Tuesday, August 27, 2002

Bad-check charge against Erpenbeck dismissed

Judge rules case belongs in civil court

By Patrick Crowley pcrowley@enquirer.com
The Cincinnati Enquirer

        BURLINGTON - Embattled home builder Bill Erpenbeck won a legal victory Monday when a Boone County judge dismissed the felony bad check charge he was facing.

        After a preliminary hearing that lasted less than an hour, Boone County District Judge Michael Collins ruled that because of several factors - including that the check was post-dated - the case was a civil rather than a criminal matter.

        In his ruling, Judge Collins also cited the long-term business relationship between the Erpenbeck Co., the Edgewood home-building firm that Mr. Erpenbeck founded and previously ran, and the contractor he wrote the $258,399 check to Morris Heating and Cooling Inc. of Burlington.

Click here for all Enquirer reports on Erpenbeck Co.
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.
        “I don't think there is a criminal intent at this point,” Judge Collins said. “I'm sure there are a lot of people that think differently.”

        Mr. Erpenbeck, who has been living on the Florida Gulf coast with his wife and three children, said nothing during the hearing other than giving his name, address and date of birth. He left the courtroom without speaking to reporters.

        Assistant Boone County Attorney Bill Engel said the case could still be taken to the grand jury by the Boone County Commonwealth Attorney's Office, by the detective who investigated the case or by Louie and Becky Morris, owners of Morris Heating and Cooling.

        It could not be determined Monday if prosecutors or police will pursue the matter before the grand jury.

        Florence lawyer Burr Travis, who represented Mr. Erpenbeck and who has handled criminal cases for 25 years in Boone County, said he could not recall the Commonwealth Attorney's office ever prosecuting the writer of a bad post-dated check.

        Mr. Morris, who testified during the hearing, did not say if he would continue the case by taking it to the grand jury. He had no comment other than to say, “You can't print what I'm thinking.”

        Though Mr. Erpenbeck did earn a victory with Monday's ruling, his legal problems are far from over.

        Federal officials continue a federal bank fraud investigation of allegations that Erpenbeck employees diverted $16.8 million in home closing checks made out to various banks into Erpenbeck Co. accounts at Peoples Bank of Northern Kentucky in Crestview Hills. Cincinnati lawyer Glenn Whitaker, who also represents Mr. Erpenbeck, has indicated he is working on a plea agreement with federal prosecutors in which Mr. Erpenbeck may plead guilty to certain crimes.

        And dozens of subcontractors, including the Morrises, as well as a number of banks, have sued Mr. Erpenbeck and his company for non-payment of work and loans.

        The charge dismissed against Mr. Erpenbeck on Monday would have carried a prison term of up to five years, had he been convicted.

        “This is not a criminal matter,” Mr. Travis said. “It's a business deal gone bad.”

        During the hearing, Mr. Morris testified that earlier this year he made several attempts to collect money from the Erpenbeck Co. On Jan. 28 he said he went to Mr. Erpenbeck's Edgewood office and after “chit chatting” for a few minutes received a check in a sealed envelope.

        But later that day when he tried to deposit the check at Heritage Bank in Burlington, he realized the check was dated for Feb. 28. Mr. Morris said he was then called by Jeff Erpenbeck, Mr. Erpenbeck's brother, on Feb. 27 and was told there was not enough money in the company's accounts to cover the check. Eventually on April 19 Mr. Morris deposited the check in his company's accounts. It came back four days stamped “insufficient funds.”

        Mr. Travis argued that Kentucky law treats post-dated checks “almost as promissory notes, which is a promise to pay funds at a later date.”

        Under cross-examination, Mr. Morris testified that the materials Mr. Erpenbeck purchased from the Morris' firm - which did work on 21 Erpenbeck-related projects - were delivered during 2000 and 2001. For a crime to occur, there needed to have been a deliberate attempt to deceive the Morrises. Mr. Travis argued that was not so, since the materials had already been delivered and the Erpenbecks paid with what in affect was a promissory note.

        While on the stand, Mr. Morris said the biggest mistake he made “was trusting” Mr. Erpenbeck.

        “I believed he was going to pay me,” Mr. Morris said.


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