Ohio's Great Workers Comp Coin Caper?

I used to think I worked in a fairly pedestrian little industry. At cocktail parties, the words "insurance" and "workers comp" were always good for a few yawns and glazed eyes. There wasn't much in the way of excitement - a little premium fraud here, a little claimant fraud there, and an occasional doctor mill busted...nothing too eye opening.

But today, I suddenly find myself in the thick of one of the most scandal-ridden industries going... first there was the Spitzer probe and the ignominious fall of the financial giants; and now, in a surprising follow-up, courtesy of Ohio, we have the great Comp Coin Caper of 2005.

Now if the linkage between 119 rare coins and workers comp isn't immediately apparent to you, you can be forgiven. It's a pretty twisted tale - I'll rely on the Toledo Blade’s article State decides to get rid of rare-coin investments to fill you in on most of the details:

"COLUMBUS - State officials yesterday said they are halting a controversial investment in two rare-coin funds controlled by Tom Noe, a prominent Toledo-area Republican fund-raiser and coin dealer. The Ohio Bureau of Workers' Compensation announced that it will dissolve the $50 million investment "over a reasonable period of time sufficient to protect the state's investment."

Now that seems like a bit of an unorthodox and risky investment for an injured worker trust fund to me -- but wait, there's more...

"The agency's decision was made a day after The Blade reported that two rare gold coins purchased for the state had probably been stolen. Mr. Noe had said the coins were "lost in the mail." He has told the bureau that an additional 119 coins owned by the state were "misappropriated" by a former employee."

This boggles. "Rare Coin Funds" sounded risky enough, but now we learn that this fund actually involved cold hard coins that were shipped in the mail. And two were lost and 119 misappropriated? Huh? But wait ...

"The Blade also reported Sunday that in the year since Mr. Noe learned the 121 rare coins were missing and possibly stolen in Colorado, he had not contacted law enforcement authorities. A bureau spokesman also said Ohio officials didn't learn until being informed by Blade reporters of the missing gold coins, two of the most valuable rare coins purchased for the state by an employee of Mr. Noe's at a cost of $250,000."

OK, now we are really in full-fledged bizarro land -- stolen rare coins and workers comp. What were state officials thinking???

"The Blade first reported April 3 that the bureau since 1998 had invested $50 million in rare coin funds that Mr. Noe controls, despite strong concerns raised by an auditor with the bureau about possible conflicts of interest and whether the state's millions were adequately protected."

OK, well at least the auditor was thinking. But if he (or she?) was against the investment, how did state funds ever get embroiled in such a specious scheme? Well I guess that’s what everyone’s wondering now.

This has moved from the BWC to the state’s cornermost office. And now it involves allegations of political cronyism, campaign donations, and the Governor and what he knew or didn’t know about trips to a Florida vacation home. Stay tuned.

When one of my colleagues wants to get to the root of things, he always says, “follow the money” -- I just never would have thought the trail would be in coins. You have to admit, this is pretty racy stuff for workers comp.