The saga of Lubbock’s Reagor-Dykes Auto Group is a long one, filled with murky details and convoluted legal wrangling. Three years after the West Texas company went bankrupt, more than 15 people have been found guilty of fraud.
In the summer of 2018, the Ford Motor Credit Company sued Reagor-Dykes, claiming that the dealer owed Ford over $100 million. Reagor-Dykes filed for Chapter 11 bankruptcy the next day. That was the end of the dealership, but the start of the legal troubles for some of its associates.
Sarah Self-Walbrick is senior reporter for Texas Tech Public Media in Lubbock. She told Texas Standard that owner Bart Reagor has been charged with bank fraud and making false statements.
“Those charges stem back to a 2017 loan,” Self-Walbrick said. “He got this loan that was supposed to be for business, and he ended up transferring several thousand dollars to his personal account.”
Self-Walbrick says 15 former employees have pleaded guilty to charges that stem from two financial schemes: one involved check-kiting; and the other, “double flooring,” which means financing a vehicle multiple times.
“Most of these employees are administrative people, things like that,” Self-Walbrick said.
The ringleader of the fraud, former Reagor-Dykes CFO Shane Smith, is set to be sentenced in July.
Self-Walbrick says Reagor-Dykes was well known in West Texas as a large, fast-growing auto-dealership group.
“The documents that I’ve looked at, everything points to greed,” she said. “This auto group was trying to grow too big, too fast. They needed capital to do it, and they ended up going through illegal means to make that happen.”
Reagor-Dykes customers continue to have problems with purchases and leases, including difficulty tracking down paperwork and having a place to return leased vehicles.
“[There are] still people driving around with paper car tags because they cannot get their vehicle properly registered,” Self-Walbrick said.