Kevin Lewis, left, stays silent as reporters pepper him with questions Wednesday. Lewis was leaving the U.S. District Courthouse in Little Rock after pleading guilty to a crime prosecutors called the worst fraud in state history. ( Gavin Lesnick

 A former Little Rock attorney has pleaded guilty to a scheme that prosecutors are calling the largest fraud in the history of Arkansas.

Kevin Lewis, 43, plead guilty to selling or using as collateral approximately $50 million in fraudulent bonds.

Lewis pleads guilty in 'largest fraud' ever in Ark. Watch Video

Lewis will be sentenced at a later date but he could face up to 30 years in prison and be ordered to pay restitution of nearly $40 million. Lewis, who was allowed to remain free pending sentencing, did not comment as he left the courthouse beside his attorney.

Prosecutors said Lewis sold fraudulent special improvement district bonds to First Southern Bank in Batesville and then used the proceeds to buy a controlling interest in that bank and make other fraudulent investments.

"Essentially, Mr. Lewis was operating what is commonly called a Ponzi scheme," U.S. Attorney for the Eastern District of Arkansas Christopher Thyer said during a news conference after the plea. "... He used much of these loan proceeds to further the fraud and he also used these proceeds to fund various businesses which he was involved with as well as to lead what can only be described as very opulent lifestyle."

The fraud, which was discovered during a routine audit by the FDIC in October 2010, forced First Southern Bank into receivership and caused a "significant loss" for many others, Thyer said. Prosecutors say Centennial Bank, Citizens, Liberty Bank, First Community, Allied, Simmons and Regions Bank also provided loans to Lewis which were backed by fraudulent bond collateral.

Thyer twice called it the largest fraud ever in the state, noting civil lawsuits will likely continue for years to come but there will never be enough money collected from Lewis to repay all the victims.

The number of victims "goes way up," Thyer said, if you consider the individuals affected by the bank loss, such as First Southern Bank shareholders. At least five lawsuits have already been filed by Arkansas banks against Lewis.

While Lewis could be sentenced up to 30 years in prison by U.S. District Judge James Moody, it's unlikely he will receive that much prison time. Thyer said sentencing guidelines - which take into account past criminal convictions and other factors - indicate a likely sentence of 10 to 13 years.

No sentencing date was set, but such hearings often occur within about 90 days of a conviction.

Lewis spoke during the hearing Wednesday before Moody, but only to acknowledge he understood his rights, was aware of the maximum prison term and that he was pleading guilty to the crimes as alleged by prosecutors.

At one point, Moody asked if Lewis understood that his plea made him a felon, a status which prevents him from certain rights and licenses.

"Regrettably, yes sir," Lewis replied.

Read tomorrow's Arkansas Democrat-Gazette for full details.

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