Attorneys for Mississippi Valley Title, the Bank of Forest and Heritage Bank gave opening statements yesterday for the long-awaited Evans trial in U.S. Bankruptcy Court for the Southern District of Mississippi.
Judge Neil Olack will rule on the case. There is no jury, and proceedings will continue through Friday (March 4).
The $40 million commercial rest estate Ponzi scheme perpetrated by Charles Evans Jr. and Chris Evans, both of Jackson, began to unravel in September 2009. Chris declared bankruptcy shortly thereafter, and all lawsuits were moved to bankruptcy court.
The brothers stacked mortgages on parcels in Madison, Harrison and DeSoto counties and scammed more than 30 banks statewide.
Banks are trying to get more money for their claims and prove that MVT engaged in fraud.
MVT says the company is just as much of a victim in the case as the banks.
MVT attorney Bill Brabec said about $16 million has already been paid in claims. Last time the Mississippi Business Journal checked, MVT has around $30 million in its claims reserves.
Brabec said title insurance policies are contractual agreements that cover defects in title; they don’t act as insurance for loans.
“What’s happening here is both Bank of Forest and Heritage Bank are trying to obtain loan insurance to cover their loan deficiencies,” he said.
He worked for us, but not really
Charles Evans Jr. was an approved attorney for MVT who wrote more than 100 title policies for the company.
Brabec noted the distinction between approved attorneys and title agents. MVT will accept the work of approved attorneys, who are pre-approved to submit applications to MVT for policies. However, they are not agents licensed with the state of Mississippi. Agents are authorized to act on behalf of the company in issuing title commitments and policies.
What the banks had to say
The banks cross-examined two MVT employees who explained that they relied on Evans’ work and didn’t check the certifications he presented after doing title research.
Parrish Fortenberry, vice president for senior claims and title counsel, said MVT does not supervise approved attorneys. MVT runs a background check on them before putting them on a list of those approved.
Read previous MBJ stories on the Evans fraud here.