Ohio politician calls for investigation of Thomas Noe transactions
By PATRICK CROWLEY
6/15/2005

An Ohio state senator is seeking an investigation of a rare coin dealer that she claims may have used state funds to make mortgages without a license.

The senator has asked the Ohio Department of Commerce to investigate if coin dealer Tom Noe, who was already under investigation after as much as $12 million in coins the state invested in turned up missing, broke mortgage lending laws by acting as a broker without a license.

In a letter to Commerce Director Doug White, Sen. Teresa Fedor, a Toledo Democrat, questioned if Noe loaned state money secured by mortgages to a residential real estate developer.

Fedor said the Ohio Bureau of Workers' Compensation, which invested $55 million in rare coins bought from Noe, may also have illegally acted as a mortgage broker by not sufficiently securing the mortgages.

"This information raises more questions than it answers," Fedor wrote in her letter, which her statehouse staff provided to MortgageDaily.com.

"Does this mean Mr. Noe was performing the services of a mortgage broker?" she asked. "Was (the Bureau of Workers Compensation) acting as a mortgage broker? Were either required to obtain a license from the Department of Commerce?"

The Commerce Department is not commenting because under the Ohio Mortgage Broker Act it cannot confirm or deny investigations. Noe could not be reached to comment.

Fedor said state law prohibits brokers from engaging "in conduct that constitutes improper, fraudulent or dishonest dealings" and that anyone who assists "a buyer in obtaining a mortgage and charges or receives from either the buyer or lender money or other valuable consideration" must be licensed.

"Were these mortgages, in fact, sufficiently secured?" Fedor said. "Did Mr. Noe or (the bureau) engage in 'improper, fraudulent or dishonest dealings' in violation of Ohio law?

"These are serious questions to which Ohio taxpayers deserve answers," she said.

The loans were made to a controversial developer named John Ulmer, who reportedly buys homes in low-income Toledo neighborhoods and them sells that at above-average interest rates.

"Mr. Ulmer has allegedly engaged in practices some consider 'predatory lending', which may include violations of the Mortgage Broker Act," Fedor said. "If this is true, would Mr. Noe be liable for alleged violations of Ohio law by Mr. Ulmer?

"For how much money would Ohio taxpayers potentially be liable as a result?"

Ulmer could not be reached to comment.

Noe is a Republican Party official in Lucas County who has made political contributors to Ohio Gov. Robert Taft, a Republican, and other GOP elected officials.

The Ohio Attorney General has announced it is conducting a criminal and civil investigation into Noe and the missing coins.

"Tom Noe has irresponsibly mismanaged the monies of the state of Ohio," Taft said in a statement. "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 solvent and strong."

The U.S. Attorney's office as well as local prosecutors and other state agencies are also investigating.

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