AMARILLO, Texas (KAMR/KCIT) – Officials from Bart Reagor’s legal team have responded via court documents after the U.S. Court of Appeals for the Fifth Circuit heard from the prosecution in its initial appellee’s brief in late June.
This back-and-forth conversation through court documents continues Reagor’s appeal process. Reagor’s legal team is asking for a court to reconsider Reagor’s guilty verdict of making false statements to a bank in October 2021. According to reports by MyHighPlains.com, the guilty verdict resulted in a 168-month sentence, or 14 years, for Reagor in federal prison, handed down by Amarillo Federal Court Judge Matthew J. Kacsmaryk in March.
A jury convicted Reagor, the co-founder of the Reagor-Dykes Auto Group, of lying to the International Bank of Commerce about his intentions of using a $10 million capital loan, saying that the purpose of the loan was solely aimed at putting money into the growing company, but instead using $1,766,277.77 of the loan for personal reasons. Reagor’s legal team filed its appeal in May.
What did the initial appeal say and how did the prosecution respond?
According to previous reports by MyHighPlains.com, Reagor’s legal team filed an appeal brief in May, initially questioning the definition of the “working capital” term used throughout the trial and what Reagor thought the term meant when he took distributions from the $10 million capital loan.
Within the brief, like in the trial, Reagor’s team stressed Reagor’s belief that he could repay himself because of his previous investment in the company.
According to the Generally Accepted Accounting Principles, “working capital” is loan proceeds that help provide for the current operations of a business. However, representatives from Reagor’s legal team claimed that the term was not officially defined within the loan agreement between IBC Bank and the Reagor-Dykes Auto Group.
In its own response, the prosecution claimed that the evidence from the October 2021 trial was sufficient enough for the jury to find that Reagor “intentionally misled” IBC Bank about his intentions of what he would use the loan for, not letting officials from the bank know that he intended to take a portion of it for personal use. The prosecution cited emails where Reagor said that the way the company is expected to manage its loan is “100000000% confidential” and “not ANYONE ELSE’S BUSINESS!!!!!!”
How did Reagor’s legal team respond to the prosecution in the new set of documents?
In its most recent response, filed on July 19 in the US Fifth Circuit Court of Appeals, Reagor’s legal team claims that the prosecution “strays quite far from the issue on this appeal,” not addressing evidence regarding Reagor’s state of mind. Officials said that the charge Reagor was convicted of is that Reagor “intended to divert part of the loan proceeds to (his) personal bank account,” a fact that Reagor’s team challenges.
“The only issue on this appeal is whether there was sufficient evidence that, when he told the banker that he wanted a ‘working capital’ loan, Reagor knew the bank’s understanding that he could not use any part of the loan to make distributions to himself and his partner,” the court documents read.
Officials from Reagor’s team claim that Reagor did not tell bankers that the entirety of the loan would go to working capital and the “musings of bankers,” communicated within an internal memo surrounding the use of said working capital, were not communicated to Reagor.
Reagor’s team went on to say that none of the witnesses at trial involved in the loan transaction communicated that a distribution would be inconsistent with the loan’s purpose, allowing the jury to conclude that Reagor understood the parameters of the loan, a fact which Reagor’s legal team disputes.
“The deal that the parties actually negotiated, memorialized and signed should stand as controlling evidence of the expectations of both parties, and thus Reagor’s state of mind,” the documents read. “The executed version of the loan document was the deal to which they agreed, and demonstrates that Reagor lacked the criminal intent necessary to be convicted.”
Through this appeal, Reagor’s legal team is aiming for his conviction and his sentence to be overturned, the documents read. Reagor continues to be in custody by the Bureau of Prisons after surrendering on May 9.