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Evans judge orders lawyers to get with the program

Banks want title company information in massive real estate fraud scheme

 

In federal bankruptcy court in Jackson in December, state banks fought with Mississippi Valley Title Insurance Company (MVT) for the release of the title company’s internal audit procedures and other information relating to the dealings of Charles Evans Jr. and his brother Chris Evans, who are accused of massive commercial real estate fraud in Mississippi.

Parties agreed that MVT would provide the following information to several state banks that have outstanding claims against the company: A list of properties insured by the title company; lien position status of banks on various properties; appraisals; chancery court filings in any county; and land surveys.

Judge Neil Olack also ruled that banks were entitled to information on the “historical relationship” between MVT and Charles Evans Jr., who was an approved attorney for the company. 

Olack said in a Jan. 14 filing that neither the lead bank asking for the information nor MVT had filed proper responses according to the guidelines and deadline he ruled on in December.

“Failure of counsel to agree on the form such a straightforward order is unacceptable,” Olack said in the filing. The Court rejected documents of both parties, said “further failure to comply with this court’s directives regarding submission of orders may result in the imposition of sanctions or other relief,” and reiterated the information discussed at the previous hearing.

More hearings concerning the complicated aftermath of the largest commercial real estate fraud in Mississippi history are scheduled for Jan. 28 and Feb. 19. Can I go ahead and say this? Everyone knows it’s the largest commercial real estate fraud in the state. Do I have to attribute this assertion to anyone?

At the December hearing several banks said MVT was “not talking” and being uncooperative in providing information. Merchants & Farmers Bank attorney Jeff Rawlings said his client wanted “what (MVT) knew, when they knew and why… This (case) has been going on since September, and we don’t know any more now than we did then — other than there were a bunch of bogus loans… They are way ahead of us.” Merchants & Farmers has filed a total of more than $6.4 million in claims against MVT.

Rawlings requested manuals, guidelines and procedures regarding internal controls of MVT via a Rule 2004 Examination.

Banks are interested in the knowledge of how and when MVT discovered that one of its approved attorneys, Jackson area resident Charles Evans Jr., was allegedly defrauding banks by issuing fraudulent certificates of title in a commercial real estate loan-stacking scheme totaling more than $40 million in damages. The alleged fraud began as early as 2003.

MVT filed its original lawsuit against Charles Evans Jr. and his brother Chris Evans in September 2009 in Madison County Chancery Court. Numerous bank lawsuits followed.

The Evans brothers were partners in a scheme in which Chris Evans obtained commercial property loans from Mississippi banks through his various limited liability companies and other entities. Charles Evans Jr. issued title insurance certificates for the loans. Land title for numerous commercial properties was never conveyed to the entities through which Chris Evans obtained the loans. As Evans’ companies defaulted on loans, banks realized the scheme and also realized they would be competing with other banks for the properties, or collateral. Banks are also seeking to recover their claims through MVT. 

MVT has only $30 million in claims reserves, which is not enough to pay the 65 claims made by more than 30 banks totaling more than $40 million. The company’s parent, Old Republic National Title Insurance Company (ORNT), jointly issued all of the company’s policies. ORNT has several hundred million in claims reserves.

Chris Evans filed for bankruptcy in October 2009, which moved the case to federal bankruptcy court.

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About Amy McCullough