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Coins Noe sold state possibly overvalued

Investigators think dealer used scheme to inflate sale prices

Friday, June 03, 2005

Mark Niquette





Thomas W. Noe might have bought coins that he then sold to the state at a higher price after having them revalued, sources close to a state and federal investigation told The Dispatch.


The working theory among investigators is that Noe bought coins with his own money, sent them to a company to get a higher "grade," and then used state money to buy the same coins at the higher grade, the sources said.


That means the Ohio Bureau of Workers’ Compensation, which since 1998 has given the Toledo-area coin dealer $50 million to manage, might hold coins that are worth much less than what the state paid for them, the sources said.


Noe’s attorneys have acknowledged a shortfall of up to $13 million, but have declined to discuss reasons for the gap.


"The only people with whom Mr. Noe might be willing to discuss the valuation shortfall are the government investigators," Noe attorney William C. Wilkinson said.


Spokesmen for entities investigating Noe and the controversial state coin investment said they still are examining records and haven’t reached any conclusions. A special audit is being completed, and the assets are being liquidated to recover the state’s investment.


Bureau records show that Noe and a partner bought $2.8 million in stock using bureau money in 2000 in the privately held coin-grading company Numismatic Guaranty Corp. in Florida.


The 2004 inventory of the state’s coin holdings shows that the company graded about 80 percent of the more than 300 coins that had a purchase price of $10,000 or more and went through a grading service.


In 1999, Noe used $250,000 in state funds to buy stock in Collectors Universe, which owns Professional Coin Grading Service in California, records show.


Both are major coin-grading companies that evaluate the physical condition of individual coins and assign a grade, which helps determine the sale price.


Bureau spokesman Jeremy Jackson couldn’t confirm yesterday what specific holdings remain but said that, to the best of the bureau’s knowledge, the state has $3 million invested in one or both coin-grading companies.


Wilkinson said discussions are under way to sell the stock at a price that would recover the state’s investment.


Officials at neither company could be reached yesterday, but Robert Brueggeman, executive director of the Professional Numismatic Guild, said the grading is supposed to be done "blindly."


Coins are to be numbered when they are received and all other identification is removed, so graders evaluate coins without knowing who owns them, Brueggeman said.


He also noted that both companies are rated at the top of the guild’s survey of dealers based on consistency and integrity.


"I don’t think that having a part ownership has any influence whatsoever," he said.


Meanwhile, the Bush-Cheney campaign and the National Committee announced yesterday they would follow the lead of Ohio GOP politicians and return contributions made by Noe and his wife, Bernadette.


Aaron McLear, RNC spokesman, said $6,000 worth of "direct contributions" from the Noes during the 2004 presidential election cycle would be donated to "an appropriate charity."


The Noes each gave the Bush-Cheney campaign $2,000 in September 2003 and Mr. Noe donated $2,000 to the RNC this past August. Thomas Noe also gave $2,000 to Bush in 1999 that apparently won’t be surrendered.


Noe, who became one of 19 Ohio "Pioneers" by raising at least $100,000 for the Bush-Cheney campaign, is being investigated by a Lucas County grand jury for allegedly using surrogates to funnel money to the campaign illegally at an October 2003 fundraiser in Columbus headlined by Bush.


McLear held open the prospect that more Noe money could be returned, saying, "At this point, all the other donations appear to be completely appropriate, but . . . we’ll take further action if the situation necessitates it."


Dispatch Senior Editor Joe Hallett contributed to this report.

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Noe didnt do very well on his stock purchase either.


CLCT was trading between 25 and 35 in 1999. Now it is 15.

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Noe didnt do very well on his stock purchase either.


CLCT was trading between 25 and 35 in 1999. Now it is 15.


Does that take into account the 5-for-1(?) reverse split?

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4:1 reverse split.


Yes, his numbers take that into account. The IPO was at $6 per share [$24 post reverse split] and for a few months the stock was up at $7-9 [$28-36] before dropping.

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