TOLEDO, Ohio — Editor's note: The video in the above player is from a previous report in April 2023.
Excessive paperwork has temporarily derailed a case against eight Lucas County financial managers accused of running a lucrative Ponzi scheme over a 10-year period.
On Friday morning, the Ohio Attorney General’s Office filed a motion to dismiss 204 felony counts against the managers at Northwest Capital, a Lucas County investment firm.
The charges were related to the alleged mismanagement of $72 million in investments between 2011 and 2021. The eight were indicted in April of 2023.
Steven Irwin, a spokesman for the Attorney General’s office, said there were more than two million pages in discovery documents. A local attorney involved in the case said the number is actually more than twice that amount. The volume has caused software issues and created problems for attorneys trying to build a defense for their clients.
“We filed a dismissal, with the intent of re-indicting,” Irwin said. “We are confident that we will be able to re-indict and reduce some of the issues.”
The prosecution has 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 Bureau of Criminal Investigation.
In February 2021, WTOL 11 reported the Ohio BCI and the Department of Commerce executed a search warrant at a building on Kings Pointe Road in Sylvania with a Northwest Capital sign out front.
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
A hearing is scheduled for Monday at 9 a.m. in the courtroom of Lucas County Common Pleas Judge Gary Cook.