TOLEDO, Ohio — More than three years ago, state investigators raided the Sylvania offices of Northwest Capital.
That raid yielded a treasure trove of documents, which were at the heart of 204 felony charges brought against eight money managers in April of 2023.
But that treasure trove has now become an albatross for prosecutors, who are struggling with an effective way to share up to 5 million pages of documents with defense attorneys.
On Monday, state and defense legal teams battled in the courtroom of Lucas County Common Pleas Court Judge Gary Cook on how to dismiss the charges.
RELATED: Ohio Attorney General's office temporarily drops case against Northwest Capital money managers
On Friday, the Ohio Attorney General’s Office filed a motion to have the charges dismissed without prejudice. Spokesperson Steven Irwin told WTOL 11 that the intent is to seek reindictment of the defendants once an effective vendor can be found to host the documents.
In March, defense attorneys filed motions to have the charges dismissed, and the state opposed those motions. As a result, defendants had to hire experts to explain the inadequacy of the file-sharing efforts and also were forced to pay for many hours of legal help. In some cases, those expenses ran up to $50,000.
The state then changed directions and attempted to dismiss the charges on its terms and a flood of filings resulted. At first, attorneys attempted to sanction the state and have it pay for expenses incurred since March.
But in court, defense attorney Rich Kerger argued that the charges should be dismissed with prejudice, meaning that the state could not attempt to reindict. He argued that there has been financial and emotional damage done and his client, James DelVerne, has not been able to see the evidence against him since he was indicted 14 months ago, violating his constitutional right to discovery. He said his client has not been able to get a job and he and his wife are living in her mother’s basement.
Cook heard arguments from both sides but had not issued a decision as of late Monday afternoon.
Prosecutors have said the defendants convinced dozens of clients to invest large sums of money with companies affiliated with Northwest Capital, even though the companies were performing poorly. The investments, according to prosecutors, were then floated between the companies.
In total, the suspects are accused of mismanaging a combined total of $72 million from 741 investments belonging to at least 200 people.
Authorities described the indictments as the "culmination" of a multi-year investigation by the Ohio Department of Commerce's Division of Securities and the Ohio BCI.
The indictment last year involved the following people:
- James DelVerne, 93 felonies
- Doug Miller, 39 felonies
- Gary Rathbun, 37 felonies
- Colleen Hall, 10 felonies
- Nancy Rathbun, seven felonies
- Adam Salon, seven felonies
- John Walters, six felonies
- Brad Konerman, five felonies