By Patrick Crowley
The Cincinnati Enquirer

COVINGTON - Former Florence finance director Ron Epling told the FBI his alleged embezzlements began in 1990 with a check for about $15,000 in city funds he deposited into a "Capital Improvements" account he opened at Fifth Third Bank.

By the time he admitted to the thefts Dec. 16, Mr. Epling told investigators he had stolen more than $1 million from the city that had employed him since 1987, FBI agent Michael A. Shafer said in an affidavit filed in U.S. District Court in Covington.

"Over time, Epling continued to cause checks to be drafted to `Capital Improvement' (account) and he continued to convert these funds to his own use," Mr. Shafer said in the affidavit. "The amounts embezzled increased in size and frequency over the years."

The affidavit alleges that Mr. Epling's estranged wife, for whom he bought a $688,000 home with $400,000 cash down, had threatened to turn him in.

It also reveals that accounts at Huntington Bank, not just Fifth Third Bank, were used to funnel Florence general fund money.

Mr. Epling is being held in the Boone County jail in lieu of $1 million bond. He faces 18 charges of theft.

The government may pursue other charges against Mr. Epling, Assistant U.S. Attorney David Y. Olinger Jr. said in court documents filed along with the affidavit.

"Voluminous documents need to be reviewed," Mr. Olinger said.

The affidavit was filed Dec. 19 as part of the federal criminal investigation of Mr. Epling, who was arrested Dec. 16 after auditors uncovered a questionable $125,000 transfer of city money.

The affidavit identifies three other checks from the city's general fund that were deposited into "personal accounts under (Mr. Epling's) control: $150,000 on July 1; $128,000 on July 5; and $60,000 on July 14.

A criminal complaint filed by the Boone County Commonwealth Attorney's Dec. 23 lists 18 transactions between Jan. 2, 2001, and Aug. 26, 2002, that total $1,204,280.

According to the affidavit, Mr. Epling used the money to:

• Pay expenses of his estranged wife, Billie Epling, and his girlfriend, Cheryl Hatter.

• Take gambling trips to Las Vegas.

• Buy a $200,000 home on Oakwood Park Drive in Ms. Hatter's name.

• Buy a $17,000 Pontiac for Ms. Hatter.

• Pay $400,000 toward construction of a $688,000 home for his wife on Reichcount Court in the Triple Crown subdivision in Boone County.

In addition to the two accounts at Fifth Third, Mr. Epling also told agents he "diverted Florence city funds" into a pair of accounts at Huntington Bank, the affidavit said.

Mrs. Epling and Ms. Hatter were aware of the embezzlements, according to the affidavit. And at one point Mrs. Epling allegedly "threatened to report Epling to the authorities." But both women allegedly continued to receive money after having such conversations with Mr. Epling.

The affidavit was included in a request by the U.S. attorney's office in Lexington, which is involved in the investigation, for a temporary restraining order that would prevent the sale of property Mr. Epling bought with the stolen money.

U.S. District Judge William O. Bertelsman granted the restraining order Dec. 27, court records show. Ultimately, the government will attempt to seize the property, sell it and return at least some of the money stolen from the city, Mr. Shafer said in the affidavit.

"There will be a victim in this matter ... the city of Florence, Kentucky, who will be the recipient of restitution," Mr. Shafer said. "The government requests a restraining order to ensure the subject property will be available pending a forfeiture complaint."

Mr. Epling is believed to also own property in Lexington and elsewhere in Boone County.

E-mail pcrowley@enquirer.com