Collection of all posts on the Evans case.
A federal court sentenced the Evans brothers to jail yesterday in the largest mortgage cause ever in Mississippi. U.S. District Judge Dan Jordan, III sentenced Chris Evans to 168 months and Charles Evans, Jr. to 240 months in prison for bank fraud and money laundering. The two brothers created over thirty companies to defraud over fifty banks to obtain approximately $80 million in mortgage loans. Assistant U.S. Attorney Mike Hurst said "It was a fair sentence for the Bernie Madoffs". Judge Jordan also imposed a three-year term of supervised release after imprisonment and forbade either man from obtaining a line of credit without approval.
The two brothers sat passively through the hearing- sullen and resigned to their fates. Chris Evans looked older, more gaunt, than he did when first seen a year ago. He had been free on bond. Charles Evans looked the same as he did then- shackled in orange, looking ahead into space while the proceedings whirled around him.
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. Chris used over 30 LLC's to obtain fraudulent loans from over 30 banks in Mississippi. Chris Evans would 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 did not exist as the larger tract was never subdivided. Charles provided a title certificate however showing the borrowing company owned the land even though it didn't. The brothers used other LLC's to borrow $27 million from Texas banks to purchase properties in the Dallas area. Note to Clarion-Ledger: Mr. Evans did not work for Mississippi Valley Title (I imagine Scott had a conniption when he saw that one. ;-) ).
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. Both Charles and Chris Evans filed Chapter 7 bankruptcy petitions. Mississippi Valley Title testified 65 title insurance claims for approximately $41 million have been filed by banks affected by the Evans case.
The court said the amount stolen was $27 million. This amount is not the same as the amount obtained through fraud by the Evans brothers. The Fifth Circuit ruled in U.S. v. Goss the damages for mortgage fraud cases had to be calculated after the property was returned to the lender and the value of the property was deducted from the amount gained through fraud (Example: Banks loans $100,000 to purchase a property. Borrower uses fraud to get loan. Bank gets land back but it is worth $80,000. Banks loss is only $20,000). The Evans brothers obtained $27 million in loans from Texas banks for properties in Texas. However, the Texas banks were able to foreclose on their collateral, thus mitigating the losses in Texas. Jackson Jambalaya reviewed the loans in an earlier post and exposed the fact the brothers had obtained over $80 million in mortgages.
Evans attorney John Collette made several objections to the loss amount, enhancement for using sophisticated means to commit fraud, and enhanced penalties for fraud. Judge Jordan overruled the objections as he said the brothers used over 30 companies to hide assets and agreed with the prosecution the fraud was a Ponzi scheme using banks and as an investment fraud it qualified for enhanced penalties.
An emotional Chris Evans told the court:
"When I first stepped across the line, I had good intentions. I never intended to hurt anyone, I got deeper and deeper. I was wrong, there is no excuse for it. I've disappointed society, my family and friends. What I did was wrong. Whatever is left of my life, if I can do anything constructive I will."
Charles Evans was more sullen and tight-lipped as he said "I accept full responsibility for what I have done. I was wrong."
That was his whole statement. No victims spoke but in a move that surprised everyone in the courtroom, bankruptcy trustee Derek Henderson addressed the court before sentencing. Mr. Henderson very forcefully told the court
"What offends me is these two are attorneys. They used their licenses as a member of the bar to do what they did. They want you to believe they did not line their pockets (Collette's argument)." Mr. Henderson said they abused the escrow account and lived off of it. He said although Chris Evans was compliant "they knew what they were doing, they were members of the bar, and that should offend this court" (Made me wish the bar would replace Kilgore and Waddell with this guy.).
Chris Evans will report to prison on February 21, 2012 at 12:00 PM. Charles Evans will remain in custody. Mr. Evans was arrested Memorial Day weekend in 2010 after he tried to reach for a gun in a gun bag when two marshals tried to apprehend him for for a bench warrant issued by the bankruptcy Court. Mr. Collette argued with a straight face if anything Mr. Evans "would have never pulled a gun on anyone" and if anything, "Mr. Evans was at risk." Several people in the audience fought to keep from laughing when hearing this statement. Judge Jordan said Mr. Evans actions during the arrest could be used to enhance the penalty. Judge Jordan also imposed an $18.5 million judgment against each brother
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