Bart Reagor, a co-principal of Reagor Dykes Auto Group in Texas leading up to its collapse in 2018, has been charged with lying about using business loans for personal expenses.
The U.S Attorney's Office for the Northern District of Texas said Thursday that Reagor has been indicted by a federal grand jury on two counts of bank fraud and one count of making false statements to a bank insured by the FDIC.
Reagor is set to appear before a federal judge at 2 p.m. CDT on Monday.
If convicted, he faces up to 90 years in federal prison and will be required to forfeit any property traceable to the alleged offense, the U.S. Attorney's Office said.
The federal indictment alleges that one of Reagor Dykes' floorplan lenders did an audit in the first quarter of 2017 that showed the auto group was in a weak cash position.
A limited liability company was formed to hold Reagor Dykes' real estate assets while getting cash for operations. That company, D&R Acquisitions, entered into a loan agreement with International Bank of Commerce for $10 million in working capital.
Reagor allegedly diverted more than $1.7 million of that loan to his personal bank account, which was prohibited by the loan agreement.
"Even as his businesses struggled financially, Mr. Reagor diverted business loan funds into his personal bank accounts, expressly violating his agreement with the bank," U.S. Attorney Prerak Shah said in a release. "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."
Reagor's Lubbock, Texas-based auto group imploded in 2018 after Ford Credit and other lenders sued it for floorplan fraud. Ford Credit in particular said Reagor Dykes, which filed for Chapter 11 bankruptcy the day after the initial suit, sold more than 1,100 vehicles without repaying $41 million to fund their acquisition.
In separate legal action related to the group's operations, 15 Reagor Dykes employees have pled guilty to various fraud charges and are awaiting sentencing, including Shane Smith, the group's CFO, who had been blamed by the group's principals for any apparent financial improprieties with Ford Credit. Smith pleaded guilty to conspiracy to commit wire fraud in June 2019. He is set to be sentenced July 27.
