By Gregory Korte
The Cincinnati Enquirer

Two FBI agents interviewed city employees at Cincinnati City Hall on Thursday about the collapse of the Empire Theater project.

The FBI wants to know whether LaShawn Pettus-Brown, a professional basketball player in Japan who received $184,140 in city loans and grants to fix up the 89-year-old Over-the-Rhine Theater last year, falsified a bank letter in an attempt to get more city money.

Assistant City Manager Rashad Young said agents gave no indication they were looking into any wrongdoing on the part of city officials. He said the agents' questions focused on two areas:

Did the city use any federal money for the project?

Did the developer falsify a bank letter in order to get funding?

The answer to the first question appears to be no.

But PNC Bank, which had initially expressed interest in the project, says a financing letter Mr. Pettus-Brown submitted to the city on PNC Bank letterhead was bogus. PNC, based in Pittsburgh, is a federally chartered bank, which could give the FBI jurisdiction in the case.

The letter, dated Oct. 25 and received by the city Nov. 25, said: "After further review of the project and your company's financial statements, PNC has officially approved funding for its portion of the Empire Theater project," the two-paragraph letter began.

It mentioned no specific amounts or terms, and vaguely suggested a state of Ohio funding commitment to the project that state officials said never existed.

Peg Moertl, the city's director of community development and planning, said the letter "smelled" from the beginning. City staffers immediately called PNC Bank for confirmation.

Two days later, they received a written response from PNC vice president Edgar A. Pressley Jr., the purported author of the Oct. 25 letter. He said the letter "was in fact not written by me or any representative of PNC." That passage was underlined.

"It should also be noted that PNC Bank is no longer considering financing this project," Mr. Pressley wrote.

City officials say taxpayers were not defrauded, because the city did not disburse any funds based on the letter.

The city wrote two checks in July and August, but froze funding in September. Because of that, city prosecutors said, the city doesn't have a criminal case against Mr. Pettus-Brown.

The FBI confirmed Thursday that it had opened an investigation, but would not elaborate.

"There are two agents that were at City Hall today looking into the matter," said James Turgal, chief division counsel and spokesman for the Cincinnati office of the FBI. "We are at the very beginning stages. I don't want to get into what direction we might be headed in."

E-mail gkorte@enquirer.com