04/22/2021 | Press release | Distributed by Public on 04/22/2021 13:47
Reagor Dykes Auto Group owner Bart Reagor has been charged with lying about using business loans for personal expenses, announced Acting U.S. Attorney for the Northern District of Texas Prerak Shah.
On Thursday, a federal grand jury indicted Bart Wade Reagor, 55, on two counts of bank fraud and one count of making false statements to a bank insured by the FDIC. He will make his initial appearance before U.S. Magistrate Judge Lee Ann Reno in Amarillo on Monday at 2 p.m.
'Even as his businesses struggled financially, Mr. Reagor diverted business loan funds into his personal bank accounts, expressly violating his agreement with the bank,' said Acting U.S. Attorney Prerak Shah. 'Lying to an FDIC-insured financial institution is a federal crime, one we will not abide. We are determined to hold to account every Reagor Dykes employee who engaged in financial misconduct.'
'Mr. Reagor used his executive influence to allegedly defraud a lending institution and cause the loss of a significant amount of money,' said Dallas FBI Special Agent in Charge Matthew J. DeSarno. 'Corporate fraud schemes, like those that involve diverting millions of dollars to personal funds, have the potential to cause immeasurable damage to the public's confidence in our economy.'
According to the indictment, in the first quarter of 2017, one of Reagor Dykes' floorplan lenders conducted an audit that placed the auto group in a weak cash position.
In order obtain cash to continue operations, D & R Acquisitions, a limited liability company formed to hold Reagor Dykes' real estate assets, entered into a loan agreement with International Bank of Commerce (IBC). The agreement included a $10,000,000 working capital loan, which was distributed by IBC to D&R in two tranches: $5,000,000 in July 2017 and another $5,000,000 in February 2018, to be disbursed to the various RDAG entities.
However, in applying for the loan, Mr. Reagor allegedly misrepresented its purpose, concealing from IBC the fact that he planned to divert some of the proceeds from the working capital loan into his own personal account for personal expenses. (The loan agreement expressly prohibited Mr. Reagor and others from diverting loan proceeds to their personal bank accounts, and IBC would not have approved the loan if Mr. Reagor or anyone else had disclosed to IBC that some of the loan proceeds would be diverted to Mr. Reagor's personal bank accounts.)
In total, Mr. Reagor diverted more than $1.7 million to his personal account at Prosperity Bank -- $766,277 in July 2017, following IBC's disbursement of the first tranche of money, and $1 million in February 2018, following IBC's disbursement of the second tranche of money.
Prior to Mr. Reagor's indictment, 15 of his employees pleaded guilty to various crimes involving dummy flooring and check kitting at Reagor Dykes, including:
An indictment is merely an allegation of criminal conduct, not evidence. Like all defendants, Mr. Reagor is presumed innocent until proven guilty in a court of law.
If convicted, Mr. Reagor faces up to 90 years in federal prison, and will be required to forfeit any property traceable to the offense.
The Federal Bureau of Investigation's Dallas Field Office and Internal Revenue Services - Criminal Investigation Division conducted the investigation. Assistant U.S. Attorneys Joshua Frausto, Jeffrey Haag, and Amy Burch are prosecuting the case.