Friday, May 31, 2002

Civil suit impounds Jams homes


Model houses had been bought from Erpenbeck Co.

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

        The 19 model homes that two ousted Northern Kentucky bankers bought from the Erpenbeck Co. for almost $5 million were legally impounded Thursday as possible purchases with stolen money.

        Filing its third civil forfeiture action in nine days, the U.S. Attorney's Office in Cincinnati this time went after the real-estate portfolio of Jams Properties. The company is headed by John Finnan, who was forced to resign as chief executive of Peoples Bank of Northern Kentucky April 29, and Marc Menne, its former executive vice president.

STORY ARCHIVE
Click here for all Enquirer reports on Erpenbeck Co.
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.
        Last week, the government filed forfeiture lawsuits against the Kenton County homes and Florida condominiums of Mr. Finnan, Mr. Menne and A. William “Bill” Erpenbeck. It said it isn't seeking the seizure of the homes “at this time,” but left open that possibility if it determines that the homes were paid for with proceeds of bank fraud.

        Federal law allows criminal authorities — even when no charges have been filed — to seize and sell assets believed to have been bought with money from criminal enterprises. None of the subjects in the bank fraud investigation of Erpenbeck and Peoples Bank has been charged with a federal crime.

        Mr. Finnan, Mr. Menne and their wives formed Jams in 1997. That year, the Kentucky company began buying model homes in Erpenbeck Co. developments in Kentucky and Ohio. By the time the buying ended in January 2001, Jams had 19 houses and condos.

        The Jams venture contributed to Mr. Finnan and Mr. Menne's downfall at Peoples Bank. The bank's directors said it wasn't until late March that they learned of Jams' real estate dealings with Peoples' biggest borrower.

        The Jams homes were purchased from Erpenbeck Co. and financed by small banks in Corbin, Ky., and Eaton, Ohio.

        One of Mr. Finnan's lawyers, John Schuh of Cincinnati, said Thursday that he wasn't surprised.

        “If they filed an action with respect to (Mr. Finnan's) Florida condo and his personal residence, it seemed that the Jams matter would not be far behind,” Mr. Schuh said.

        The news was bad for Susan Huff, the Florence real estate agent trying to sell 18 of the homes. One of the listings — a $220,000 house in the Steeplechase subdivision in Boone County — is under contract.

        “I don't know what to say,” said Ms. Huff, whose father, Jim, sits on the Peoples board of directors. “The owners asked me to list them, and I'm listing them. I don't know what will happen.”

        The banks that provided Jams with its purchase financing will also likely be rattled by the federal forfeiture suit.

        Eaton National Bank & Trust has $998,100 in loans at risk, while Bank of Corbin has $744,300, according to mortgages on file in local courthouses. Eaton National CEO Jeff Maffett did not return a call Thursday. Bank of Corbin CEO Tim Barnes was out Thursday afternoon.

       



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