TOLEDO, Ohio — A judge has ruled that Ohio will be forced to pay more than $155,000 to eight local money managers accused of running a $72 million Ponzi scheme. But those former Northwest Capital employees could still face multiple charges, 11 Investigates has learned.
Late last month, the state asked to dismiss 204 felony counts against the employees after it became apparent that there was no simple way to share 5 million pages of documents related to the case with defense teams.
A large number of documents are not believed to be evidence, but the original vendor was not able to parse out the relevant papers, resulting in an overwhelming number of documents that could not be searched by the defense teams.
In their motion to dismiss, the state indicated it planned to seek re-indictments against the eight managers.
"The decision concerning sanctions does not impact the intention stated in the motion to dismiss to reindict the case," said Steve Irwin, spokesperson for the Ohio Attorney General's Office.
No timetable has been offered for presenting evidence to a grand jury, but a new grand jury would need to hand down new indictments.
Judge Gary Cook said the defense teams need to be reimbursed for the time spent on the case since the eight were originally indicted last April. There was also a hearing in which the team hired experts to testify about the ineffectiveness of the system. Those fees will also be reimbursed.
Some defendants filed motions to have their cases dismissed with prejudice, meaning they could not be re-indicted, arguing the attorney general’s office acted in bad faith in delivering discovery. But Cook rejected those motions, writing in his opinion that there was no evidence of bad faith.
In total, the suspects are accused of mismanaging a combined total of $72 million from 741 investments belonging to at least 200 people over a 10-year period, beginning in 2011.
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.
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
Cook awarded the following sanctions:
- DelVerne, $20,000
- Miller, $22,000
- Gary Rathbun, $13,637.50
- Hall, $19,950
- Nancy Rathbun, $7,900
- Salon, $23,600
- Walters, $12,937.50
- Konerman, $36,200
The amount adds up to $156,225. The attorney general’s office has not said if it will continue to pursue the case.