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First of all, let me clarify this point. This page is detailing a common
fraud used today by crooked homebuilders to get bank financing. I am not in anyway saying or implying that Finke Homes,
Inc. is now or in the past engaged in this activity. At this time, I have no evidence to substantiate any claim they have
done this. Although, I am working hard to find the proof. This page is merely outlining a common fraud commited by builders and they all know it. In most cases, the banks
are in full knowledge that it is taking place, however, they continue to let it go on dispite the fact that it is a crime.
Here is how it works;
The homebuilder conspires with a friend or trusted "relative" to sign a contract
and pay the earnest money for the builder to build a home. In some cases, these funds are merely fronted by the builder. All
the paperwork is completed and the information is passed on to the bank "buddies" that handle the builder's commercial
account. In the Erpenbeck's case the criminal co-conspirators were John Finnan and Marc Menne of People's Bank.
The bank, in turn, gives the homebuilder a construction loan to start the
contruction of the home based on the fraudulant scheme. During the various phases of the construction process, the homebuilder
will take a "draw" on the loan. Sometime during the construction process the homebuilder pays off the friend or "relative"
by returning the earnest money plus their "interest" on the "investment." However, this fact is never revealed to the bank.
Builders, of course, are using a myraid of banks to pull the scheme off. The Erpenbeck scandal did have an impact of the
fraud. Builders now take the fraud to a wide selection of banks to carry out the fraud. The banks like this because it spreads their
their risk. No bank wants to be left holding the bag when the house of cards fall. You can see the evidence by reviewing the court
records of the banks holding mortgages over the loans. A builder will have loans from every lending institution it can lobby for funds.
to keep the business afloat. Fifth Third clearly doesn't mind making risky deals with their deposits. I have seen some shady and
reckless lending practices. Fifth Third will jump into bed with any crooked business and lend money based on the
ridiculous security for the risk of those despositor' funds.
The homebuilder continues to build the home and taking draws during the process.
It should be noted that the draw on the loan is to pay off the subcontractors performing the work on the home up to that point. However, we know now that
homebuilders are not paying off the contrators for services rendered. They use the funds to float the business expenses of
the
crooked business practices. The money is being used for Cincinnati Red's season tickets, strip club patronage, business
owners personal expenses like auto and mortgage payments. Maybe a couple of contractors get paid off. But, since the banks aren't requiring the builder to account for the funds and document the expenditures, the homebuilder is not held accountable for anything.
At the end of the construction process, the homebuilder comes to the bank and informs
of the orginal customer's failure to follow through with the transaction. I'm sure they have a whole list of reasons of how and why it
occurred. In fact, it wouldn't suprise me that a list of reasons is probably available to them by the Home Builder's
Association exclusively for their membership.
At this time the builder merely puts the home on the market for sale. In some cases
it may even be transfered to another entity to shift the asset off the books of the builder below fair market value. Do you see
where this is going? The accountants get it. Of course it is great if these entities are owned by close friends and
"relatives" that might even kick back some of these funds to the homebuilder when the property is sold. This is another
method of fraud that transpired between Erpenbeck and his criminal co-conspiritors.
Here is the sad thing about the entire crooked homebuilder banking relationship /
criminal enterprises. We know it's going on. Obviously the homebuilder and the banks know its going on. Lawyers & lawmakers know its going on. The Commonwealth of Kentcuky Attorney General knows it is going on. All the county attorney and
judges know its going on. But, yet none of them are doing anything to put an end to it. Thousands of contractors, employees
of these contractors, and homeowners are affected by this crooked enterpise and yet we have no consumer rights against
this corruption. Why? The banks and homebuilder associations throw millions of dollars into the campaign coffers of
politians (judges, county attorneys, and law makers). Who is representing you? No one. What lobbying effort is buying off
the politians to protect your interest?
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