On Dec. 16 the U.S. Attorney for the Southern District of Mississippi charged each of the brothers with conspiracy to commit money laundering and bank fraud. The punishment for bank fraud is a fine of up to $1 million and prison time not to exceed 30 years.
The new lawsuit marks the first criminal charges that have been filed relating to the brothers’ alleged fraudulent commercial real estate activities, which did approximately $40 million in damages to Mississippi banks, according to bankruptcy court filings.
The first civil lawsuit was filed in September 2009, in Madison County by Mississippi Valley Title Insurance Company, for whom Charles H. Evans Jr. was an approved attorney. Numerous banks have also sued the brothers. The lawsuits were moved to U.S. Bankruptcy Court after Chris Evans filed for bankruptcy.
The 51 banks listed as victims in the new lawsuit include 22 in Mississippi, 14 in Texas and others in Alabama, Florida, Louisiana, North Carolina, Oklahoma and Tennessee.
The suit states that Charles H. Evans Jr. and his brother Chris devised a plan to fraudulently secure bank loans by misrepresenting legal descriptions, title and lien history and ownership of real estate that they were intending to purchase.
These activities began in 2003, in order to pay down debt the brothers owed on Gulf States Publishing, the suit states. Gulf States is a metro Jackson phone book company started by their late father.
The suit explains the alleged fraud:
The Evans brothers “began their scheme by contracting to purchase multi-acre tracts of land. However, before actually purchasing and acquiring a warranty deed for such multi-acre tract, the Defendants would covertly and fictitiously subdivide the multi-acre tract on paper and fraudulently manipulate the legal descriptions and title history of the property, and sometimes manufacture false warranty deeds, in order to secure mortgages on the individual, subdivided plots of land from multiple banks using various companies owned and controlled by the Defendants. Based upon these fraudulently manufactured documents and misrepresentations, the scheme resulted in the Defendants receiving a larger aggregate amount of money for the land fictitiously subdivided than would have otherwise been made available to them if the entire tract had been financed legally via a single loan from one financial institution.”
The brothers began their scheme with property in Madison County but eventually expanded to the Gulf Coast, Southaven and the state of Texas, according to the suit.
Charles H. Evans Jr. was arrested by U.S. Marshals in May after numerous failures to appear at bankruptcy court. He resisted arrest and is being held in the Madison County jail.