Monday, July 08, 2002

Judge takes on Erpenbeck scandal

Ky.'s busiest judge just got busier

By Patrick Crowley,
The Cincinnati Enquirer

        BURLINGTON — Boone County Circuit Court Judge Joseph “Jay” Bamberger is the busiest judge in Kentucky, handling almost 1,600 cases a year.

Judge Joseph Bamberger listens to attorneys involving some 250 Erpenbeck home owners in court on Friday.
(Tony Jones photo)
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        Add two more cases to his docket — or as many legal types see them, one very big case: Erpenbeck.

        The lawsuits are part of the Erpenbeck Co./Peoples Bank of Northern Kentucky financial scandal, involving 211 homeowners, more than 100 lawyers, 14 banks, 23 title companies and $16.7 million.

        “It is going to be a challenging case to handle,” Judge Bamberger said.

        That's an understatement — and all eyes in the Greater Cincinnati legal community are on this judge. On Friday, in a two-hour hearing on a simple motion in one of the cases, the jury box in Judge Bamberger's courtroom was packed — with lawyers taking notes.

        Judge Bamberger, 59, a Kenton County native whose father didn't want his son following him into the family meat-cutting business, is now saddled with slicing through a case as complicated as he's seen in his 20 years on the bench.

        During a rare moment of quiet in his courtroom in Boone County's old courthouse, the judge jokingly refers to one of the cases as Peoples v. The World, so long is the list of defendants Peoples Bank seeks to have share in responsibility for helping Erpenbeck homeowners.

Click here for all Enquirer reports on Erpenbeck Co.
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 or Kentucky Enquirer reporter Patrick Crowley at
        Lawyers who have practiced before Judge Bamberger say he has intelligence to handle the legal issues that will arise in the case, coupled with his ability to manage a staggering number of cases.

        “I'd put Judge Bamberger on par with any federal judge in terms of his ability to manage complex litigation,” Crestview Hills lawyer Mark Guilfoyle said. “He has an incredible workload, yet he maintains a very professional demeanor in the face of it all.”

        Under the state judiciary system, Judge Bamberger oversees circuit court cases — lawsuits and most felonies — in Boone and Gallatin counties.

        According to the Administrative Office of the Courts in Frankfort, 1,649 cases were filed in the two counties last year, making Judge Bamberger the busiest judge in Kentucky.

        The circuit court judge in LaRue, Nelson and Hardin counties, south of Louisville, had the second-highest load with 1,589 cases.

        Last month, the Kentucky Bar Association named Judge Bamberger co-judge of the year, sharing the award with Kenton Circuit Judge Douglas Stephens.

        The two were named partly because of their ethics and work habits, according to the statewide lawyers' group.

        “Jay is a very pragmatic guy who doesn't like a lot of delays and who works hard to make rulings because he has so many cases,” former Boone County commonwealth attorney Willie Mathis said.

        Mr. Mathis, who retired as the state prosecutor two years ago, hired Judge Bamberger as an assistant commonwealth attorney in 1978 and then practiced before him when Judge Bamberger was elected to the circuit court bench in 1992.

        “He just puts his head down and gets the job done,” Mr. Mathis said. “That's going to help him get through the Erpenbeck cases.”

        The Erpenbeck Co., an Edgewood home builder, is being investigated by federal authorities for bank fraud. Employees at Erpenbeck are accused of receiving checks at house closings that were made out to lenders who made construction loans and held first mortgages.

        But instead of forwarding the money to those lenders, almost $17 million in checks was diverted into Erpenbeck Co. accounts even though the checks were not made out to Erpenbeck.

Two large lawsuits

               Judge Bamberger is handling two lawsuits related to the Erpenbeck/Peoples case.

        One is a class-action suit involving 211 Greater Cincinnati homeowners, filed against Peoples Bank. In that case, homeowners allege that they don't have clear title because Peoples allowed checks to be deposited into Erpenbeck accounts.

        Noted Cincinnati plaintiffs' lawyer Stan Chesley and Covington lawyer Brandon Voelker are representing the class.

        “The homeowners...all have an identical legal position and Peoples Bank hasn't clarified their response to that problem yet,” Judge Bamberger said.

        The other case — the one Judge Bamberger calls Peoples v. The World — looks to be a judge's nightmare, a complex legal entanglement that could involve more than 100 lawyers before it is decided.

        In that case, Peoples Bank has sued not only the Erpenbeck Co., a number of its development subsidiaries and its former president, A. William “Bill” Erpenbeck, but also the title companies and other banks involved in the closings where checks were diverted. All told, the case has almost 100 defendants.

        In Friday's motion hearing in the class-action suit, Judge Bamberger showed his firm hand that gets things done.

        He allowed Peoples to add all the defendants it is suing to the list of defendants in the class action brought by Mr. Chesley and Mr. Voelker on behalf of the 211 homeowners.

        That might spur some action in the complex negotiations outside the courtroom about who is responsible for helping the innocent homeowners get clear title to their Erpenbeck-built homes.

        Peoples has initiated settlement talks with the banks and title companies, hoping to develop a plan to pay off the $16.7 million in diverted checks. Peoples has also said it is responsible for some but not all of that money as there were other banks and title companies at the closing tables.

        Despite at least two negotiating sessions, an agreement between the financial and home-building industry entities has been elusive.

        “In Peoples' case against 100 or so various defendants, that will be something to orchestrate in terms of pleadings, response times, the reading of briefs,” Judge Bamberger said. “It won't be easy to settle.

        “Some of those defendants, right or wrong, are going to feel like they have no responsibility” to pay on the checks, Judge Bamberger said.


Son of a butcher

               Judge Bamberger was raised in Latonia. He is the first cousin of Covington City Commissioner Jerry Bamberger. Like many people in the Covington neighborhood, he attended Holy Cross grade school and high school.

        While growing up, he worked at his father's butcher shop, Joe's Meat Market, on Vine Street near the University of Cincinnati.

        He earned a psychology degree from Xavier University and began working as a juvenile social worker for the Commonwealth of Kentucky.

        Judge Bamberger said that job was frustrating because of red tape, regulations and the difficulty people sometimes had after getting into the legal system.

        “That's when I decided to go to law school,” he said.

        After earning a law degree from the University of Kentucky, he opened a legal practice in Gallatin County in 1970. By 1976, he was practicing law in Boone County, and then in 1982, after working as an assistant commonwealth attorney, won his first and only contested election, claiming a seat on the Boone County District Court bench.

        In 1991, he was elected to circuit court and by next June will semi-retire by taking senior status, which means he will fill in when needed.


Polite, but no-nonsense

               Northern Kentucky lawyers say that during his early years on the bench, Judge Bamberger could be temperamental, although most agree he has mellowed.

        In his courtroom recently, as he handled about 60 cases on Boone County's criminal docket during three hours in open court, he was polite and respectful but stern to the two rows of handcuffed defendants — most dressed in standard jail garb — sitting before him.

        He wished one man luck after releasing him from jail, said another defendant didn't seem “too crabby” after missing his morning coffee and chided a man accused of failing to pay child support for his 5-year-old daughter.

        “Five-year-olds eat every day, sir,” the judge told the man.

        He often stands during court, an uncommon posture for a judge, his arms folded as he listens to lawyers make their cases and defendants tell their stories.

        During a recent hearing on the Peoples class-action suit, he rebuked a bank attorney for interrupting another lawyer.

        “I'm standing right here, listening,” the judge said, glaring briefly at the lawyer. “I'm surprised by you.”

        A resident of Oakbrook, a subdivision not far from the courthouse, Judge Bamberger is the divorced father of two grown children and the grandfather of two.

        Away from the courthouse, he enjoys walking, working out, reading, shooting pool and playing golf, often with attorneys who practice before him.

        For now, the Erpenbeck/Peoples case is not consuming a great deal of his time. Lawyers are filing motions and seeking preliminary rulings.

        “It's not taking a lot of time right now,” the judge said. “But it will.”


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