Tuesday, November 3, 2009

Evans update: Were there phony signatures and loans to a non-existent company?






















Lynne Knight was listed as either a registered agent or Manager of several LLC's owned by Chris Evans. Ms. Knight has sent a letter to the Mississippi Secretary of State requesting her name be removed as an agent for Highland Colony Investments. Copy of request.

What is interesting is if you examine her signature for all the documents above related to Mississippi companies (bottom two rows) and compare them to the signatures on documents in the top row, you will notice they don't exactly appear to be identical. The documents on the top row are a deed of trust for a loan given to Riverbend Group LLC in Texas by Swisher for over SIX MILLION dollars. The next document is an extension of the loans. Unfortunately for Swisher, the loan is currently in foreclosure proceedings.

There is no evidence Ms. Knight signed any loan documents in Mississippi and JJ has so far determined she was only a registered agent for several companies and didn't actually participate in any Evans activities or operations. Unfortunately for Ms. Knight, it appears someone else signed her name to loan documents over in Texas.

JJ's review of these documents uncovered another disturbing fact. One of the companies Ms. Knight was a registered agent for was Colony Developers, Inc. The company was dissoved in 2004. Everyone get that? 200-friggin-4. The Secretary of State's office confirmed the dissolution and when it occurred this morning in a phone call.

Despite the fact the company no longer existed, Merchants & Farmers Bank and Madison County Bank STILL granted it commercial real estate loans over four years AFTER the company dissolved. According to this Deed of Trust issued to Merchants & Farmers Bank by Colony Developers, Inc., M&F issued a loan to the then-dissolved company for $169,680 on July 3, 2008, over FOUR YEARS after the company was dissolved. Another Deed of Trust was issued for a $183,490 loan given to Colony Developers by Madison County Bank on March 6, 2009, FIVE YEARS after the company ceased to exist.

Did anyone at either of these two banks ever hear of the concept of due diligence? It is standard practice in mortgage lending to check out companies that apply for loans. The loan officer will perform such functions as checking credit, verifiying tax returns and bank statements, and then actually checking to see if the companies actually exist. The standard procedure for this is to.......drum roll....... call the Secretary of State's office or look up the company on its website. Underwriters will also check the phone book to see if there is a listing for the company and require a copy of a current business license. Although the banks probably required a personal guarantee from Mr. Evans, this is still sloppy underwriting and that is putting it mildly.

The Evans case continues to provide more surprises.


Related posts:
Over $74 million in loans issued in Mississippi & Texas
FBI contacted MVT, MVT lawyer calls Evans case "Biggest fraud to hit Mississippi since Worldcomm
Nearly $42 million in loans issued to Evans' brothers in Madison County (Itemized list)
Tempest in a teapot or record-breaking fraud?
Banks issued nearly $10 million to Evans brothers in Desoto County
Evans case update on court filings

32 comments:

Kingfish said...

bear with me. am working on a post and had to see how the pics line up.

Anonymous said...

The last signature looks like Charles' handwriting...

Anonymous said...

Agreed, very little doubt the last signature appears to be Charles'.

Anonymous said...

Those loans are no good. They will eat them.

Anonymous said...

The (allegedly) forged signatures are a special case, but in the other cases, does MS Valley Title have a defense to title claims based on sloppy loan underwriting? I know that title insurance companies in other states have denied coverage because the loan underwriting was so sloppy that the title company took the position that the loss was caused by the lender.

Anonymous said...

A signature on a deed of trust has to be acknowledged. If these signatures are forgeries, then the notary either wasn't diligent in checking IDs or was complicit. Notaries have to carry insurance, but it's a nominal amount.

Anonymous said...

Speaking of sloppy, ALL BANKS and TITLE COMPANIES (meaning their 'approved attorneys' or 'issuing agents' also) must comply with the Patriot Act. Think that would mean 'no comply' ... 'no title insurance' coverage.

Kingfish said...

I've seen underwriters fired when this happened.

Anonymous said...

Wow. This is good stuff.

Anonymous said...

Kingfish......we'd nominate you for a Nobel prize but...well, you know...sigh........

Anonymous said...

loans no good? that's a red herring. money was loaned and accepted. if not a corp (lots of gray areas here, type of dissolution, reinstatement, etc.), then it defaults into a d/b/a and loan is enforceable regardless. the issue is title. all that matters is who owned it and who had a lien on it. and thats what title insurance is for.

Anonymous said...

If you would like to compare Charles Evans actual handwriting to the forged signatures of Lynne Knight, go this link and scroll down to page 6. There you will see Charles Evans' signature. Also, please note that Charles is a NOTARY PUBLIC, and notarized his own brother's signature. Hummmm.
Here is the link, and thank you, Kingfish.

http://jackson-jambalayaevans-case.googlegroups.com/web/First+Bank+%26+Trust+deed+of+trust+-harrison+county.pdf?gda=KnEme2oAAADYHthkd-DMvANMmObIiQ8nUZTHfDO1x5_2rOPD92anRD-gSjbM4ODxzmixdQhTLlalTafP21pYw2mj0zyICSWF2m2Ys5MJhb_NPsTPF9_wdd7Gt5tQROqgsooDF0496B797daDQaep90o7AOpSKHW0&gsc=JUoc2wsAAADe3bKij213TvVTlS-r7JEq

Anonymous said...

TO 1:58 ANONYMOUS... Loan made to an entity that did not exist, that more than likely is on tract of land owned by a corporation/llc that did not exist. And NOW we have alleged forged signatures like a cherry sitting on top. No doubt there was a loan made but bank might as well have piled up cash for the face amount of the loans in the center of their lobby and set the pile on fire. As far as if those loans are covered by title insurance now or not, that's hilarious.

Anonymous said...

Charles' very distinctive handwriting can also be recognized as he appears to have forged his brother's signature on two different LLC's -- Madison Avenue and Snowden Grove. Please note how he even misspells his brother's name on one of the documents, spelling it "John" instead of "Jon".

Anonymous said...

It is comical to suggest that the title company might try to blame almost $100 million in fraud against 30 banks in MS for a period of 5 years on "sloppy underwriting", against what looks to be the entire banking community of MS.

That begs the question of just WHOSE "sloppy underwriting" it was? I would say that whoever signed all those commitments and policies for 5 years and collected all the premiums and binder fees might have more than a little culpability in the "sloppy underwriting" department.

Keep in mind that the title company PREPARED EVERY commitment and policy instead of just the few that any individual bank may have seen. Did the title company put requirements in the commitments to confirm that the borrower was licensed in MS and in good standing? That is usually a part of the commitment on every commercial transaction - wonder why it wasn't a requirement in these commitments, or if it was what happened?

I wonder if this means that it is going to be the lenders vs the title company from this point forward - since there has been no news on this other than Mr, Fish, we really don't know that yet, but the beginning of apologetics creeping into the comments is interesting to note.

Sheesh! I wonder how big this thing really is!

Anonymous said...

Execellent research and reporting, Kingfish! I really want to understand why the MSM isn't reporting on this at all. Are they waiting for more information to break? Are there "Powers That Be" that are pressuring local media not to pick up this story of epic proportions? What about the national media? I know there are many layers to this onion, and it will have a negative impact to many, but how does a fraud case potentially worth $100 Million NOT get covered?

Anonymous said...

Anyone besides lil ole dumbazz me smell the faunky air of um, er, ah, collusion, perhaps?

Anonymous said...

Sheesh! I wonder how big this thing really is!

Exactly. How much of the iceberg remains invisible under the surface.

Anonymous said...

Jon or Chris was seen entering his office this afternoon. I understand he is claiming ignorance and says Charles did this without his knowledge.
Charles is the only one missing.

Anonymous said...

If what you say is correct and the title insurer themselves prepared every title commitment and policy; rather than Evans as an "approved attorney" or "issuing agent" doing so (which is customary and normal procedure for an issuing agent to do in his/her office) then it sheds a whole new light on my perspective of this train wreck.

Kingfish said...

I would say on these two loans MVT might have an exclusion and frankly, I think they should have one. Might teach the banks a lesson in how to underwrite properly.

Anonymous said...

It would be interesting to review a title policy to one of the subject properties. I could not find a link to an actual title policy - is one available? Thanks.

Anonymous said...

November 3, 2009 7:10 PM:

Only "issuing agents" and the Company itself prepare commitments and policies; "approved attorneys" are only authorized to examine titles and close transactions.

Charles Evans was/is an "approved attorney" of the title company as the title company claimed said in open court and in their pleadings.

Anonymous said...

Nov. 3 @ 5:48...so word is Chris is saying he knew nothing of what Charles was doing???? WOW! That is just so unbelievable! No way! So much for brotherly love!

Anonymous said...

It doesn't seem comical to me at all that the title company might have a defense against a claim by a bank whose sloppy underwriting contributed to a loss. If the bank is going to rely on title work by an interested party (Charles), allow an interested party (apparently Charles) to notarize the documents, and then make a loan to a dissolved company, and disdain any legal representation, then I think that many people would conclude that the bank contributed to the loss. I believe that there is a standard exclusion in title policies for matters "known, suffered or caused by" the insured or something like that.

Anonymous said...

A title insurance policy insures the priority, validity and enforceability of a deed of trust on a particular tract of land, among other things.

Since the title policy insures "validity", care is always taken to make sure that the borrower is a "valid" entity, particularly in commercial transactions. The bank is counting on being INSURED of those things, among many others, via the title policy and therefore the title company MUST confirm that the corporate entity exists, is qualified to do biz in MS and is in good standing!

Maybe banks do that also, but for sure the title insurer is in the business of insuring the "validity" of the deed of trust and having a failure of the entity is a really big mistake for the title company, whose business it actually is to confirm these things and INSURE them.

Additionally, most banks will not let attorneys close loans for them unless they have an insured closing protection letter covering the bank for fraud, etc of the attorney. So the banks would not even fool with this guy unless a title company vouched for him with a closing protection letter, which protection lasts for the life of the loan.

Are you suggesting that title companies get a free ride and don't even have to examine the title if they can accuse a bank of "sloppy underwriting"?

I would be interested in exactly what you think a bank should be able to expect from a title company when the title company prepares a policy on its loans. Is it's title policy worth anything?

Anonymous said...

I am a 20 year veteran real estate closer. I work for an 'issuing agent'. I prepare and issue all of title commitments and policies which my boss (attorney) signs. We close the transactions here in our office. We rely on title work done by a title searcher approved by our title insurer. If we do not perform according to the rules and regulations as setforth under our Agency Agreement and/or the insured closing letter....it is my boss' neck on the chopping block...not our title insurer. There is no title insurance coverage. The lender goes after the attorney. The title insurer drops him like a hot potato.

Now I might be hard headed but I refuse to believe (no matter what the court docs say or was stated in open court) that Evans was an 'approved attorney' for MVT. I think he was an issuing agent. The titles are easily confused and have been used incorrectly over the years.

On the other hand, if he was indeed an 'issuing agent' after all....guess what??? Issuing agents cannot issue or sign off on title commitments or policies for transactions that involve a family member etc... or any entity in which they have a controlling interest.

Regarding 'sloppy underwriting', if a bank is doing a loan for an entity, I have yet to see a bank not want to see an operating agreement for an LLC; a corporate resolution and charter for a corp., or a Certificate of Good Standing from the SOS.. for the entity. I will not close without same.

Nor have I ever closed a transaction whatsoever without acceptable photo ID presented by all parties. I don't get that ID and confirm the identity...once again, my boss eats that transaction, not our title insurer.

Rules and regulations are meant to be followed. Just ask the title company Gods!

Kingfish said...

Excellent comment. Excellent.

As for what I think, I think the bank should suffer a hit from sloppy underwriting. I have a problem with a bank approving loans to a non-existent company than sticking it to the title insurance company. If the insurance company screwed up, then maybe they should split the loss but I don't think the bank should be absolved either.

Anonymous said...

Charles and Chris had a separate office that no one knew about at 4450 Old Canton Rd. Highland Bluff North office building.

Every employee of Gulf States Directory knows they were hand in hand at what they were doing. They discussed every deal at length and I was present for many times that Charles signed for Chris. Also, Charles had his secretary made a notary for Rankin County. He then months later produced a stamp for the same secretary for De Soto County without her knowledge or consent. Lynne Knight was not present for at least one time when she was named the agent for the LLC. I don't belive she had prior knowledge of what was going on.

Anonymous said...

The brothers terminated everyone's employment at Gulf States on Aug 21st. Then due to several employees threatening suit, they re-hired a small portion to present the facade they were still operating. They will not pay for the phone books they had printed for Rankin County, they will not reimburse the customers, and there is no money in their accounts. I believe Gulf States was the only company that did not have their assets frozen. However, if they knew the wealth of information located at Gulf States Directory, I believe they would shut it down immediately.

Anonymous said...

I know, personally that the above information is accurate.

Kingfish said...

Well, the MBJ reported about the problems at Gulf States Directory as well so I would say you are on solid ground. ;-)



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