Posted by Stygian (Ranked 7 on Monopoly (Games.com) Ladder) on July 28, 2005 at 12:55:19:
Investor sunk $100K in Cincy firm
Coin dealer put state money in Ach's Games Inc.
By Jon Craig
Enquirer Columbus Bureau
Coin dealer Thomas Noe
COLUMBUS - Embattled coin dealer Thomas Noe invested at least $100,000 in state workers' compensation money with Games Inc., a struggling Internet gaming venture based in Cincinnati.
The company reported business losses of about $2 million earlier this year before losing a $5 million lawsuit with Atari this month.
Noe bought 440,000 shares of Games Inc. for himself as well as 207,075 shares using state workers' compensation fund money that was to be invested in rare coins that Noe managed. The stock was bought between January 2003 and August 2004, according to federal Securities and Exchange Commission records.
The price fluctuated between $2 a share and 46 cents during that time. Games Inc. stock was being offered for 9 cents a share Wednesday.
In a lawsuit against Noe, Attorney General Jim Petro has accused him of stealing $4 million in state investments. Noe's lawyer has acknowledged that at least one-fifth of the state's $50 million investment in Noe's rare-coin funds has been lost but denies any theft.
Petro thinks Noe commingled state workers' compensation money with his personal assets.
The attorney general has moved to freeze the assets and halt any further sales of homes, boats and cars owned by Noe and his wife, Bernadette. Noe's lawyer, William Wilkinson, has denied Petro's claims. He could not be reached for comment Wednesday.
Noe is the target of multiple state and federal investigations, including concealing campaign contributions to President Bush.
Games president and chief utive officer Roger W. Ach II of East Walnut Hills, a major campaign contributor to state and federal candidates, including his childhood friend, Gov. Bob Taft, released a letter Wednesday saying he is unaware of any improperly invested money in Games Inc., but if any is identified, it will be returned to "the proper owner."
Rare coins specified
Noe's contracts with the Ohio Bureau of Workers' Compensation specify that most of the initial $50 million in investments be made in rare coins. Ongoing investigations have found that Noe lost or misspent the money in a variety of ways. Petro said his forensic accountant thinks the coin funds never made a profit.
Ach's financial struggles and those of his company have been well-publicized. He staved off foreclosure on his $1.35 million home, which was featured in the movie "Rain Man," in 2003. Ach also was charged with felony theft of services in 2003 related to bouncing a check for more than $100,000 in Denton County, Texas. The legal action was settled for an undisclosed amount in March 2004.
Ach and his investors have put more than $19 million into Games Inc. since 2002 without reporting significant profits.
In recent years, Games Inc. has unsuccessfully lobbied state officials in Ohio, Illinois, Georgia, North Carolina and elsewhere for business selling lottery tickets over the Internet.
June 14, Ach met with Tom Hayes, utive director of the Ohio Lottery Commission, to discuss selling lottery tickets online. Hayes said he told Ach that Ohio is not interested in the venture because it would violate state and federal laws.
At Taft's request, Hayes is leading a three-member team reviewing various workers' compensation investment losses now estimated at more than $300 million.
Taft spokesman Mark Rickel said the governor knows Ach, but stressed, "The governor has consistently said he has no interest in" expanding lottery ticket sales to the Internet.
'Not a bad fellow'
State Rep. Bill Seitz, a gambling proponent, said he suggested to Ach and Hayes that they meet to discuss possible Internet sales. Seitz said his suggestion came during state budget talks - before an additional $800 million in new revenue was found.
Seitz, a Republican from Green Township, said that despite Ach's financial problems, "Roger's not a bad fellow.''
Ach was accompanied at the meeting with Hayes by Tom Needles, a charter school lobbyist and one-time aide to former Gov. George Voinovich, now a U.S. senator.
Former Ohio Lottery Director Dennis Kennedy also works for Games Inc. Kennedy was replaced by Hayes on Jan. 1, although he remained on the state payroll until March 15 as an $8,000-a-month consultant when he was hired by Games Inc. as president of its lottery division.
For three years ending June 30, Games Inc. had a $1,000-a-month contract with the Lottery Commission to send e-mail updates on lottery numbers to subscribers. Kennedy signed that contract as lottery director.
Other investors in Games Inc., according to U.S. Securities and Exchange Commission registration statements, are talk-show host and former Cincinnati Mayor Jerry Springer, a Democrat; Republican Party Chairman Robert Bennett; Appeals Court Judge Mark Painter; and former Senate President Stanley Aronoff. Aronoff, a Cincinnati lawyer, is a lobbyist for Games and another Ohio Lottery vendor, Scientific Games.
Bennett issued a statement Wednesday saying he was unaware of Noe's connection to the Games investment when he bought his stock.
Also investing in Games Inc. were former Taft chief of staff Brian Hicks and former state legislator Sally Perz , both part of a broader federal investigation of campaign contributions made to a Columbus fund-raising lunch for President Bush on Oct. 30, 2003.
E-mail jcraig@enquirer.com