Noe’s assets.
Yesterday, Judge David Cain of Franklin County Common Pleas Court approved the state’s request to bar Mr. Noe from transferring or selling any personal property in excess of $15,000 without the state’s consent or court approval.
“This order shall not impair the ability of the Noes to pay legal fees or reasonable and necessary living expenses, such as mortgage payments, utilities, groceries, and other such reasonable living requirements,” Judge Cain wrote.
Mr. Taft pledged the state would try to recoup the full value of the state’s investment in rare coins, cooperate with state and federal investigations, and work with lawmakers to “prohibit investments in this kind of commodity.”
Mr. Taft started the news conference in the governor’s ceremonial office at the Statehouse by saying the state started the rare-coin investment under Republican Gov. George Voinovich, now a U.S. senator, and it continued under the Taft administration.
“As governor, the Bureau of Workers’ Compensation reports to me, and therefore I accept responsibility for what has happened,” Mr. Taft said.
“I’m outraged. I’m angered. I’m saddened. And I’m sickened by what we learned yesterday from Mr. Noe’s attorneys with respect to up to $12 million of bureau investments in the Capital Coin funds being unaccounted for,” Mr. Taft said.
Mr. Taft also said yesterday he wanted to assure workers and employers that the workers’ compensation fund “remains strong and is in a position to meet present and future commitments to injured workers.”
That didn’t mollify several citizens who have dealt with the workers’ compensation system, especially a day after the bureau’s Oversight Commission voted to increase private employer premiums by an average of 4.4 percent starting July 1.
Harold Fitzgerald, a 57-year-old Columbus resident who said he suffered a workplace injury in 1987, said he suspects that both Mr. Taft and Mr. Conrad were aware of the “sweetheart deal” with Mr. Noe.
“This is how bureaucrats cover themselves,” he said.
Mr. Taft said he will work with House and Senate leaders on proposals to “eliminate the possibility that what happened in this instance will ever happen again.”
On Thursday, Senate Republican leaders announced several “reform provisions” that they intend to insert into the state operating budget bill.
They include prohibiting the bureau from investing in unregulated investments such as coins, artwork, horses, jewelry, gems, stamps, antiques, artifacts, collectibles, and other memorabilia.
Ohio Democrats, emboldened by the scandal that they say has cast a shadow over the state’s Republican leadership, held a news conference at the Statehouse immediately following the governor’s appearance.
Democrats presented a twelve-point “Coingate: Action List” yesterday morning. They called on Republicans to take a number of actions, including returning contributions from the Noes to the bureau; recusing themselves from the investigation and allowing a third party to investigate, and determining whether any elected officials committed wrongdoing associated with the coin scandal.
“I believe Tom Noe is the little minnow in the pond,” State Sen. Teresa Fedor (D., Toledo) said.
“There are much bigger fish, and we need to get to the bottom of this.”
State Sen. Marc Dann, a Democrat from suburban Youngstown, called for Mr. Charles to receive additional tools to investigate the coin scandal.
He called Mr. Charles and The Blade, because of its reporting, the only “heroes” in this controversy.
“When [Mr. Charles] finally got a chance to take a look at what was in Noe’s office, he picked up the phone and called the police,” Mr. Dann said.
Mr. Dann said Mr. Taft, Mr. Petro, and Auditor Betty Montgomery were absent in their duties to Ohio residents. He said the scandal has now shifted from “pay-to-play “ to “pay-to-steal.”
“We’ve gotten to the point where the leaders of our state don’t even know it is wrong,” he said. “They put their loyalty to their contributors ahead of the state of Ohio.”
Mr. Petro, who is seeking the GOP nomination for governor in 2006, would not talk to The Blade yesterday.
His spokesman, Kim Norris, said Mr. Petro is consulting with the Ohio Elections Commission about how to return $6,100 in campaign contributions from Mr. Noe over 11 years, possibly to the workers’ compensation fund.
Shortly after The Blade’s first story on the rare-coin investment, state Sen. Randy Gardner (R., Bowling Green) said: “Do the Democrats have evidence that money was lost? Is there any evidence of political favoritism? Have there been any funds lost? What has been the track record? These are all questions. They’re fair to ask. I’m not sure we have answers to all of them.”
Yesterday, Mr. Gardner said that the only charges left to be proven are those made by Democrats of political favoritism by the GOP in choosing Mr. Noe.
“I think there were clearly mistakes made and bad judgments made with this investment. Both Republicans and Democrats approved this investment. In terms of choosing unwise investment policies, there is bipartisan blame to go around, and I hope the solution can be a bipartisan solution,” he said.
Democrats in Washington shared the same disbelief as the Ohio politicians.
Josh Earnest, a spokesman for the Democratic National Committee, called on President Bush to return all of the money that Tom Noe has raised for him.
“In Republican circles, access to high dollar donors is the coin of the realm, “ Mr. Earnest said.
Blade Staff Writers Steve Eder and Christopher D. Kirkpatrick contributed to this report.
Contact James Drew at:jdrew@theblade.com or 614-221-0496.
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Uhh ohh, not another 1963 PCGS PF70 cent downgraded to "pocket change."
And now that this story showed up in Connecticut's Hartford Courant...you know this is national news.
roadrunner
like a giant evil smelling infected painful puss filled boil but a purpasely created boil
please see my post on the thread about this same subject on ngccoin numismatic tangent section for a further eye opening opinion
I'm not sure why there would be such a suspicious transaction on the books. It's real simple to skim profit out of such a fund and to make it more difficult to catch than that. Just send in a ton of coins for upgrade and those that upgrade you sell off to a second company at a slight profit on invoices dated before they were sent in to the grading service.
The fund realizes a small profit and your secondary company reaps all the benefit of the upgrades.... the big bucks.