By Patrick Crowley
The Cincinnati Enquirer
Michelle Marksberry, one of the leading figures in the Erpenbeck home-building and banking scandal, is expected to plead guilty July 7 to federal charges for her role in the scandal.
Marksberry has reached a plea bargain agreement with federal authorities and is scheduled to appear that day in the downtown Cincinnati courtroom of U.S. District Judge Susan Dlott, according to the judge's court docket.
Details of the plea agreement were not available Wednesday. Marksberry's lawyer, Bob Carran of Covington, did not return phone calls seeking comment.
Fred Alverson, spokesman for the U.S. attorney's office in Cincinnati, said Wednesday that he could not comment because no plea agreement has been filed.
Home builder Bill Erpenbeck struck his own deal with federal prosecutors and pleaded guilty April 9 to federal bank fraud charges. He faces a maximum sentence of 30 years in prison. Because he is cooperating with authorities, his sentence will likely be shorter.
Erpenbeck, a founder and former owner of home builder Erpenbeck Co. of Crestview Hills, was accused of stealing more than $33 million by not depositing home closing checks. Instead, those checks were deposited into Erpenbeck Co. accounts at the now defunct Peoples Bank of Northern Kentucky, which was forced out of business last year because of its involvement in the scheme.
Erpenbeck "used the scheme to keep the company financially afloat because its spending exceeded its income," U.S. Attorney Gregory G. Lockhart said the day Erpenbeck pleaded guilty in Judge Dlott's courtroom.
Federal court records indicate that Marksberry attended closings and collected closing checks meant to pay off construction loans. Instead, she turned some of those checks over to employees at the Erpenbeck Co.
Also under investigation are former People's Bank executives John Finnan, who was president, and Marc Menne, who served as executive vice president. Federal authorities could be using information provided by Erpenbeck and Marksberry to pursue charges against the bankers.
"We've assumed John Finnan was a target from day one ... before Erpenbeck entered his plea and Marksberry negotiated hers," said Cincinnati lawyer Richard Goldberg, who represents Finnan.
Covington lawyer Harry Hellings, who represents Menne, had no comment about Marksberry and said he has had little contact with the U.S. attorney's office about the case.
In a related development, vacant lots in The Steeplechase subdivision in Richwood, which was still being developed when the Erpenbeck Co. went under last year, might soon have a new owner.
Boone County Administrator Jim Parsons said Wednesday that a developer is negotiating with the project's lenders to buy the land and complete work in the community that the Erpenbeck Co. started or had pledged to do. Steeplechase is located just off Richwood Road near Interstate 75.
Parsons said that because negotiations are continuing, he could not name the parties involved.
"The banks involved are trying to get this resolved and sell off the remaining parcels for someone to come in and complete the subdivision," Parsons said.
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