Centennial, Allied Banks Among Largest Victims

Centennial Bank of Conway lost $5.64 million in former attorney Kevin Lewis’ bond scam, and Allied Bank of Mulberry lost $3.25 million, according to Lewis’ plea agreement, which was released by the U.S. Attorney’s Office Aug. 4.

r

Lewis, 43, of Little Rock, pleaded guilty Aug. 3 to a single count of bank fraud totaling between $20 million and $50 million.

r

The largest loss, $22.7 million, was suffered by First Southern Bank of Batesville, of which Lewis was the majority shareholder. It was shut down by the Federal Deposit Insurance Corp. in December and its operations sold to Southern Bank of Poplar Bluff, Mo.

r

Centennial, which had acknowledged its exposure, took the second-biggest hit. Allied, which had not publicly confirmed its exposure to Lewis’ bonds, was next among the nine banks that either bought Lewis’ phony improvement district bonds or allowed him to use the bonds as collateral on loans.

r

Alex Golden, CEO of Allied Bank, confirmed to ArkansasBusiness.com that his bank accepted the bonds as collateral on loans.

r

“We didn’t buy any of his bonds,” Golden said.

r

Golden also said Allied had reserved against the loss in the fourth quarter of 2010 and doesn’t expect further impact.

r

The other banks and their losses listed in the plea agreement are:

r

• First Community Bank of Batesville, $2.08 million;

r

• Liberty Bank of Arkansas, $1.37 million;

r

• Citizens State Bank of Bald Knob, $894,628;

r

• Regions Bank of Birmingham, Ala., $541,579;

r

• Bank of Augusta, $442,225; and

r

• Simmons First National Bank of Pine Bluff, $361,583.

r

First State Bank of Lonoke was also victimized by Lewis, but it neither bought his bonds nor accepted them as collateral and is not listed as a victim in the plea agreement.

r

Instead, First State loaned Lewis $7.6 million secured by stock in First Southern Bank — collateral which became worthless when First Southern failed. Central Bank of Little Rock participated in that loan and lost $2.5 million.

r

The plea agreement also lists assets that Lewis agreed to forfeit:

r

• A refund check of approximately $9,000 from his former homeowners’ insurance policy;

r

• A 2010 Mercedes-Benz vehicle, model not specified;

r

• Residential properties at 6815 W. 34th St. and 10809 Kanis Road in Little Rock and at 412 Libby Lane and 5821 Sonora Drive in North Little Rock.