JACKSON — The Evans brothers were sentenced on Dec. 19 in U.S. District Court on charges of conspiracy to commit money laundering and bank fraud in what is the largest known commercial real estate fraud scheme in Mississippi history. Charles Evans Jr., 57, received 20 years in prison, and Chris Evans, 53, got 14 years.
In January the brothers pleaded guilty to the charges related to a Ponzi scheme in which banks were used as investors. Using almost 30 shell companies, the brothers purchased commercial properties in DeSoto, Madison and Harrison counties then falsely subdivided them and stacked mortgages on each subdivided tract. The brothers also purchased properties in Texas and Tennessee.
The six-year scheme involved nearly 50 banks and loans totaling more than $80 million. The total collective loss due to the scheme is more than $25 million. Each brother received a judgment of $18 million, although both of them are broke. Authorities determined the brothers spent all the stolen money on themselves and loan payments.
When Judge Daniel Jordan gave the brothers opportunity to speak, both accepted responsibility for their actions.
Chris said: “When I first stepped across the line, I had good intentions … It turned into a nightmare. … Whatever is left of my life, if I can do anything constructive with it, I will dedicate it to righting the wrongs that I’ve done.”
According to a court filing, the brothers began their scheme in 2003, in order to pay down debt they owed on Gulf States Publishing, a metro Jackson phone book company started by their late father.
Charles said: “I accept full responsibility for what I’ve done. I don’t deny a bit of it. I accept whatever the court decides needs to be done.”
Their comments were followed by those of Derek Henderson, U.S. Bankruptcy Court trustee, who spoke on behalf of all the creditors who had made loans to the Evans brothers. Henderson said he was offended and thought the court should be offended that the Evans brothers were both attorneys. They used the knowledge and access they had as lawyers to commit their crimes, and “I think the court should take that into consideration when sentencing them,” he said.
In December 2010, more than a year after news of the fraud surfaced, the U.S. District Attorney filed criminal charges against the brothers.
The scheme surfaced when the brothers missed loan payments. 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. Many banks also sued the brothers. The lawsuits were moved to U.S. Bankruptcy Court after Chris Evans filed for bankruptcy about a month later.
While Chris cooperated with the court and authorities, Charles did not. After numerous failures to appear at bankruptcy court Charles was found by U.S. Marshals in May 2010 at the Metro Center Mall in Jackson. He resisted arrest and reached for a loaded gun. He has since been held in Madison County jail. The case for that action is pending.
Chris Evans is set to begin his prison sentence Feb. 21.