Kenwood Towne Place criminal trial delayed until December

Defendants lining up against Matt Daniels

CINCINNATI -- Federal prosecutors have delayed this month’s scheduled trial for Matt Daniels, the Kenwood Towne Place developer who was indicted for bank fraud last November in connection with one the region’s highest-profile real estate failures.

The schedule change followed a request by the project’s former construction manager, Aubrey “Audie” Tarpley III, to separate his criminal case from that of his former boss. Tarpley was indicted in mid-August. He and Daniels were slated for trial jointly on Sept. 30.

Tarpley’s attorney, Ty Foster, said in a Sept. 13 motion that he “simply cannot be prepared for such a complex and complicated trial in this short a period of time.” He added that his defense is likely to be "antagonistic" to Daniels' defense, so he wants separate trials for the defendants.

Kenwood Towne Place was a $175 million office and retail project where contractors walked off the job in late 2008 because they weren’t being paid. Bank of America filed for foreclosure in May, 2009, triggering one of the most complicated civil cases in Hamilton County’s history.

The property was sold at a sheriff’s auction last summer. An affiliate of Phillips Edison & Co. is trying to complete the project with a new leasing plan and a new name, Kenwood Collection .

The former chief financial officer of Kenwood Towne Place LLC, Tina Schmidt, has reached a plea agreement and is expected to testify against her former boss, Matt Daniels. Tarpley told WCPO in May that he didn’t take part in the fraud.  

"I never submitted one false document to anybody. Period," he said.

But he was named in a superseding indictment in Daniels’ criminal case on August 15.

Daniels waived his right to a speedy trial at a court hearing Friday, allowing U.S. District Judge Michael Barrett set a new trial date for December 2. Barrett has not yet ruled on the motion to sever the two defendants’ cases.

“This construction project has been the subject of protracted civil litigation since 2009,” wrote Tarpley’s attorney, Ty Foster. “Upon information and belief, over one million documents  were generated and many, if not all, of these documents have been provided to the government and are part of the discovery in this matter. Complicating this complex matter, the allegations of conspiracy to commit fraud are subtle and nuanced.  These defendants did try to build a building.  They hired subcontractors, issued payments, had the work inspected, etc.  Apparently somewhere along the way, according to the Government, this turned from a construction project into a fraud scheme. That point has not been defined.”

Foster said his client did not “apply for bank loans, receive loan proceeds or issue checks.” He added that there is a “strong likelihood” that Daniels and Tarpley will present “antagonist defenses” against each other.

“Tarpley was the construction manager,” Foster wrote. “He did not handle the finances or write checks.”

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