Upon confronting Tom with specific, documented occurences, you learn that this was all a miscommunication:
Tom's sister had forwarded him the sexual jokes so he didn't even think twice that they would offend his female colleagues. The people that Tom is used to dealing with are usually very up-front when something is bothering them and since Susan did not tell him that these jokes bothered her, he assumed she found them humorous.
As for "staring" at Susan in the breakroom and standing close to her in the elevator, Tom did admit to you that he has feelings for Susan that he has never expressed to her. He explained that it was his way of flirting with her and once again, he did not realize that it was making her feel uncomfortable.
Tom agreed to stop forwarding these controversial emails, curb his flirting to outside of the office, and he is going to apologize to Susan for any discomfort that he may have inadvertantly caused her.
As a result of your investigation and confrontation, the situation was resolved and productivity and communication in your department has increased significantly.