Jackson Jambalaya

For a collection of all posts on Evans case, click on Evans page in "JJ Special Coverage" section on the right.

One question to be asked in the Evans case is how much responsibility does Mississippi Valley Title Insurance Company bear? The Evans case is (allegedly) the largest real estate fraud case to ever take place in Mississippi. A multitude of lawsuits and exhibits allege Charles Evans used his position as an approved attorney for Mississippi Valley Title Insurance Company to issue phony title certificates and mislead over two dozen banks into issuing large commercial real estate loans on land the borrowers did not even own.

An approved attorney for a company such as Mississippi Valley Title is allowed to issue title certificates on land and little else. He is not a title insurance agent as most real estate closing attorneys are and collects no commissions on sales of policies. The lawsuit filed by G&B Investments against Mississippi Valley Title and its parent Old Republic raises the issue of whether Mississippi Valley Title was negligent in supervising and auditing Charles Evans. Complaint, Earlier post on G&B complaint

G&B pointed out in its complaint Mississippi Valley Title approved received title certificates and applications from Charles Evans with the signatures of both Charles and Chris Evans (A copy of the exhibit is posted below). The dates of the submissions and the Evans-owned companies are:

6-9-03 Highland Development Group
2-9-05 Snowden Grove Investors
2-8-06 Highland of Ridgeland
10-27-06 Old Agency Business Park
11-15-06 Madison Avenue Development Company
12-19-06 Madison Avenue Development Company
11-7-07 463 Development Co.
11-30-07 Parkway Crossing
1-10-08 CE Development
7-8-08 Cedar Lake Investors
7-8-08 Snowden Lane Investments

JJ obtained a copy of another similar submissions: 9-17-08, White Oaks Investment. Ironically White Oaks is one of the defendants in the G&B lawsuit.

The exhibits all run in similar fashion. The first page is a request for final title endorsement application and attorney's final title certificate. The second page is the final certificate (of title) and always has the signature of Charles Evans. Attached to each application are two exhibits submitted by Charles. The exhibits are various forms of property descriptions and in most case have the signature of Chris Evans at the bottom of one of the page (His initials are signed at the bottom of one description.). Mississippi Valley Title thus received a dozen applications with the signatures of both Charles and Chris Evans.

A basic rule of underwriting, any type of lending or insurance underwriting, is the transaction must be at arms-length so as to prevent any fraud from taking place. Arms-length means the parties must not be related. Most fraud cases have several common characteristics. The most common of the common is probably parties related to each other. Whether it is same names on purchase agreements, appraisals, loan applications, and title insurance policies, the rule remains the same at most financial institutions: all transactions should be conducted at arms-length and if the parties are related, the underwriter must explain in writing why the transaction is allowed to proceed. Whether or not that is the practice at Old Republic remains to be seen but it is the practice in the industry.

Mississippi Valley Title strongly opposed turning over to several banks its policy manuals in a hearing earlier this year (Earlier post). It claimed the information was proprietary in nature and could be used by its competitors. The question must be asked if Mississippi Valley Title was resisting so fiercely because its underwriting practices in this case might deviate from its established policies and procedures on arms-length transactions. If such is indeed the case, then one can easily imagine several other parties will be very interested in pursuing similar action against Mississippi Valley Title. What is clear is a pattern developed: Charles Evans submitted a series of applications to Mississippi Valley Title over a period of five years containing the signatures of both Charles and Chris Evans. The question raised by the lawsuit is whether the applications constituted sufficient notice to the title insurance company fraud took place.






Synopsis of Evans case:
Charles Evans, Jr. was an attorney approved by Mississippi Valley Title Insurance Company to provide title certificates to MVT and lenders showing a borrower had clear title to property. MVT filed a lawsuit in September accusing his brother of using over 30 LLC's to obtain fraudulent loans from over 30 banks in Mississippi. Chris Evans would allegedly use one company to purchase a large tract of prime commercial real estate in Madison and Desoto Counties. Another company owned by Evans would obtain a commercial real estate mortgage on a smaller section of the tract yet that borrowing company never obtained a deed showing ownership of the land from the other company. Thus the smaller tract was actually non-existed as the larger tract was never actually subdivided. Charles would allegedly provide a title certificate however showing the borrowing company owned the land even though it didn't.

Over 80 loans for nearly $50 million were issued by Mississippi banks to companies owned by Chris Evans for lands those companies either did not own. MVT has testified federal authorities are currently investigating the case. Chris Evans filed Chapter 7 bankruptcy on October 26, which stopped the Mississippi Valley Title's lawsuit against him as federal bankruptcy law stays most state civil court proceedings once a bankruptcy petition is filed. Mississippi Valley Title testified 65 title insurance claims for approximately $41 million have been filed by banks affected by the Evans case.