Almost since the beginning of its relationship with the state, Capital has invested state money - totaling nearly $1 million - with controversial Ottawa Hills real estate mogul John Ulmer. Mr. Ulmer's companies agreed to pay Rare Coin Enterprises, one of Capital Coin's wholly owned subsidiaries, 10 or 12 percent on the investment.
Mr. Ulmer takes investors' money and buys homes, often in the lower-income parts of Toledo. He then fixes them and resells them, acting as a private bank that charges interest rates above traditional banks and mortgage companies.
The resulting revenue stream allows him to provide healthy returns to his investors.
But some community activists and Toledo leaders have accused Mr. Ulmer of buying substandard homes for cheap prices and then reselling them to poor buyers who must pay him inflated prices plus high interest rates. Mr. Ulmer has countered that he's helped people with poor credit realize the American Dream and helped rehabilitate neighborhoods in the process.
Mr. Cowman, the former chief investment officer for the bureau and now director of investment for the Ohio School Employees Retirement System, said he knew Mr. Noe had investments in real estate but said they were short term, which he defined as less than a year. He didn't recall the specific investments, saying there were too many managers to know every single investment.
"We pretty well let our managers use their discretion," he said.
Records filed in Lucas County, however, show that the loans to Mr. Ulmer lasted from a year to five years. Capital Coin, through its subsidiaries, still holds three mortgages valued at $352,000 with Mr. Ulmer's companies, although Mr. Noe has not loaned new money to the company since August, 2000.
Also, Mr. Elliott, the bureau's manager of internal audits, raised questions about the mortgages. He said the bureau had no documentation that the loans to Mr. Ulmer were properly covered by the value of the properties listed on the mortgages.
"While the various notes receivable were collateralized by real estate, as evidenced by mortgages, we found no documentation for appraisals or title searches performed to ensure that the property collateralizing the receivables was of adequate value for the loans," Mr. Elliott wrote.
Last week, the state refused to provide copies of mortgage documentation, which the bureau later required from Mr. Noe, citing the potential that they could be considered "trade secrets" and thus exempt from Ohio's public records law.
But a Blade review of the properties in Lucas County revealed that one of the properties was worth far less than the mortgage value.
Capital Coin, through its Rare Coin Enterprises subsidiary, invested $160,000 in July, 1999, with Ulmer-managed Haven Holdings. In return for the investment, Haven granted Rare Coin a mortgage on a parcel just off Airport Highway in Springfield Township that once had a small single-family home upon it.
According to the Lucas County auditor, that land - now vacant - is worth $25,800. Mr. Ulmer's company, Westhaven Group, LLC, bought it in 1999 for $32,000."
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