LUBBOCK, Texas – Former Reagor Dykes Chief Financial Officer Shane Smith testified that Bart Reagor did not know about crimes committed at the auto dealership group.
Smith took the stand Tuesday afternoon for prosecutors in Amarillo. Reagor went on trial starting Monday on charges of bank fraud making a false statement to a bank. Reagor was co-owner of the Reagor Dykes Auto Group. RDAG collapsed into bankruptcy in August 2018 amid accusations of fraud and default.
Ford Motor Credit accused Reagor Dykes of the largest “floor plan” fraud in U.S. history. A floor plan is a particular kind of debt for auto dealerships.
Smith is among 15 former employees who pleaded guilty to federal crimes. Smith faces up to 20 years in prison and as part of his plea deal, he must cooperate with prosecutors in the Reagor case.
Smith testified that he never told Reagor or co-owner Rick Dykes about the floor plan fraud or a form of bank fraud called check kiting. Smith also said Reagor never asked him to commit a crime.
At the heart of the Reagor trial is $1.7 million he took from the company in 2017. Prosecutors claim Reagor took the money from a $10 million loan IBC Banks made to RDAC, not Reagor personally. By taking the money for personal use, IBC was denied the truth of how the money would be used, prosecutors said.
On the stand, Smith quoted Reagor as saying the $1.7 million must be kept secret from bankers.
But on the cross examination, Smith also admitted Reagor was never told he couldn’t use the IBC loan to pay himself.
Also during the Smith testimony, prosecutors played audio and video of Reagor saying he got rich by “talking other people” into giving him their money. Reagor also said in the recordings that he got rich because he was a “bad xxx mother xxxxer.”
The Reagor trial was expected to last through Friday.