Attorney Sentenced In $50 Million Bank Fraud

Kevin Harold Lewis was sentenced to 121 months incarceration to be followed by three years of supervised release for bank fraud. Lewis was also ordered to pay $33,826,326 in restitution. An additional amount of restitution will be considered after briefs are filed regarding the loss to Centennial Bank of Cabot, Arkansas. Lewis was ordered to report to the Bureau of Prisons on February 7, 2012.

“This large scale fraud scheme was not the work of a man who made a little mistake. Kevin Lewis, through calculated efforts, defrauded nine financial institutions out of nearly $50 million, and those institutions still have outstanding losses of over $39 million,” stated Thyer. “A large prison sentence was necessary, due not only to the nature and circumstances of the offense, but also to show that white collar crime is a serious offense with serious consequences.”

Until around October 2010, Kevin Harold Lewis, a licensed attorney in the state of 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 these districts. These assessment bonds are also known as special improvement district bonds.

At the plea hearing held before United States District Judge James M. Moody, Lewis admitted that between December 31, 2008, and September 29, 2010, First Southern Bank, a federally insured financial institution located in Batesville, Arkansas purchased special improvement district bonds, totaling approximately $23 million from Kevin Lewis. Prior to the purchase of each bond, Lewis would provide the bank with offering documents describing the details of bonds. At the plea hearing, Lewis acknowledged that these bonds were fraudulent. On or around August, 2009, Lewis, through PA Alliance Trust, a trust he formed in February 2009, purchased a controlling interest, approximately 53%, in First Southern Bank. To facilitate this purchase, Lewis borrowed approximately $4.6 million from First State Bank in Lonoke. Lewis pledged the First Southern Stock as collateral for this loan. In or around September 2010, Lewis, through his PA Alliance Trust, purchased an additional $5.5 million in First Southern stock, which increased his ownership in the bank to 64.9%. To facilitate this purchase, Lewis, in part, used funds from the sale of two fraudulent bonds to First Southern Bank.

In addition to the fraudulent bonds provided to First Southern Bank, a bank that was forced into FDIC receivership upon learning of the status of the bonds, the following financial institutions provided loans to Kevin Lewis which were collateralized, in whole or in part, by fraudulent bonds: Centennial Bank, Citizens, Liberty Bank, First Community, Allied, Simmons, and Regions Bank. The following banks currently hold fraudulent bonds which were originally sold by Kevin Lewis: Centennial Bank and Bank of Augusta – Source.

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