Reagor Dykes Auto Group co-principal Bart Reagor is declaring innocence in a video released by a Houston media consulting company days after the former CFO of his now-bankrupt Texas dealership group pleaded guilty to conspiracy to commit wire fraud.
"I don't have anything to hide," Reagor said in the video released Monday. "I have nothing to fear."
Reagor has not been charged with a crime, nor was his name mentioned in court documents released last week that described rampant floorplanning fraud and a check-kiting scheme at the dealership group.
"I wish I had been more of a financial expert and gotten more involved in that area of the company, but honestly that wasn't my thing," Reagor said in the video. " ... I'm a commercial guy, I'm a sales guy, I'm a marketing guy. I'm a recruiting guy. I'm a training guy."
The Reagor Dykes group's woes began in earnest when Ford Motor Credit Co., its largest floorplan lender, performed a surprise audit in June 2018 and then sued July 31, alleging extensive fraud. The dealership group filed for Chapter 11 bankruptcy protection one day later.
Former Reagor Dykes CFO Shane Smith pleaded guilty to the conspiracy charge last week in federal court. He faces up to 20 years in prison and up to a $250,000 fine. His sentencing is set for Oct. 1. Smith agreed to cooperate with authorities as part of a plea agreement.
It's unclear whether others will be charged, but court records note that Smith had several "co-conspirators." According to a court document, those co-conspirators gave false information to Ford Credit in order to fraudulently receive financing, while also delaying payments to the lender. Reagor Dykes staff allegedly pulled VINs from previous sales and submitted them to Ford Credit as though the dealerships had just bought the vehicles, even though they hadn't, court records said.
The dealership group also allegedly kited checks, in which checks are cross-deposited between two or more accounts to artificially inflate account balances. Nine Reagor Dykes entities were involved, using 19 accounts at several banks, court records said.
In Monday's video, Reagor said he had no idea such activity was taking place.
"There was absolutely no reason for me to think there was any major fraud going on," Reagor said. "And every day I got the numbers of what we produced the day before from the production manager. Every Friday I got a bank balance report from my CFO."
Reagor added, "I'm still confused about why [Smith] would do anything to put us in this position, other than greed, or if there was somebody that he was taking direction from besides me."
Ford Credit has said it's owed more than $112 million. Dealership co-principal Rick Dykes agreed in April to a $58.7 million consent judgment in Ford Credit's civil suit. Ford Credit also is seeking a $45.3 million judgment from Bart Reagor, but Reagor has objected to that amount. A hearing to settle the dispute is set for July 11.
