By Patrick Crowley
Enquirer staff writer

COVINGTON - Just three years ago, bankers John Finnan and Marc Menne were living lives many people can only dream about.

They were the top executives at a successful Northern Kentucky bank, raising their families in homes that cost more than $600,000, driving luxury automobiles and enjoying status in the community.

But Tuesday, they pleaded guilty to federal charges for their role in the financial scandal that destroyed the Erpenbeck home-building company and Peoples Bank of Northern Kentucky.

And Oct. 29, they are to stand before a federal judge in Covington and be sent off to prison.

Until then, Finnan will continue living in Gulf Breeze, a community in the Florida panhandle near Pensacola, working in a gift shop owned by his wife, Susan.

Menne is managing property for a Northern Kentucky medical practice and is living in Villa Hills.

A former colleague marvels at the bankers' spectacular fall.

"It is just so amazing, it's just so sad," said John Yeager, owner of Ashley Development and former chairman of the Peoples Bank board of directors.

"They did an excellent job," Yeager said. "They are two really, really decent people. So many people wanted to believe they were innocent."

The pair pleaded guilty to bank fraud, misapplying $2 million in bank funds and drafting phony loan documents.

Finnan was president of the bank, and Menne was the executive vice president who oversaw commercial lending. They could spend as many as 11 years in federal prison. They also face up to $1 million in fines and must pay restitution of as much as $11 million.

The bank collapsed in mid-2002 after it was revealed that Erpenbeck - who is serving 30 years in federal prison for bank fraud - diverted $34 million in closing checks into his business accounts at Peoples Bank.

Finnan and Menne were not implicated in Erpenbeck's theft case. They have admitted, however, to concealing information from the board of directors and from other banks participating in loans for Erpenbeck's company and to making unauthorized loans to Erpenbeck.

They also were involved in buying homes from Erpenbeck at bogus prices and paying the home builder kickbacks, according to federal prosecutors.

Lawyers for both men said they are basically good people who made mistakes and fell in with the wrong guy - Bill Erpenbeck.

"When Mr. Menne was called to task on this, he got a job as a landscaper, worked in the town, didn't leave, sold his home and did what he could to keep this family together," said Harry Hellings, Menne's defense lawyer. "That's the type of an individual he is."

Richard Goldberg, Finnan's Cincinnnati lawyer, blamed Erpenbeck.

"There was a successful relationship between the Erpenbeck Companies and the bank at one point," Goldberg said. "John got taken by all that and tried to stay as loyal as he could to who he felt was a good customer.

"At the same time, things went sour, and John made some mistakes along the way."

Federal prosecutors paint a different portrait, saying Finnan and Menne were motivated by greed and are no better than common thieves.

"The victims lost money ... just as if they've been robbed," U.S. Attorney Gregory Van Tatenhove said after Tuesday's court hearing.

"The bottom line here appears to be greed."

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E-mail pcrowley@enquirer.com