Wednesday, May 22, 2002

Feds file claims on homes of Erpenbeck


Bankers' property is also targeted

By James McNair, jmcnair@enquirer.com and Patrick Crowley, pcrowley@enquirer.com.
The Cincinnati Enquirer

        The federal government took legal action Tuesday for the first time in its investigation of the Erpenbeck Co. and Peoples Bank of Northern Kentucky.

Finnan
Finnan
Erpenbeck
Erpenbeck
        The U.S. Attorney's office in Cincinnati filed civil claims against four homes owned by A. William “Bill” Erpenbeck and deposed Peoples officers John Finnan and Marc Menne.

        Under federal law, the U.S. Attorney's office can seek the seizure of assets believed to have been bought with money obtained through criminal activity — in this case, possible bank fraud. It doesn't matter that criminal charges have not been filed.

        “That (statute) allows the government to proceed to file civil forfeiture proceedings to begin a process to obtain access to the homes,” said Donald Bucklin, a former federal prosecutor now specializing in white-collar crime law in Washington, D.C.

STORY ARCHIVE
Click here for all Enquirer reports on Erpenbeck Co.
INVESTIGATION
If you have any additional information on the business dealings of the Erpenbeck Co. or Peoples Bank of Northern Kentucky - or on the involvement of any parties not yet identified in our coverage - please email Enquirer business reporter James McNair at jmcnair@enquirer.com or Kentucky Enquirer reporter Patrick Crowley at pcrowley@enquirer.com.
        “If the houses have been obtained by reason of bank fraud or other criminal activity, the statute gives the government the right to go in and seize them.”

        The FBI and Federal Deposit Insurance Corporation have been looking for evidence of bank fraud for several months amid the financial problems of the Erpenbeck Co. and the resulting damage to Peoples, one of its primary lenders. A year ago, Erpenbeck was the Tristate's fourth-biggest home builder. Today, its projects are mostly idle or under foreclosure by half a dozen banks.

        In its case before U.S. District Judge Herman Weber, the government submitted an affidavit stating why it believed the four properties had been purchased — at least in part — with stolen money. But the affidavit was sealed and not available for public viewing Tuesday.

        It did, however, identify the disputed properties. The homes, whose addresses are listed as defendants, are:

        • Mr. Erpenbeck's house at 2515 Legends Way in Crestview Hills, which is assessed for tax purposes at $1.3 million.

[photo] The U.S. Attorney's office in Cincinnati filed a civil claim against this Villa Hills home owned by Marc Menne.
(Patrick Reddy photo)
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        • The Villa Hills home of former Peoples Bank executive vice president Marc Menne at 988 Appleblossom Drive.

        • A Fort Myers condominium in the name of Mr. Erpenbeck's wife, Marcia.

        • A Fort Myers condominium jointly owned by Marc and Alice Menne and John and Susan Finnan.

        The complaint did not name the Finnans' house on the same street as Mr. Erpenbeck's. The Finnan residence is up for sale at an asking price of $799,000.

        In its motion, the government said it does not seek the seizure of the homes “at this time.” For now, authorities want to inspect, appraise and perform an inventory of the homes. If the government does elect to go after the homes — and prevails in court — it will be able to sell the homes.

        The civil action can be contested by any party with an interest in the property, including the owners and any mortgage lenders. The Erpenbeck home in Crestview Hills is under foreclosure by First National Bank of Northern Kentucky.

        Mr. Erpenbeck's lawyer, Glenn Whitaker of Cincinnati, also could not be reached, and Mr. Finnan did not return a telephone call. Harry Hellings, a Covington lawyer who represents Mr. Menne, emphasized that the lawsuit is not a criminal charge, but a measure to prevent the sale of the house.

        “They are not asserting any wrongdoing here,” Mr. Hellings said. “This is really nothing unusual. It's an attempt by the prosecution to make sure none of the assets are divested.”

        The assistant U.S. attorney who filed the forfeiture case, Kathleen Brinkman, could not be reached for comment Tuesday.
       



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