AMARILLO, Texas (KAMR/KCIT) — The week-long jury trial of Bart Reagor ended Oct. 15 with a 12-person jury convicting Reagor of one count of making false statements to a bank while finding him not guilty for two counts of bank fraud. The MyHighPlains.com team followed this trial throughout the week, providing updates on where the trial stood after each day.
Monday (Oct. 11)
- When he walked into Amarillo Federal Court Monday morning, Reagor greeted his defense team, stating it was a “big day.” It was indeed a big day, with the court, along with the defense and the prosecution, narrowing down a group of more than 80 potential jurors from the top 26 counties of the Texas Panhandle to 12 jurors and two alternates.
- Officials narrowed down the group by asking numerous questions of the jurors: including personal relationships related to the case, their exposure to “pre-trial publicity” as well as familial history with law enforcement. After the jury selection took nearly nine hours, the jury in the Reagor trial was set Monday, all of which did not have prior jury experience.
Tuesday (Oct. 12)
- Tuesday’s trial proceedings first began with opening statements from both the prosecution and the defense. U.S. Attorney Joshua Frausto, a member of the prosecution’s counsel, outlined Reagor’s “secret” plan of taking $1,766,277.77 out of a $10 million capital loan from the International Bank of Commerce (IBC) and using it for personal gain after Reagor Dykes Auto Group (RDAG) officials told the bank that it was solely to be used for the growth of the auto group.
- In this initial argument, Frausto referenced an email from Reagor in May 2017 to former RDAG Chief Financial Officer Shane Smith and RDAG co-owner Rick Dykes outlining the plan to use the IBC working capital loan after officials first met with the bank in April 2017.
- In the defense’s opening statement, Dan Cogdell, a member of the defense’s counsel, stated there was no crime committed on Reagor’s end, with Reagor always believing he could use the funds as he did. Cogdell stressed numerous times that Reagor relied on Smith’s financial background for the auto group and was not involved in the loan agreement itself.
- After opening statements, the jury heard from four witnesses brought forward by the prosecution, including William Schonacher, the president and chief executive officer for IBC Bank in Oklahoma, the entity which extended the $10 million working capital loan to RDAG; Thomas Hutchison, an attorney out of Oklahoma who drafted the initial loan agreement; and William Woodring, a former vice president of commercial banking and commercial lending at IBC Bank.
- The jury also heard from Smith during Tuesday’s proceedings. Smith was charged with fraud in Amarillo federal court in June 2019. Smith then accepted a plea deal which could land him in prison for approximately 20 years. Smith was the organizer of the check kiting and floor plan fraud schemes which helped cause 13 former auto group employees to plead guilty in Amarillo Federal Court.
- During the prosecution’s questioning of Smith, they asked him about the email chain between him, Reagor and Dykes. The defense mainly questioned Smith’s credibility, stating he was only testifying because of the potential of a shorter prison sentence.
Wednesday (Oct. 13)
- In Wednesday morning’s session of the trial, the jury heard from the last three witnessess from the prosecution: Steven Reinhart, RDAG’s former legal compliance director; John Whitworth, the former FBI special agent who was the lead case agent in the RDAG investigation; and Steven Dawson, a certified public accountant and certified fraud examiner.
- Reinhart, who pled guilty to one count of misprision of a felony in Amarillo Federal Court, spoke about when he was first aware of the IBC loan as well as when he was first aware of Reagor using a portion of those funds for personal use. Reinhart said if he knew Reagor’s intention, he would have told Reagor that he could not use a portion of the IBC loan for his personal use.
- During his testimony, Whitworth spoke about his investigation into the loan, tracing the proceeds from the loan to the auto group and, eventually, to Reagor himself. Dawson then provided expert testimony on the loan agreement as well as the financial statements from RDAG. After those witnesses, the prosecution rested its case.
- After the prosecution rested its case, Cogdell raised a motion to acquit Reagor on all charges based on the case the prosecution gave, failing to prove its case beyond a reasonable doubt. After a response from the prosecution, U.S. District Judge Matthew J. Kacsmaryk, the federal judge overseeing Reagor’s trial, denied the defense’s motion for acquittal.
- In their portion of the case, the defense only brought three witnesses, wrapping up their portion of the case in less than two hours. In the defense’s portion fo the case, the jury heard from Franklin Snyder, an expert witness in contract law who is a professor of law at the Texas A&M University School of Law; Steven Fried, an expert witness who was a 33-year veteran in the banking industry; and Charles Darter, a certified public accountant out of Lubbock who has served as Reagor’s personal accountant, as well as RDAG’s accountant.
- Both expert witnesses spoke about the loan agreement contract itself, stating their respective beliefs that Reagor’s conduct was based on the terms of the agreement. Darter’s testimony brought his perspective on Reagor relying on Smith for the financial decisions for the auto group.
- After the defense rested its case, the defense renewed its motion for acquittal, once again being denied by Kacsmaryk.
Thursday (Oct. 14)
- After both the prosecution and the defense presented its witnesses during Wednesday’s portion of the trial, the jury heard final, closing arguments from both the prosecution and the defense. Prior to the closing arguments, Kacsmaryk read a jury charge aloud, giving instructions on what their deliberation should look like.
- In the prosecution’s closing argument, Jeffrey Haag, a member of the prosecution’s counsel, stressed to the jury that the allegations against Reagor were of fraud. Haag claimed that Reagor purposely omitted the fact that he was going to use a part of the working capital loan funds for personal use. Haag went over the timeline, highlighting the meeting with RDAG officials and IBC bank as well as the email exchange with Reagor, Dykes and Smith.
- In the defense’s closing argument, Cogdell restated his belief that the prosecution did not have evidence to convict Reagor beyond a reasonable doubt. Cogdell referenced the expert testimony from the defense, who stated that Reagor was within his right to use the working capital loan funds in this way under the loan agreement. Cogdell also continued to question Smith’s credibility.
- In a 17 minute rebuttal from the prosecution, Haag continued to stress that the case is a fraud case, discounting the defense’s expert testimony. Haag told the jury that the fraud occurred prior to the loan agreement being signed, stating that because of the fraud, there should have not been an agreement in the first place.
- After hearing the closing arguments, the jury went into deliberations at approxmiately 10:17 a.m. Thursday. At approximately 3 p.m., Kacsmaryk brought officials from the prosecution and the defense back into the courtroom with two notes from the jury. The first note to the jury consisted of a request of clarification of the term aiding and abetting. The second note from the jury was a request to see Reagor’s initial indictment, which Kacsmaryk allowed, admonishing the fact that the indictment is not evidence.
- At 5 p.m., Kacsmaryk received a third note from the jury which stated that they were deadlocked and were having trouble reaching a verdict after nearly seven hours of deliberation. Kacsmaryk, in front of officials from the prosecution and the defense, encouraged the jury to continue deliberations and reach a final verdict if possible.
- At 5:38 p.m., Kacsmaryk returned to the courtroom with a response from the jury to the court’s response to the deadlock note stating the following: “There is no way we can be unanimous. Can we, at least, be dismissed for the day?” Kacsmaryk then dismissed the jury until Friday.
- After the jury left, Kacsmaryk stated the court’s intention that if the jury continues to be deadlocked, they were going to proceed with a modified Allen Charge, a charge that a judge would give to the jury for further effort to reach a verdict in the case.
Friday (Oct. 15)
- After nearly a full day of jury deliberations on Thursday, the jury continued to deliberate Friday. Kacsmaryk encouraged the jury to follow the jury charge. At approximately 11:58 a.m., Kacsmaryk received a fourth note from the jury, asking the court if they could have access to transcripts from the court proceedings. This request was denied.
- At approximately 2 p.m., the jury’s fifth note to Kacsmaryk stated they continued to be deadlocked. Because of this, Kacsmaryk read the jury a modified Allen Charge, urging the jury to continue deliberations for this “important” case. The charge stated there is no more or any clearer evidence which could be given to the jury in this case and that they had a “duty to agree on a verdict.”
- After the judge read the modified Allen Charge, the jury then announced its ruling approximately two hours later, stating that Reagor was found: not guilty for count one of Bank Fraud; not guilty for count two of Bank Fraud; and guilty for count one of making false statements to a bank.
- After the verdict, the defense renewed a motion for Reagor’s acquittal, stating their belief that the prosecution failed to prove its case beyond a reasonable doubt. This motion was once again denied by Kacsmaryk for reasons stated in the trial brief.
- After the verdict was read, Reagor was released on the same conditions of his pretrial release.
Officials with Amarillo Federal Court announced Oct. 19 that Reagor is scheduled to be sentenced at 10 a.m. March 10 in Amarillo Federal Court. The sentencing dates for former Reagor-Dykes Auto Group Chief Financial Officer Shane Smith as well as Steven Reinhart, the auto group’s former legal compliance director, are scheduled for 1:30 p.m. Jan. 20 in Amarillo Federal Court.
For more information on what occurred to make It to the trial, check out the RDAG timeline on MyHighPlains.com.