Now up to five: Two more former Reagor-Dykes employees plead gui

Now up to five: Two more former Reagor-Dykes employees plead guilty

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LUBBOCK, Texas -

The tally of former Reagor-Dykes employees who have pleaded guilty to federal charges is five. Paige Anna Johnston and Lindsay Clare Williams have pleaded guilty.

Johnston, a former office manager for the Floydada dealership, pleaded to a charge of conspiracy to commit wire fraud. Williams, a former accounting manager, pleaded to a charge of conspiracy to commit bank fraud. 

Court records show Johnston falsified records to show the Auto Group owed Ford Credit less than it actually did, or to receive additional financing. This was a form of floor plan fraud. Floor planning is the term for how dealerships receive financing for auto sales. 

Records show Reagor-Dykes staff referred to "re-flooring", "fake flooring" and "dummy flooring". Federal records show "[S]taff would retrieve files from old car deals and submit the Vehicle Identification Numbers (VIN), via interstate wire communication, to FMCC as though RDAG were buying the vehicles again, when in fact it was not."

Johnston admits she owes more than $27 million in restitution. According to her plea, Williams admits she owes more than $23 million in restitution. 

Williams' plea states Williams was an authorized signer on three Reagor-Dykes bank accounts and issued intercompany checks. The document doesn't state when Williams started kiting checks; it gives an end date of July 27, 2018, around the time of Ford Credit's emergency audit and subsequent civil action. 

The new court records show Williams, "and others both known and unknown, devised a scheme and artifice to defraud andn to obtain monies, funds, and assets owned by and under the custody of" banks, by false and fraudulent pretenses. 

These five people are involved in the criminal investigation aspect of the Auto Group's collapse. Former CFO Shane Smith first pleaded guilty in June to conspiracy to commit wire fraud. He is facing up to 20 years in prison and restitution of at least $50 million. His sentencing was scheduled for last week, but has been pushed back to early January. A few weeks ago former controller Sheila Miller and former office manager Diana Urias also pleaded guilty. They both face up to five years in prison.

These pleas have stated there was an entire department at Reagor-Dykes designed to kite checks, writing them between banks to make it appear that there were sufficient funds available.

Monday's plea by Johnston is the first criminal case to lay out floor plan financing fraud, which is what Ford Credit first identified in its July 2018 lawsuit. Rick Dykes settled with Ford Credit earlier this year. A jury last week ordered Bart Reagor to pay $53.7 million. 

All of this is separate from the Auto Group companies' bankruptcy proceedings. An investor has emerged, hoping to lead the companies out of bankruptcy through a re-organization plan that will be voted on later this year. 

 

 

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