Friday, May 10, 2002

Troubles build for builder, banks


Boone sheriff begins criminal investigation

By Patrick Crowley, pcrowley@enquirer.com
and James McNair, jmcnair@enquirer.com
The Cincinnati Enquirer

        The Boone County Sheriff's Department on Thursday said it has opened a criminal investigation into the Erpenbeck Co.

        And Kenton County said the Edgewood building firm could face misdemeanor charges if it doesn't pay county payroll taxes it collected from employees but never gave to the county.

INVESTIGATION
    If you have any additional information on the business dealings of the Erpenbeck Co. or Peoples Bank of Northern Kentucky - or on the involvement of any parties not yet identified in our coverage - please email Enquirer business reporter James McNair at jmcnair@enquirer.com or Kentucky Enquirer reporter Patrick Crowley at pcrowley@enquirer.com.
        Erpenbeck is already the focus of an FBI probe into allegations of bank fraud. No charges have been filed.

        Boone County Sheriff Mike Helmig offered few details Thursday, other than saying the case involved a home in the southern end of the county built and sold by Erpenbeck.

        “A property owner has called us about a cash closing on a home purchased from the Erpenbeck Co.,” Mr. Helmig said. “Apparently, the complaint is that money used to pay a construction loan on the property was not paid off at the bank, which is what the homeowner believed was going to happen.

        “Ultimately, the homeowner discovered a lien against the property and found out the construction loan was not paid off.”

        The company has built homes and condominiums in Richwood and Union, including in the Steeplechase and Triple Crown developments in southern Boone County. Mr. Helmig, however, would not name the specific development. He would not identify the homeowner until more information is collected, nor would he discuss what charges might be pursued.

Bill Erpenbeck
Bill Erpenbeck
        “We are actively pursuing this as a criminal matter,” Mr. Helmig said, adding that two detectives have been assigned to the case.

        The allegation being investigated by the sheriff has similarities to other claims made against the Erpenbeck Co. and its former president, Crestview Hills resident A. William “Bill” Erpenbeck.

        Officials at Peoples Bank of Northern Kentucky in Crestview Hills have said that in the last year, Erpenbeck Co. employees deposited checks into its business accounts that were made to various lenders. The checks were issued at property closings to the banks that loaned Erpenbeck money to build homes.

        But instead of going to the lenders, up to 50 checks totaling $15 million went instead into Erpenbeck accounts — leaving affected homeowners without clear title to their properties.
       

Payroll taxes due

        Meanwhile, Kenton County Attorney Garry Edmondson said Thursday that Erpenbeck Development Co. — another Erpenbeck company with the same officers and address as the main entity — withheld $15,000 in county payroll taxes from the paychecks of its employees but didn't give the money to the county.

        “What we've discovered is that there is approximately $15,000 due Kenton County for its occupational license fee, our euphemism for an employment tax,” he said.

        Erpenbeck Development had paid its local taxes in the past. But it hasn't paid taxes to Kenton County since July 1, 2001, Mr. Edmondson said. Nine months of taxes, through March 31, are now considered delinquent.

        Erpenbeck has been accused in numerous liens and lawsuits of defaulting on bank loans, dishonoring debts to subcontractors and holding on to down payments for uncompleted houses and condominiums.

        Kenton County is already after Erpenbeck for reneging on a payment plan for more than $90,000 in overdue property taxes.

        An automated answering system now picks up phone calls to Erpenbeck headquarters. A message for company president Jeff Erpenbeck was not returned Thursday.

        The Kenton County Treasurer's office detected Erpenbeck's failure to pay the occupational license fee about a month ago when the county was rebating tax payments to residents.

        “Several employees sent in the paperwork for a refund, and it was discovered that the money was never paid,” Mr. Edmondson said.

        But the money was withheld from employees' pay, he said. He said he didn't know whether state and federal withholdings were remitted.

        No state or federal tax liens have been filed. The Internal Revenue Service and Kentucky Revenue Cabinet said they cannot discuss individual taxpayers.

        Mr. Edmondson said he will give the Erpenbeck Co. a chance to make good on the back taxes before considering criminal misdemeanor charges.

        “Normally, we make a demand, and people make payment voluntarily,” he said. “Sometimes they don't, and we go forward with a criminal complaint.”

       

       



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