Tuesday, February 24, 2004

Erpenbeck's money tracked

Trustee says wife tried to transfer $232K

By James McNair
The Cincinnati Enquirer

A U.S. Bankruptcy Court trustee said he will ask that $232,000 in brokerage funds held by Tony Erpenbeck be placed under the trustee's control.

The court-appointed trustee, lawyer Mike Baker of Crescent Springs, said Erpenbeck's two accounts at Woodberry Financial in Woodberry, Minn., were frozen Friday to keep Erpenbeck's wife, Phyllis, from moving the money into her name.

Baker said he was assigned to the case after one of Erpenbeck's creditors, Provident Bank, learned of the attempted transfer.

Provident and two other banks forced Tony Erpenbeck, 69, into bankruptcy proceedings Feb. 9. They claim the Crestview Hills resident failed to pay a combined $3.3 million in civil judgments.

Erpenbeck and his son Bill are being held at the Hamilton County Justice Center in Cincinnation federal obstruction-of-justice charges. The two men were arrested Feb. 5 in an FBI sting involving Bill's sister, Lori Erpenbeck.

The charges of attempting to influence Lori's testimony before a sentencing hearing related to Bill Erpenbeck's bank fraud conviction were formalized in a five-count indictment against the two men last week. Bill Erpenbeck's fraud case came in connection with the failure of the home-building company he co-founded, the Erpenbeck Co., in 2002.

Bill and Tony Erpenbeck have been jailed for 19 days and are scheduled to be arraigned this morning on the obstruction charges before U.S. Magistrate Judge David Perelman.

Tony Erpenbeck pleaded poverty in the obstruction case Feb. 6 and a federal public defender was appointed to represent him. But an FBI agent testified that day that the elder Erpenbeck recently withdrew $186,000 from individual retirement accounts and paid $164,000 toward Bill's new home in Fort Myers, Fla. The agent also said Tony Erpenbeck was paying the $1,700 monthly mortgage on the house.

Tony Erpenbeck has not been charged in the bank fraud, in which Bill, daughter Lori and another Erpenbeck Co. employee pleaded guilty and await sentencing. The fraud occurred in connection with a three-year scheme that put the home-building company out of business, forced the sale of Peoples Bank of Northern Kentucky and left home buyers, subcontractors and banks with tens of millions of dollars in claims.

Erpenbeck projects throughout the area were taken over by lenders and, in some instances, have been revived by new developers. A federal criminal investigation is still under way.

Baker, who will represent creditors as Tony Erpenbeck's bankruptcy case goes forward, is seeking information on Erpenbeck's other assets.

"I am asking that anyone with information regarding any asset in which Mr. Erpenbeck may possess an interest to please contact my office directly," he said. "Also, I am asking anyone with information regarding any recent business transactions Mr. Erpenbeck has had to come forward as well."


E-mail jmcnair@enquirer.com

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