AMARILLO, Texas (KAMR/KCIT) — After the defense’s initial motion for United States District Judge Matthew J. Kacsmaryk to acquit Bart Reagor, or for him to receive a new trial, after a jury convicted Reagor of one count of making false statements to a bank, officials with Reagor’s defense team is responding to the prosecution’s response, continuing to stress that there was no evidence to charge Reagor.
According to previous reports by MyHighPlains.com, the Reagor-Dykes Auto Group co-founder was found guilty of one count of making false statements to a bank while finding him not guilty on two counts of bank fraud by a jury in October.
During the trial, jury members heard from multiple witnesses from both the prosecution and the defense, presenting their respective cases on whether or not Reagor intentionally lied to the International Bank of Commerce (IBC), using $1,766,277.77 out of a $10 million capital loan for personal gain after officials told the bank that it was solely to be used for the growth of the auto group.
In the defense’s initial motion, officials stated that the definition of “working capital” was unclear through the trial, stressing that Reagor had the belief that he could use those loan funds to provide owner distributions as “working capital.”
In the prosecution’s response, officials referenced an email Reagor sent to Shane Smith, the auto group’s former chief financial officer, and Reagor-Dykes Auto Group co-founder Rick Dykes, outlining the process of the use of the working capital loan. The prosecution claims that the email, which states that how the working capital is going to be used is ” 100000000% confidential between us and is not ANYONE ELSE’S BUSINESS!!!!!! NOBODY’S!!!!!!!!!!!!! NO BANKERS OR ANYONE ELSE! OUR BUSINESS!,” intentionally excluded anyone who would raise objection to the use of these funds, including officials from the legal department within the auto group as well as representatives from IBC.
In the most recent reply from the defense, officials continue to argue that there was no evidence that Reagor was aware that “working capital” funds could not be used to make owner distributions, citing that the bank never told Reagor that and that there was “no evidence that anyone ever told him that.” They also reiterated that the term was not defined throughout the loan agreement.
“The government points to testimony of bankers and government experts to the effect that ‘working capital’ does not, to them, allow its use for owner distributions,” court documents read. “But that testimony is simply not evidence of Reagor’s state of mind, unless the government wants to content that Reagor was somehow a mind reader. There was no evidence that they told him what they thought.”
Extension granted to defense in presentence report-related filings
In court documents recently released, court officials granted the defense’s motion to extend the portion of time the team can file objections to the presentence report drafted by the US Probation office. Originally, objections to the report were due by Jan. 3, 2022, with the deadline now being Jan. 10, 2022 with the extension.
According to court documents, officials with the defense state that the draft report is more than 50 pages, encompassing topics including “relevant conduct.” This conduct includes the activities of the multitude of individuals involved in the Reagor-Dykes Auto Group floorplan fraud and check-kiting schemes, including Shane Smith, the auto group’s former chief financial officer, and Steven Reinhart, the auto group’s former legal compliance director. Both Reinhart and Smith, who pleaded guilty to their respective charges, are scheduled to have their sentencing hearings at 1:30 p.m. Jan. 20 in Amarillo Federal Court.
“By including the floorplan fraud/check-kiting of these 15 other people, the report magnifies Mr. Reagor’s criminal exposure to a range of 324 to 405 months’ imprisonment,” the motion states. “Given the length of this report and the grave prison exposure, counsel is unsurprisingly forced to research, draft, and file significant objections.”