U.S. Attorney Chris Thyer announced a deal today with businessman Kevin Lewis who has plead guilty to a felony charge of bank fraud in a $47 million scheme that led to a federal takeover of one Arkansas bank and fraudulent bonds at several others.
Lewis, a licensed attorney in Arkansas, operated several businesses throughout the state in addition to running his law practice. Lewis primarily concentrated on developing property owners’ improvement districts and issuing special assessment bonds to fund those districts.
Between 2008 and 2010, Lewis concocted a scheme to sell fraudulent bonds to First Southern Bank of Batesville in an attempt to takeover a controlling interest in the financial institution. Lewis borrowed money to buy ownership in First Southern stock by using loans from other banks backed by fradulent bonds with First Southern.
The institutions that provided loans to Lewis which were collateralized by fraudulent bonds included: Centennial Bank, Citizens, Liberty Bank, First Community, Allied, Simmons, and Regions Bank. The collapse of the scheme led to First Southern being taken into receivership by the federal bank regulators.
“This case demonstrates that the actions of one individual can have far-reaching, detrimental effects, including the collapse of a financial institution,” said Thyer. “The amount of fraud loss in this case is one of the highest in the history of our office. Fraud, whether of this magnitude or not, cannot be tolerated, and the Department of Justice will aggressively investigate and prosecute such schemes.”
The statutory penalty for bank fraud is not more than 30 years imprisonment and a fine of up to $1 million. Lewis remains free on his own recognizance pending sentencing, which will be set for a later date.
