GOP Money-laundering Investigation in Ohio

[Moses]

Former whiz kid coin dealer surfaces in Ohio investigation
By SARAH ANTONACCI
STAFF WRITER

A former Springfield man, considered in the early 1980s to be a “boy genius” coin dealer and later convicted of money laundering, now faces scrutiny in Ohio.

Mark Chrans, now 41, dropped out of Lanphier High School in the 10th grade to start his own coin dealership - Mark Chrans Coin Shop in Fairhills Mall - because he was making more than $1,000 a week.....

The attention Chrans got spread much farther than his hometown newspaper. Chrans went on to be featured in the National Enquirer and People magazine, on NBC’s “Today” show and another television show popular at the time, “That’s Incredible.”

When Chrans was 11, his mother bought him an $8.95 coin collector starter kit from Sears. He took the kit and some coins from his grandma’s change collection and started to deal. He studied coin books and was able to sell the coins for more than he paid for them.

At age 18, in 1982, Chrans grossed $2.5 million and put $6,000 a week into his pocket, according to a Time Magazine brief.

Now, Chrans is making news of another sort.

According to a series of stories in the Toledo Blade newspaper, Chrans was hired seven years ago by a well-connected Ohio Republican, Tom Noe, to help invest Ohio Bureau of Worker’s Compensation money in the coin market.

Since 1998, the newspaper said, the bureau has given $50 million to two rare-coin funds managed by Noe, who then set up subsidiaries and hired other dealers, including Chrans. Noe then funded those subsidiaries with money received from the state.

Chrans was paid $25,000 a month for his services. But the fund had to write off more than $850,000 over the past three years from the fund Chrans managed, including money from an unpaid loan from Capital Coin, Noe’s company, to Chrans and more than $335,000 in advances to Chrans.

Chrans has not been involved in the coin investment fund for several years, Noe told the Toledo newspaper.

This week, the FBI reportedly searched Noe’s house. The agency apparently is investigating whether Noe violated campaign contribution laws by giving money to friends to donate to President Bush’s campaign in an effort to circumvent the federal contribution limits. Noe served as Bush’s campaign chairman in northwest Ohio. [Note: the congressman who represents NW Ohio (sans Toledo) voted against changing back the ethics rules in the house-- that is, he was against ethics rules and in favor of protecting crooks, like Tom Delay, who is up to his eyeballs in money-laundering schemes, along w/ Abramoff and protoge Grover Norquist]

And the state’s inspector general is investigating the rare-coin fund Noe managed.

The Blade reported last week that Noe hired Chrans without ever doing a background check. Noe claims he never knew Chrans had a felony conviction for faking a coin transaction to cover up drug money.

That conviction happened in Springfield in 1986.

Chrans was only 21 when he was indicted for laundering drug profits through his coin store. He pleaded guilty to fraud and perjury.

State Journal-Register records indicate Chrans had nothing to do with the sale or delivery of the drugs. However, he did alter business records to indicate that $30,000 in drug money came from a rare coin transaction and then accepted $3,000 from the drug dealer in return for faking the records. Later, he lied to a grand jury about his participation in the scheme.

Chrans spent less than a year in jail.

Up to that point, though, Chrans lived the high life.

(more at link)

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Sarah Antonacci can be reached at 788-1529 or [e-mail]. The Associated Press contributed to this story.

[Moses]

June 17, 2005

What's the Matter With Ohio?
By PAUL KRUGMAN

The Toledo Blade's reports on Coingate - the unfolding tale of how Ohio's Bureau of Workers' Compensation misused funds - deserve much more national attention than they have received so far. For one thing, it's an entertaining story that seems to get weirder by the week. More important, it's an object lesson in what happens when you have one-party rule untrammeled by any quaint notions of independent oversight.

In April, The Blade reported that the bureau, which provides financial support for workers injured on the job, had invested $50 million in Capital Coin, a rare-coin trading operation run by Tom Noe, an influential Republican fund-raiser.

At first, state officials angrily insisted that this unusual use of state funds was a good investment that had nothing to do with Mr. Noe's political connections. An accounting investigation revealed, however, that Mr. Noe's claims to be running a profitable business were fictitious: he had lost millions, and 121 valuable coins were missing.

On June 3, police raided the Colorado home of Michael Storeim, Mr. Noe's business associate, and seized hundreds of rare coins. After changing the locks, they left 3,500 bottles of wine, valued at several hundred thousand dollars, in the home's basement.

On Monday, Mr. Storeim told police that someone had broken into his house over the weekend and stolen much of the wine, along with artwork, guns, jewelry and cars. [Valued at over $500,000] As I said, this story keeps getting weirder.

Meanwhile, The Blade uncovered an even bigger story: the Bureau of Workers' Compensation invested $225 million in a hedge fund managed by MDL Capital, whose chairman had strong political connections. When this investment started to go sour, the bureau's chief financial officer told another top agency official that he had been told to "give MDL a break."

By October 2004, state officials knew that MDL had lost almost the entire investment, but they kept the loss hidden until this month.

How could such things happen? The answer, it has become clear, lies in a web of financial connections between state officials and the businessmen who got to play with state funds.

We're not just talking about campaign contributions, although Mr. Noe's contributions ranged so widely that five of the state's seven Supreme Court justices had to recuse themselves from cases associated with the scandal. (He's also under suspicion of using intermediaries to contribute large sums, illegally, to the Bush campaign.) We're talking about personal payoffs: bargain vacations for the governor's chief of staff at Mr. Noe's Florida home, the fact that MDL Capital employs the daughter of one of the members of the workers' compensation oversight board, and more.

Now, politicians and businessmen are always in a position to do each other lucrative favors. Government is relatively clean when politicians are sufficiently afraid of scandal to resist temptation. But when a political machine controls all branches of government, and those officials charged with oversight are also reliably partisan, politicians feel safe from investigation. Their inhibitions dissolve, and they take full advantage of their position, until the scandals become too big to hide.

In other words, Ohio's state government today is a lot like Boss Tweed's New York. Unfortunately, a lot of other state governments look similar - and so does Washington.

Since their 1994 takeover of Congress, and even more so since the 2000 election, Republican leaders have sought to make their political dominance permanent. They redistricted Texas to lock in their control of the House. Through the "K Street Project" they have put lobbying firms under partisan control, starving the Democrats of campaign funds. And they are, of course, trying to pack the courts with partisan loyalists.

In effect, they're trying to turn America into a giant version of the elder Richard Daley's Chicago.

These efforts have already created an environment in which politicians from the right party and businessmen with the right connections believe, with good reason, that they have immunity.

And politicians who feel that they can exploit their position tend to do just that. It's a likely bet that the scandals we already know about, from Coingate to Tom DeLay's dealings with the lobbyist Jack Abramoff, are just the tip of the iceberg.

The message from Ohio is that long-term dominance by a political machine leads to corruption, regardless of the policies that machine follows or the ideology it claims to represent.

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