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Bart Reagor’s lawyers are asking the federal judge presiding over his bank fraud case to prevent prosecutors from showing video evidence in which he boasts of having obtained his wealth from “other people’s money” and that everything what he did was planned.
The demand was one of multiple motions and briefs filed last week ahead of Reagor’s Oct. 12 trial in Amarillo before Judge Matthew J. Kacsmaryk.
Reagor, the former CEO of Reagor-Dykes Auto Group, faces two counts of bank fraud and one count of misrepresenting a bank. The charges stem from an investigation that allegedly showed that between 2016 and 2018, he funneled more than $ 1.7 million into his personal bank account on a $ 10 million loan from the International Bank of Commerce.
Prosecutors, who also filed a lawsuit file last week, intend to show jurors that the bank loan was intended to be used as “working capital” for RDAG, as the dealership was growing so rapidly that he lacked money.
Prosecutors believe Reagor intentionally concealed his intention to use the money for personal expenses when he negotiated the loan with IBC because the bank would not have loaned him the money otherwise.
The videos prosecutors plan to use come from several meetings Reagor has had with his employees. In a clip, Reagor tells his sales team that “he made it and got rich on ‘OPM’ which is ‘other people’s money’,” the essay’s memoir reads. government.
Another clip shows Reagor telling his employees that “he does what he wants, that nothing is an accident and that he does everything ‘on purpose’.”
Prosecutors said Reagor’s statements were not bad acts or confessions of criminal conduct. However, they argue that the proposed evidence meets an exception for the use of character evidence if it proves the motive, expediency, intention, preparation, plan, knowledge, identity or absence. error or accident.
Prosecutors argued in their brief that the video clips would rebut Reagor’s defense that “he did not have the requisite intent to defraud or mislead the bank linked to the loan.”
Meanwhile, in 2018, RDAG filed for bankruptcy when its creditor, Ford Motor Credit, filed a lawsuit to collect unpaid debts after discovering a huge dummy flooring and control system designed to steal their money. millions of dollars.
This lawsuit sparked a separate criminal investigation which resulted in the conviction of 15 RDAG employees for their role in a system of dummy check kits and flooring designed to deceive the dealership’s creditor, Ford Motor Credit, of millions. of dollars.
Among the employees who have pleaded guilty are former RDAG CFO Shane Smith and RDAG legal and compliance director Steven Reinhart. The two are expected to be sentenced in December and are expected to testify against Reagor at the trial. Court documents indicate that Reinhart and Smith have agreed to cooperate with the government as part of their plea deal.
Smith is expected to testify that he was instructed by Reagor to divert part of the loan to him, which was paid to him in two installments. Reagor then deposited the money into his personal bank account.
“The parts of the loan proceeds diverted to Reagor were not, and never were intended by Reagor, to be used as ‘working capital’ for RDAG, but were instead intended to enrich themselves,” the brief states. of the prosecutor.
Prosecutors believe Reagor also asked Smith to distribute the same portion of the loan to Reagor’s partner Rick Dykes. Dykes, currently not charged with any offense, was included in Reagor’s email message directing personal distributions.
Reagor’s lawyers argue that the video evidence is irrelevant since Reagor does not mention IBC or suggest that Reagor engaged in criminal conduct.
Instead, they said the videos showed Reagor admitting to legally borrowing money from other people, which is contrary to the fraudulent conduct the government accuses Reagor of having committed.
Meanwhile, Reagor’s attorney informed the court that he did not intend to raise a “lawyer†defense. Kacsmaryk ordered Reagor to reveal whether he planned to pursue a defense that he acted on the advice of a lawyer when he embezzled the working capital loan from his personal bank account.
However, among the witnesses Reagor’s lawyer expects to call during the trial is Chuck Darter, a Lubbock CPA who had advised and assisted Reagor on financial and tax matters for more than two decades. He should educate jurors about Reagor’s habit, custom and practice in reviewing complex financial transactions and his reliance on those around him to provide proper advice, the Reagor’s witness list.
Dykes is also listed as a potential witness for Reagor. He would have to tell jurors that he believed the loan agreement allowed for personal distributions and that he had no intention of committing bank fraud when he applied for the loan.
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