By Brenna R. Kelly
Enquirer staff writer

FLORENCE - The city will recover nearly $4 million that its former finance director stole.

"It should be a relief to taxpayers that the funds will be back in the proper location," said Mayor Diane Whalen.

The recovery comes as the result of settlements and agreements the city has reached with people and businesses it accused of profiting from Ron Epling's theft.

The city's legal team was "able to reach agreements and settlements with the majority of the parties involved," Whalen said.

The city plans to release details at a news conference this morning.

Epling, who worked for the city for 15 years before his thefts were discovered in December 2002, admitted to stealing $2.8 million from city coffers.

Prosecutors have maintained the total was about $4.9 million.

"I don't think we will ever know exactly," Whalen said.

Epling died last year while serving a 16-year prison sentence.

After his death, the city sued 11 people or businesses, including Epling's wife and girlfriend in Boone Circuit Court in hopes of recovering the money. The suit named Great Clips hair salon chain, retirement accounts, a Florida software company, a life insurance company and Epling's estate.

The suit said that Epling's wife, Billie K. Epling, and his girlfriend, Cheryl Hatter, knew or should have known about the theft. Epling bought his wife a $700,000 home in Triple Crown and Hatter a $200,000 home in Delhi Township while he was making $66,000 a year.

The city also claimed that H.T.E. Inc., the software company Florence used for its finance system, was negligent because it allowed Epling to divert funds to himself.

In 1988, just a year after he started at the city, Epling opened a personal bank account at Fifth Third Bank titled "Capital Improvements."

Epling then diverted money from the city's accounts-payable fund into his personal account.

Florence did not say Thursday which parties settled.

Whalen said Florence had not decided what to do with the money but noted it's "one-time money" that could be used for capital improvements - what Epling named the fake account.

The city had already recovered $801,000 from two insurance companies.

In addition to the lawsuit in state court, the U.S. Attorney's Office filed suit in U.S. District Court in Covington seeking Epling's bank accounts, four homes, cars and his coin collection.

Florence also filed a claim for the assets. The federal lawsuit sought Hatter's house, Epling's condo, his wife's home and a house in Lexington.

E-mail bkelly@enquirer.com