Court: Feds didn't properly seize Erpenbeck cash

CINCINNATI - A federal appeals court ruled that prosecutors didn't properly seize a cooler containing $250,000 in cash from convicted fraudster A. William Erpenbeck.

The ruling, issued Thursday by the U.S. 6th Circuit Court of Appeals in Cincinnati, means that the tug-of-war over the money will continue for the immediate future. Federal prosecutors want to pay restitution to victims. A bankruptcy trustee in Ohio is seeking the cash to pay creditors.

Judge Jeffrey Sutton wrote that prosecutors did not properly notice the forfeiture proceedings, requiring overturning the final order giving the government the money.

Erpenbeck is former president of Edgewood, Ky.-based Erpenbeck Development Co., one of the largest housing developers in the Cincinnati area. He pleaded guilty to bank fraud and conspiring to obstruct an official investigation. He's serving a 25-year sentence.