Arkansas lawyer and businessman admitted Wednesday to staging a Ponzi scheme that netted more than $47 million

Arkansas lawyer and businessman admitted Wednesday to staging a Ponzi scheme that netted more than $47 million, a scam one prosecutor called the largest case of fraud in state history.

Kevin Lewis, 43, pleaded guilty Wednesday to one count of bank fraud in federal district court in Little Rock. U.S. Attorney Christopher Thyer said Lewis likely would receive between 10 to 13 years in prison, though bank fraud carries a maximum penalty of up to 30 years.

He also will have to pay restitution of almost $40 million, though that could be further reduced as banks work to recover their losses. Several banks have sued Lewis in civil court.

Lewis created paperwork for fake rural improvement bonds often used by developers, prosecutor Karen Whatley said Wednesday. The scheme began in 1997 with what Thyer called a "single, small loan." It grew to involve at least seven Arkansas banks.

One bank, First Southern in Batesville, gave Lewis about $23 million based on the fake paperwork. In August 2009, Lewis took majority control of the bank using a $4.6 million loan from another bank, First State in Lonoke, that was backed by the same false bonds.

He never defaulted on any bonds. Instead, he issued new bonds to cover the payments on existing ones, Thyer said.

"This Ponzi scheme, he was able to roll and roll and roll," Thyer said in a news conference after the hearing.

The money went to his varied business interests across the state, including a law firm, apartments, a car dealership and a clothing company. It also supported a lifestyle that Thyer called "opulent" -- a multimillion-dollar house in west Little Rock, fancy cars and vacations.

The scheme was discovered after the Federal Deposit Insurance Corp. did an audit of First Southern Bank last October. It found problems with the portfolio of rural improvement bonds created by Lewis, Thyer said. The FDIC would eventually turn over the investigation to the U.S. Attorney's office and the FBI.

"Mr. Lewis' scheme was simple," Thyer said in a news conference after the hearing. "He knew that rural improvement district bonds were not registered in the state, and he used that knowledge and his position of trust to create fraudulent bonds and then use those fraudulent bonds as collateral to obtain money from various financial institutions in Arkansas."

In court Wednesday, Lewis acknowledged that the evidence against him was true. U.S. District Judge James M. Moody did not schedule a sentencing date, but said he would likely follow federal sentencing guidelines later cited by Thyer.

Lewis walked out of the courthouse with his attorney, Tim Dudley, who declined to comment. Asked for his thoughts on the deal afterward, Lewis shook his head and said, "Sorry."