BURLINGTON — Peoples Bank of Northern Kentucky has asked a judge to protect homeowners stung in the Erpenbeck scandal from losing their homes by foreclosure.

STORY ARCHIVE

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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.

        In a lengthy brief filed late Thursday afternoon, lawyers for the Crestview Hills-based bank asked Boone County Circuit Court Judge Jay Bamberger to release first mortgage liens on 211 Greater Cincinnati homes built and sold by the Erpenbeck Co.

        Employees at the Erpenbeck Co. diverted $24 million in checks and cash into its accounts at Peoples Bank, according to court documents, resulting in liens on the homes. The money was supposed to pay off the construction loans.

        “This plan will take care of the homeowners ... and protect them from the possibility of foreclosure,” said Louisville lawyer Ivan Diamond, who represents Peoples Bank.

        Most banks involved have indicated that homes will not be foreclosed on while the case is being worked out. But two weeks ago, Guardian Savings Bank foreclosed on three homes in Boone County.

        Peoples' new brief requests that Judge Bamberger prevent Guardian from moving forward.

        After the liens are removed, Peoples and the other banks and title companies involved in the case would determine responsibility for the money diverted by the Erpenbeck Co., Mr. Diamond said.

        All 211 homeowners are represented in a class action lawsuit filed by Cincinnati lawyer Stan Chesley and Covington lawyer Brandon Voelker. They have previously asked Judge Bamberger to have Peoples make good on the diverted checks and then go back and work out how much the various banks and title companies should pay.

        “Our goal has been to get the mortgages released,” said Mr. Voelker, who had not seen the brief as of early Thursday evening.

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