Bart Reagor sentenced to 14 years in prison

LUBBOCK, Texas (KCBD) - Bart Reagor has been sentenced to 14 years in prison for lying to the International Bank of Commerce about a $10 million working capital loan for his dealership, Reagor-Dykes Auto Group. He was ordered to pay full restitution, more than $9 million, but no fines.

On exiting the courthouse, Reagor praised the judge, but confirmed that he would immediately file an appeal.

“I just wanted to say that the judge was very fair. He did a good job, and our family is just looking forward to the appeal. I know I’m innocent and we’re going to win the appeal,” Reagor said.

Reagor thanked his family and everyone who supported him in court.

“I appreciate ya’ll being here. I miss seeing everybody. It’s been a hard four years. I felt like the judge was fair today...’cause you know we got a conviction last time, so we had to have some kind of sentence. I thought the sentence was fair. I’m happy I’m going home with my family and we’re looking forward to the appeal. We’ll be doing that in the next couple of days.”

Reagor was convicted in October of illegally transferring $1.7 million of that money into his personal bank account.

As part of his conviction, Reagor must repay that money, as well as forfeit nearly $1 million seized by the FBI.

The judge decided Reagor was not a flight risk and not a danger to the community, so he will not be required to turn himself in until May 9 before 2 p.m.

The defense has requested the Bureau of Prisons choose a medical facility for Reagor, so he can continue treatment for cancer and Parkinson’s disease, perhaps at the facility in Fort Worth.

Until his sentence begins, Reagor is still under the conditions of his supervised release, meaning he cannot be employed by anyone related to auto sales without permission from his probation officer, and he cannot open any new lines of credit.

Attorney statements after sentencing

Prosecutors thanked the court and the FBI, but refused to comment on whether Reagor was a flight risk.

“I want to thank the court for a very thorough and considerate sentencing hearing. The court made very thorough findings of all the facts and we respect the court’s decision, appreciate all the time they took. Pay respects to the defense counsel for their argument. and most importantly we want to thank the FBI for all its efforts in investigating this case. They did a phenomenal job. We couldn’t have brought the case without their efforts.”

Reagor’s defense also praised the court, but said their client was determined to appeal.

“This is a tough case. He believes he’s innocent. He has his right to appeal. I was very pleased with what I thought was the fairness of the court in considering everything. We’re stuck with the conviction unless we get reversed on appeal, but we’re thankful for the treatment today.”

Defense confirmed that they plan to file an appeal within 14 days: “We have a right to an appeal and we have to file it in 14 days, which we will. Most federal defendants who are convicted appeal, and we certainly will.”

“It’s a very long sentence, it’s 14 years or something like that. He’ll get some good time off, and I’m sure he’ll earn every bit of good time. He’s gonna behave in prison. and if we can’t get him out on appeal, he’ll do his time. That’s what he will do. He’ll come home after that and try to pick up something in this community, because all I hear from him is he loves this community.”

Reagor’s attorney says Bart will focus on his health and focus on the appeal before his sentence begins.

“Get his health straightened out, make sure that the doctors have everything they need to give him to take to the prison, and also to help me work on the appeal, which I’m sure he’ll start doing tomorrow morning. That will be my first phone call.”

U.S. Attorney Statement

United States Attorney Chad Meacham released this statement on Thursday afternoon:

Reagor Dykes Auto Group owner Bart Reagor was sentenced today to 14 years in federal prison for lying to a bank about his company’s prospects, announced U.S. Attorney for the Northern District of Texas Chad E. Meacham.

In October 2021, a federal jury found Bart Wade Reagor, 55, guilty of making false statements to a bank insured by the FDIC. Mr. Reagor was sentenced today by U.S. District Judge Matthew J. Kacsmaryk, who ordered him to pay $9,378,817.28 in restitution.

At his sentencing hearing, prosecutors introduced into evidence videos of Mr. Reagor berating his employees for not hitting their sales targets.

“You gotta want to win more than you want to live. I do. I [expletive] die to win. I want to win every [expletive] day. Every [expletive] day, every [expletive] deal,” he says in one meeting.

“Some of you weren’t there because you didn’t sell 20 units… Boo [expletive] hoo. Cry your way to the weak zone. Cry your way to the loser zone. How many times have ya’ll head me crying? I can’t be crying because I got to take care of a lot of [expletive] crybabies... Somebody’s got to be strong, somebody’s got to be consistent, and somebody’s got to be a [expletive] leader. I chose me,” he said in another “Come on up to the front, come on up to the beast feast, come on up to the millionaire zone, come on up to the jet-flying, private jet-owning, gator-wearing, Rolex-wearing club. Come on up! It’s a choice you gotta make! Or you can cry your way to sleep with all the other [expletive] losers.”

According to evidence presented at trial, in 2017, Mr. Reagor told International Bank of Commerce (IBC) that the auto group was experiencing tremendous growth and expected to go public. He claimed the company needed a cash infusion to sustain its upward trajectory and maintain a cash cushion for each of the dealerships to operate.

Relying on that information, IBC granted Reagor Dykes a $10 million working capital loan, which was distributed in two tranches: $5,000,000 in July 2017 and another $5,000,000 in February 2018, to be disbursed to the various RDAG entities.

Instead of investing all of the money into the business as he’d said he would, Mr. Reagor diverted more than $1.7 million to his personal account at Prosperity Bank – $766,277 in July 2017, following IBC’s disbursement of the first tranche of money, and $1 million in February 2018, following IBC’s disbursement of the second tranche of money. At trial, Reagor Dykes’ CFO, Shane Smith, testified that Mr. Reagor and his partner, Rick Dykes, routinely drew money out of the business. Over a 10-year-period, Mr. Smith estimated, the pair withdrew more than $25 million.

In videos introduced at sentencing, Mr. Reagor told employees that anyone bringing home a five-digit salary is “broke as [expletive]” and living “a chump life.”

“Don’t have any skeletons. See, I don’t have any -- and if I had any, I already forgot ‘em. I got a selective memory. I remember what I [expletive] want to remember,” he told his employees. “And everything else doesn’t [expletive] matter.”

Fifteen of Mr. Reagor’s employees previously pleaded guilty to various crimes involving dummy flooring and check kitting at Reagor Dykes, including:

• Shane Andrew Smith, Reagor Dykes’ CEO, who pleaded guilty in June 2019 to conspiracy to commit wire fraud
• Diana Urias, an office manager in Reagor Dykes’ used car mall in Levelland, who pleaded guilty in September 2019 to conspiracy to commit bank fraud
• Sheila Miller, an RDAG group controller, who pleaded guilty in September 2019 to conspiracy to commit bank fraud
• Paige Johnston, an office manager in Reagor Dykes’ Chevrolet store in Floydada, who pleaded guilty in October 2019 to conspiracy to commit wire fraud
• Lindsay Williams, and RDAG group accounting manager, who pleaded guilty in October 2019 to conspiracy to commit bank fraud
• Sherri Wood, an office manager at Reagor Dykes’ Ford store in Plainview, who pleaded guilty in October 2019 to conspiracy to commit wire fraud
• Pepper Rickman, an accounting controller at Reagor Dykes’ Toyota store in Plainview, who pleaded guilty in October 2019 to conspiracy to commit wire fraud
• Brad Fansler, an RDAG group administrative director, who pleaded guilty in November 2019 to conspiracy to commit wire fraud
• Ashley Dunn, executive assistant to the CEO, who pleaded guilty in December 2019 to conspiracy to commit bank fraud
• Whitney Maldonado, an office manager at Reagor Dykes’ Mitsubishi store in Lubbock, who pleaded guilty in December 2019 to conspiracy to commit wire fraud
• Elaina Cabral, an office manager at Reagor Dykes’ Toyota store in Plainview, who pleaded guilty in December 2019 to conspiracy to commit wire fraud
• Mistry Canady, an office manager at Reagor Dykes’ Ford store in Lamesa, who pleaded guilty in January 2020 to conspiracy to commit wire fraud
• Andrea Kate Phillips, an office manager at Reagor Dykes’ Ford store in Plainview, who pleaded guilty in February 2020 to misprision of a felony
• Wesley Neel, RDAG Safety & Compliance Manager, who pleaded guilty in March 2020 to conspiracy to commit wire fraud
• Steven Reinhart, RDAG Legal Compliance Director, who pleaded guilty in February 2021 to misprision of a felony

“To Bart Reagor, anyone who isn’t a millionaire is a chump. And Mr. Reagor couldn’t face being a chump. So, instead of doing his best to grow his business honestly, he padded his personal bank account by lying to a federally-insured bank. I imagine he will spend the next 14 years behind bars regretting that decision,” said U.S. Attorney Chad E. Meacham. “The Justice Department will not tolerate abuse of our nation’s financial institutions.”

“Financial crimes can destroy businesses which in turn causes irreparable damage to our economy. Mr. Reagor’s sentence sends a clear message to any criminal who uses corporate fraud for their own personal gain,” said FBI Dallas Special Agent in Charge Matthew J. DeSarno. “The FBI and our law enforcement partners will not tolerate this behavior. We will vigorously pursue anyone that uses their executive position to defraud a lending institution, investors, or the public.”

The Federal Bureau of Investigation’s Dallas Field Office and Internal Revenue Services - Criminal Investigation Division conducted the investigation. Assistant U.S. Attorneys Joshua Frausto, Jeffrey Haag, and Amy Burch prosecuted the case.

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