Date: October 15, 2021 Contact: newsroom@ci.irs.gov Reagor Dykes Auto Group owner Bart Reagor was convicted today of lying to a bank about his company's prospects, announced Acting U.S. Attorney for the Northern District of Texas Chad Meacham. After 12 hours of deliberation, a federal jury found Bart Wade Reagor guilty of making false statements to a bank insured by the FDIC. Mr. Reagor, whose trial lasted four days, now faces up to 30 years in federal prison. "Bart Reagor's greed and insatiable need to flaunt his wealth led him to lie to a federally-insured bank and ultimately resulted in that bank suffering a loss of over $20 million dollars." said Acting U.S. Attorney Chad Meacham. "He's now bracing for a possibly decades-long sentence. The Department of Justice will not permit this kind of abuse of our nation's financial institutions and the funds of its hard-working depositors." "This multi-year investigation was extremely complicated and required dedicated complex financial crimes resources and today's outcome demonstrates the government's commitment to protecting the best interests of the American people," said Dallas FBI Special Agent in Charge Matthew J. DeSarno. "The resulting loss caused by false statements has the potential to harm the U.S. economy and investor confidence, and we will continue to work alongside the U.S. Attorney's Office and our law enforcement partners to ensure that justice is served." According to evidence presented at trial, in 2017, Mr. Reagor told International Bank of Commerce (IBC) that the auto group was experiencing tremendous growth and expected to go public. He claimed the company needed a cash infusion to sustain its upward trajectory and maintain a cash cushion for each of the dealerships to operate. Relying on that information, IBC granted Reagor Dykes a $10 million working capital loan, which was distributed 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. Instead of investing all of the money into the business as he'd said he would, 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. Reagor Dykes' CFO, Shane Smith, testified that Mr. Reagor and his partner, Rick Dykes, routinely drew money out of the business. Over a 10-year-period, Mr. Smith estimated, the pair withdrew more than $25 million. While the jury convicted Mr. Reagor of lying to an FDIC-insured bank, they acquitted him of bank fraud. His sentencing date has not yet been set. Fifteen of Mr. Reagor's employees previously pleaded guilty to various crimes involving dummy flooring and check kitting at Reagor Dykes, including: Shane Andrew Smith, Reagor Dykes' CEO, who pleaded guilty in June 2019 to conspiracy to commit wire fraud Diana Urias, an office manager in Reagor Dykes' used car mall in Levelland, who pleaded guilty in September 2019 to conspiracy to commit bank fraud. Sheila Miller, an RDAG group controller, who pleaded guilty in September 2019 to conspiracy to commit bank fraud Paige Johnston, an office manager in Reagor Dykes' Chevrolet store in Floydada, who pleaded guilty in October 2019 to conspiracy to commit wire fraud Lindsay Williams, and RDAG group accounting manager, who pleaded guilty in October 2019 to conspiracy to commit bank fraud Sherri Wood, an office manager at Reagor Dykes' Ford store in Plainview, who pleaded guilty in October 2019 to conspiracy to commit wire fraud Pepper Rickman, an accounting controller at Reagor Dykes' Toyota store in Plainview, who pleaded guilty in October 2019 to conspiracy to commit wire fraud Brad Fansler, an RDAG group administrative director, who pleaded guilty in November 2019 to conspiracy to commit wire fraud Ashley Dunn, executive assistant to the CEO, who pleaded guilty in December 2019 to conspiracy to commit bank fraud Whitney Maldonado, an office manager at Reagor Dykes' Mitsubishi store in Lubbock, who pleaded guilty in December 2019 to conspiracy to commit wire fraud Elaina Cabral, an office manager at Reagor Dykes' Toyota store in Plainview, who pleaded guilty in December 2019 to conspiracy to commit wire fraud- Mistry Canady, an office manager at Reagor Dykes' Ford store in Lamesa, who pleaded guilty in January 2020 to conspiracy to commit wire fraud Andrea Kate Phillips, an office manager at Reagor Dykes' Ford store in Plainview, who pleaded guilty in February 2020 to misprision of a felony Wesley Neel, RDAG Safety & Compliance Manager, who pleaded guilty in March 2020 to conspiracy to commit wire fraud Steven Reinhart, RDAG Legal Compliance Director, who pleaded guilty in February 2021 to misprision of a felony The Internal Revenue Services - Criminal Investigation Division and Federal Bureau of Investigation's Dallas Field Office conducted the investigation. Assistant U.S. Attorneys Joshua Frausto, Jeffrey Haag, and Amy Burch are prosecuting the case.
