By Jim Hannah
The Cincinnati Enquirer
and Stephenie Steitzer
Enquirer Contributor

BURLINGTON - Two days after receiving his 15-year service pin, the Florence finance director sat in shackles, under the watchful gaze of the mayor who had trusted him with her city's $18 million annual budget.

Ron Epling, 51, of Delhi Township sat unshaven and slumped in Boone County District Court as the prosecutor alleged how he was living the high life off more than $1 million siphoned from the Florence city general fund.

Suspended Florence Finance Director Ron Epling (left) talks with his attorney, Burr Travis (second from left) as Mr. Epling stands handcuffed to other prisoners in a line outside Boone District Court in Burlington. (Patrick Reddy photo) | ZOOM |

The prosecutor in Tuesday's arraignment told of offshore bank accounts, opulent homes purchased with cash and more than $1 million of local taxpayers' money missing, strewn across the world in accounts registered to girlfriends.

Mr. Epling's attorney, Burr J. Travis of Florence, entered a not guilty plea on his client's behalf before District Judge Michael Collins on the felony theft charge. Mr. Epling was arrested Monday and suspended without pay after an audit showed irregularities in the city's accounts.

Mayor Diane Whalen and a quorum of the City Council attended the arraignment.

Other than giving his name, date of birth and address of the Delhi Township home he shares with a girlfriend, the 51-year-old left the talking to his attorney.

In an unusual move, Commonwealth's Attorney Linda Tally Smith personally attended the arraignment, calling the total amount taken over the years "clearly in excess of anyone's wildest imagination."

The warrant issued for Mr. Epling's arrest dealt with the alleged deposit of a $125,000 Florence city capital improvement fund check into two personal Fifth Third bank accounts held by Mr. Epling.

Bond at $1 million

The investigation has turned up a long-term, systematic siphoning, the prosecutor said.

"We believe he has stolen in excess of well over $1 million since 1988," Ms. Tally Smith said, fighting Mr. Travis' motion to reduce Mr. Epling's $1 million cash bond.

"He has bank accounts established in girlfriends' names. There is evidence of an offshore account in Antigua. That indicates to me he is a flight risk."

Judge Collins declined to reduce the bond and set a preliminary hearing for Monday. He said that although Mr. Epling might not flee, if released he might tamper with evidence.

Mr. Epling has an offshore gambling account with Premiere League in the West Indies island of Antigua, according to a divorce filing on record in Boone County. At the time of the filing in June 2000, the account had a balance of $3,486.

The court document lists Mr. Epling's annual gambling winnings as $15,000 to $20,000, but the financial statements had a disclaimer saying it didn't list gambling losses.

Responsible for millions

Florence is a fast-growing city of about 25,000 residents 12 miles south of downtown Cincinnati. The largest city in Boone County, it has seen its coffers and quality of life grow as development including subdivisions, the Florence Mall, Turfway Park and corporate offices have sprung up.

Mr. Epling worked six years for the Commonwealth of Kentucky before taking the job with Florence 15 years ago. He has two bachelor's degrees from the University of Kentucky - in music and accounting - and a master's of business administration from Xavier University.

Mr. Epling, who serves in an appointed position, was not hired by the current Florence mayor and was in place when she took office.

Ms. Talley Smith said more charges are likely, saying that Mr. Epling confessed to taking about $1 million while being interrogated Monday by two FBI agents and a Kentucky State Police trooper.

Discovery, protection

The auditing firm Rankin, Rankin and Co. of Fort Wright discovered irregularities involving city money during an annual audit.

The firm, with a long history and strong reputation in Northern Kentucky, is the auditor of record for many Northern Kentucky cities

Ms. Talley Smith said investigators have already identified more than $1 million allegedly stolen in the last few years and that she believes that number will go up as auditors begin poring over books from the late '80s and early '90s.

"FBI agents spent the entire day (Monday) scrambling to close many accounts opened under many names," she said. "He just purchased an opulent house in Triple Crown with cash."

Property records show Mr. Epling with part ownership of residential property in Fayette County that recently sold for $131,000.

Ms. Whalen, recently re-elected, said the city will order a full audit. Ms. Talley Smith said the city has been conducting yearly audits as required by law, but that Mr. Epling has been able to cover the thefts through "clever deceit and lies."

"It was silly luck that auditors found one item this time around that brought the house of cards down," Ms. Talley Smith said. "They look for small things that just don't look right, and that's what they found during their most recent audit."

In July 2000, Mr. Epling's annual salary was $61,779.

Ms. Whalen said the city and its residents are protected by a bonding company.

"It is our belief that the day-to-day operations of the city will not be impeded," Ms. Whalen said. "We are very confident the projects the city is committed to will proceed on schedule. We will not have to raise taxes because of this threat either."

One of Kentucky's richest cities, Florence has been operating at a six-figure surplus on its annual budget for nearly a decade. The 2000-01 budget was $18 million.

Divorce hearing today

In addition to the theft charge he faces, Mr. Epling is scheduled to appear at a divorce hearing this morning with his wife, Billie Kay Epling, who was 52 at the time she petitioned for separation in 2000.

It was unclear Tuesday whether Mr. Epling would attend.

Reached at her home and business, Mrs. Epling said she had no comment on the charges against her husband.

Boone County Circuit Judge Linda Bramlage is expected to grant a divorce and address financial issues separately later.

The couple was married in 1984 in Fayette County. Mrs. Epling has a child from a previous marriage, but the two have no children together.

Mrs. Epling is not charged in connection with the allegations against her husband, nor has her name been mentioned by investigators.

In financial documents filed in June 2000 as part of the divorce proceedings, Mr. Epling listed his monthly income as $14,583.

He co-owns and operates six E'Clips Inc. hair salons in Northern Kentucky with his wife, according to Boone County court records.

A filing with the Kentucky Secretary of State says he is also director and sole officer of Cumberland Enterprises Inc. The business is not listed in the phone book.

Admitted affair

In 2001, Mrs. Epling asked the Hamilton County Court of Common Pleas to subpoena Cheryl Hatter, a Delhi Township woman. During a deposition, Mr. Epling had admitted to having an extramarital affair with Ms. Hatter with for several years.

Ms. Hatter, whose telephone number is unlisted, could not be reached for comment. No one answered the door at her Delhi residence Tuesday night.

According to the petition, Mr. Epling stated under oath that he had provided financial support for Ms. Hatter from marital funds without Mrs. Epling's knowledge.

Ms. Hatter also is not charged in connection with the allegations against Mr. Epling. Investigators have not mentioned her name in connection with the case.

Mr. Epling paid $199,900 for the home he shares with Ms. Hatter, according to the divorce filing in Boone County.

The home is listed on the Hamilton County auditor's records in Ms. Hatter's name.

Mr. and Mrs. Epling hadn't lived together since 1999, according to court records.

Delhi neighbors say Mr. Epling and Ms. Hatter had been planning to be married.

E-mail jhannah@enquirer.com