The trustee in a bankruptcy case tied to a multimillion-dollar mortgage fraud allegation has filed a malpractice complaint against the debtor’s brother and is seeking more than $300 million in damages.

Derek Henderson is the trustee in bankruptcy cases filed by Chris Evans of Madison County and his companies. Evans’ brother, Charles Evans, is a Jackson lawyer who handled title work for Mississippi Valley Title Co. in several of the land transactions alleged to be part of the fraud.

The FBI and U.S. attorney’s office are investigating the allegations. John Colette, the Evans brothers’ attorney in any possible criminal case, said no charges have been filed against either brother.

In his Jan. 27 complaint, Henderson alleges Charles Evans failed Chris Evans in several ways and is asking a judge to award $50 million in damages, in addition to punitive and special damages to be determined by the judge.

Tylvestor Goss, Chris Evans’ bankruptcy attorney, would not comment.

Henderson was ill Monday and could not be reached for comment. Judge Neil Olack has given Charles Evans, who is representing himself, until March 1 to respond to Henderson’s complaint.

In court documents, the brothers have been accused of getting multiple loans from various banks on individual properties, including a part of Highland Colony Parkway. Each bank believed itself to be the sole lienholder.

In his complaint, Henderson alleges Charles Evans failed to protect the assets of the companies and Chris Evans. Henderson also alleges Charles Evans allowed money and assets to be “commingled and misappropriated.”

In the filing, Henderson said Charles Evans should have known his actions were a breach that would harm his brother, the companies and their creditors.

Mississippi Valley Title issued policies insuring the accuracy of titles involved. At least $41 million in claims have been filed against Mississippi Valley Title and its parent company, Old Republic National Title Insurance Co.

Charles Evans has not filed bankruptcy, but he and his brother were both named in lawsuits filed by several banks.

After Chris Evans filed bankruptcy in October, more than 30 companies the Evans brothers set up or controlled also filed Chapter 7 bankruptcy.

Several banks in the case are asking the judge to lift the stay that prevents them from moving forward with the individual properties tied to their loans.
Henderson, however, has filed a motion asking the judge to allow him to sell the land on the open market.

In US law, Money Laundering is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money. It is the process of creating the appearance that large amounts of money obtained from serious crimes, such as real estate fraud, originated from a legitimate source. Today its definition is often expanded by government and international regulators to mean any financial transaction which generates an asset or a value as the result of an illegal act.

Jeffrey Bennett and Stephen Doherty of Doylestown-based Bennett & Doherty are charged with conspiracy to commit mail and wire fraud and conspiracy to commit money laundering and Doherty is also charged with bankruptcy fraud.

Two partners in a Pennsylvania law firm have been federally indicted along with three other defendants including two mortgage company owners in a wide-ranging alleged real estate fraud scheme.

Federal prosecutors in Philadelphia say the $14.6 million scheme involved 35 fraudulent loans, real estate deals in which purchases were made by straw buyers and false promises of help to homeowners trying to stave off foreclosure.

If convicted, Doherty could get a maximum of 385 years in prison and $4 million in fines and Bennett faces as much as 240 years and $3.2 million in fines.

“These are allegations. And now you have others wanting to join in hoping they hit a lucky number too,” says Bennett’s lawyer, George Bochetto of Bochetto & Lentz in Philadelphia. “Jeff Bennett is a fine, fine attorney who’s always worked hard on behalf of homeowners in tough situations.”