LITTLE ROCK, AR (KAIT) – A Little Rock attorney Wednesday pleaded guilty in federal court to a $47 million bank fraud scheme involving a Batesville bank.
According to the U.S. Department of Justice, at a plea hearing held in federal court, Kevin Harold Lewis admitted that between December 2008 and September 2010, he sold approximately $23 million worth of special improvement district bonds to First Southern Bank.
Prior to the purchase of each bond, Lewis said he provided the bank with documents describing the details of the bond.
At the plea hearing, Lewis acknowledged the bonds were fraudulent.
Sometime around August 2009 Lewis purchased a controlling interest, approximately 53 percent, in the bank. To facilitate the purchase, he borrowed $4.6 million from First State Bank in Lonoke.
According to the federal court documents, in September 2010 Lewis purchased an additional $5.5 million in First Southern stock which increased his ownership to 64.9 percent. To facilitate this purchase he used funds from the sale of two fraudulent bonds to First Southern Bank.
After learning of the status of the bond sales, First Southern Bank was forced into FDIC receivership.
Several other financial institutions provided loans to Lewis which were collateralized, in whole or in part, by fraudulent bonds including: Centennial Bank, Citizens, Liberty Bank, First Community, Allied, Simmons, and Regions Bank.
The U.S. Attorney for the Eastern District of Arkansas says Centennial Bank and Bank of Augusta currently hold fraudulent bonds originally sold by Lewis.
The intended loss amount in the case is approximately $47 million.
Lewis faces as much as 30 years in prison and a fine of $1 million dollars. He is currently free on his own recognizance awaiting sentencing.