Reagor-Dykes claims Vista Bank facilitated fraud - FOX34 Lubbock

Reagor-Dykes claims Vista Bank facilitated fraud

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In new bankruptcy court filings, citing e-mail records, attorneys for the Reagor-Dykes estate claim Vista Bank "benefited from and actively facilitated the fraud" that ultimately lead to the Auto Group's bankruptcy. And, according to Reagor-Dykes' attorneys, Vista Bank was able to nearly double its size in two years because "Vista Bank was willing to do things that other banks would not", claiming it coordinated with former Reagor-Dykes CFO Shane Smith.

The new filing also claims Vista Bank had advanced knowledge of Ford Credit audits. It was a surprise audit in July 2018 that led to the Auto Group's collapse, subsequent bankruptcy filings, many civil actions and several criminal charges. 

Vista Bank's legal team rejected the claims, stating it "refuses to be extorted by the criminals who ran Reagor-Dykes".

Reagor-Dykes seeks to recover "multiple millions of fraudulent transfers" from Vista Bank. It seeks to disallow Vista Bank's claimed lien against a $2 million certificate of deposit. Reagor-Dykes also wants to recover some money that was transferred from its Vista Bank accounts.

Attorneys claim tens of thousands of banking transactions Vista Bank processed for Reagor-Dykes "required significant coordination between Vista Bank executives and CFO Smith". 

Smith was the first former Auto Group employee to plead to a federal charge of conspiracy to commit wire fraud. He is awaiting sentencing. Several others have also pleaded guilty to either their role in providing false documentation to Ford Credit or check kiting.

The new filing states in the 12 months before many Reagor-Dykes companies filed for bankruptcy, August 2017 to July 2018, the Auto Group made deposits exceeding $1.4 billion into its Vista Bank accounts. But, the attorneys write, Vista Bank had Reagor-Dykes' financial reports, which showed from January 2017 to December 2017 the Auto Group reported $250 million in gross sales. These new documents state deposits for "virtually every month during this period [12 months before bankruptcy] grossly exceed past average monthly sales, often by several orders of magnitude."

"Deposits reflecting an increase of almost 600% over Debtors' prior year's gross sales could not go unnoticed at Vista Bank, particularly as these deposits were almost double the entire asset size of Vista Bank." (emphasis included in filing)

Reagor-Dykes claims three of the Auto Group's Vista accounts were overdrawn a combined 368 days for the 12 months before the buildup of massive fraud at the dealerships came crashing down.

Attorneys for the Reagor-Dykes estate also claim Vista Bank president John Steinmetz personally enriched himself through "kickbacks", claiming Reagor-Dykes funded $150,000 in luxury car leases for his personal use.

The new filing claims the above-referenced deposits "exceeded 180% of the entire asset size of Vista Bank in the third quarter of 2018". It continues, "And as established through emails between Smith and Vista Market President Toby Cecil, Vista would often keep its doors open after-hours in order to receive
these deposits in a process to be discussed at greater length later in this Complaint and known as 'late drawer memo posting'."

Reagor-Dykes attorneys cite an e-mail Cecil sent to Reagor-Dykes CEO and co-owner Bart Reagor on Sept. 22, 2016:

“Dear Bart,
We have a situation that we need to address quickly regarding the RD dealership accounts. I have attached the account history for the Mitsubishi account as of close of business yesterday which reflects a negative balance of $1,018,504.03. I know that y'all are in the middle of an audit but this type of activity on your accounts cannot continue.

Shane has done a tremendous job of collecting deposits and keeping me abreast of all developments (including multiple phone calls and emails daily) but even with his efforts the account still has a negative balance of close to $200K and this does not include the other overdrawn accounts. We truly value this relationship but when a customer has multiple accounts that are at the top of the overdrawn list, it is very difficult to continue to extend credit to a customer.”

Reagor replied an hour later, to Cecil and Steinmetz, according to Reagor-Dykes' new filing:

“I don’t want any red flags ever!!!!!!!! We are doing to good to ever have any red
flags! Toby please call me personally if there is ever a concern immediately!!!!!!!!
I called Toby and he told me he sent the email to make sure I was in the loop. Going
forward we agreed to make sure that we don’t ever let this situation develop again.”


Move ahead to March 17, 2017, Smith wrote that Cecil had "[l]ots of plates spinning.” Cecil responded to Smith’s email by noting: “I don’t know how you keep them [the plates] all spinning : )”

Again, all of the many claims laid out above are from Reagor-Dykes' bankruptcy attorneys. 


Vista Bank's response

The Bustos Law Firm, representing Vista Bank, said the above actions by Reagor-Dykes are "akin to a thief robbing someone, getting caught, pleading guilty to the felony, then suing the victim to pay for it all".

Here is Vista's full response:

After over a year and a half in bankruptcy, three failed attempts to reorganize, and racking up over $5 million in unpaid legal fees for the Chief Restructuring Officer and his lawyers, today they filed a complaint in a last ditch attempt to shake down Vista Bank for money before their upcoming February 12, 2020 bankruptcy hearing where they face potential forced liquidation.

As conclusively established by the twelve (12) criminal felony guilty pleas (with more surely to come) in addition to the overwhelming record of the pending criminal, bankruptcy and litigation proceedings involving the Debtors:

- The Debtors and their insiders perpetrated the frauds causing the Debtors’
insolvency and bankruptcy resulting in harm to Vista Bank as well as the Debtors’ other third-party creditors; and
- As detailed in its filed proofs of claim, Vista Bank suffered at least $13 million in damages as a direct result of this confessed fraud.
- Mr. Steinmetz paid over $120,000 in lease/buyout payments for the noted vehicles. Even if that was a ‘good deal,’ West Texans have too much common sense to believe Mr. Steinmetz would have sold his bank out to the tune of millions of dollars in order to save a few thousand on a couple of cars.
- Not a single bank or banker has been implicated in any of the RDAG guilty pleas.

For the CRO’s legal counsel to file this complaint is akin to a thief robbing someone, getting caught, pleading guilty to the felony, and then suing the victim to pay for it all.

Vista Bank refuses to be extorted by the criminals who ran Reagor-Dykes. For that reason, last month Vista Bank sued RDAG to preemptively defeat its frivolous claims. Attached is a copy of Vista Bank’s lawsuit.


Here is part of Reagor-Dykes Wednesday court filing:


Here is part of Vista Bank's filing on the matter from December 2019:




DEC. 24: Bart Reagor requests new trial or payment reduction in Ford Credit suit
DEC. 19: Reagor ordered to pay $26.5 million to IBC Bank
DEC. 16 11th former Reagor-Dykes employee pleads guilty
DEC. 11: Another former Reagor-Dykes employee pleads guilty
DEC. 11: Hearing to confirm Reagor-Dykes plan pushed back
DEC. 6: Reagor-Dykes attorneys answer Vista Bank's claims of extortion
DEC. 6: Reagor-Dykes asks for hearing delay, claims creditors approving reorganization
DEC. 5: New guilty plea shows intricate details of Reagor-Dykes check-kiting
DEC. 4: Vista: Reagor-Dykes attempting to 'extort' bank
DEC. 2: Bart Reagor ordered to pay nearly $1.8 million to Vista Bank
NOV. 26: Judge adds attorney fees to total payment in Ford Credit v. Bart Reagor
NOV. 7: Additional creditors object to Reagor-Dykes reorganization plan
NOV. 6: Two creditors object to Reagor-Dykes reorganization plan
NOV. 4: Eighth former Reagor-Dykes employee pleads guilty
NOV. 4: Vista Bank, FirstCapital Bank resolve lawsuit
OCT. 29: Dykes, First Bank & Trust settle
OCT. 28: Two more former Reagor-Dykes employees plead guilty
OCT. 16: Judge to rule in Vista Bank's favor against Reagor
OCT. 11: Hearing set on motion to convert Reagor-Dykes cases to Chapter 7
OCT. 10: Ford Credit takes issue with First Bank & Trust's liquidation request
OCT. 7: Now up to five: Two more former Reagor-Dykes employees plead guilty 
OCT. 4: Reagor-Dykes counsel asks to delay liquidation request
OCT. 4: First B&T: Reagor, Dykes using hearsay, speculation
OCT. 4: Judge denies Reagor's request to delay Vista Bank suit
OCT. 3: Jury orders Reagor to pay $53.7 million
OCT. 3: Vista Bank: Reagor unnecessarily delaying
OCT. 3: Judge issues gag order against Reagor, representatives
OCT. 2: Day 1: Ford Credit claims Bart Reagor owes $54 million
OCT. 1: Countersuit: Vista Bank wrongfully used Reagor's accounts
SEPT. 26: Reagor-Dykes reorganization proposal goes to a vote
SEPT. 20: More charges: Two Reagor-Dykes employees plead to bank fraud
SEPT. 12: First Bank & Trust proposes converting Reagor-Dykes bankruptcy to liquidation
SEPT. 3: Reagor-Dykes names primary investor in re-organization plan
AUG. 29: Objections remain in Reagor-Dykes' path to reorganization
AUG. 5: Trial date set in Ford Credit vs. Bart Reagor
JULY 12: International Bank of Commerce sues Ford Credit, claims damages tied to Reagor-Dykes collapse
JULY 11: Hearing on what Ford Credit claims Bart Reagor owes rescheduled
JULY 6: IBC Bank moves for summary judgment vs. Reagor, judge recuses himself
JULY 1: Reagor-Dykes files reorganization plan
JUNE 24: Bart Reagor states he had no knowledge of fraud, check kiting
JUNE 21:  Judge approves bankruptcy plan schedule for Reagor-Dykes
JUNE 19: Former Reagor-Dykes CFO pleads to federal conspiracy charge
JUNE 18: July 11 hearing set on amount Reagor owes Ford Credit
JUNE 17: Reagor: Ford Credit must show its work on how much it's owed
JUNE 3: Ford Credit: Bart Reagor owes $46 million plus interest
MAY 24: Ford Credit wins; court orders Reagor to pay
MAY 22: Progress reported in resolving Reagor-Dykes registration issues
MAY 9: Oklahoma bank sues Reagor, Dykes, offshore financial companies for $26 million
MAY 6: State of Texas sues Reagor, Dykes for more than $50,000 in sales taxes
APRIL 24: Reagor-Dykes registration issues may soon be resolved
APRIL 16: Bart, Annette Reagor deny breaching insurance corporation contracts in $2.4 million suit
APRIL 10: Progress but no agreement, just yet, on Reagor-Dykes TT&L plan
APRIL 8: Multiple objections filed to Reagor-Dykes' registration solution proposal
APRIL 2: Filing: Rick Dykes agrees to $58.7 million judgment to Ford Credit
MARCH 23: Universal Underwriters sues Reagors, claims Auto Group defaulted on contracts
MARCH 21: Vista Bank: FirstCapital Bank 'sealed the demise' of Reagor-Dykes with fraudulent agreement
MARCH 20: 700 Reagor-Dykes customers still have unresolved TT&L, trade-in
MARCH 19: Proposal could resolve many Reagor-Dykes registration, title issues
MARCH 19: Landlord: Reagor-Dykes Plainview abandoned in 'extreme disrepair'
FEB. 23: Dykes, Reagor response claims Ford Credit should have seen problems
FEB. 19: UPDATED: Reagor-Dykes mediation next week in Dallas
FEB. 15: Read order directing global mediation in Reagor-Dykes bankruptcy
FEB. 14: Judge orders Ford Credit to participate in Reagor-Dykes 'global mediation'
FEB. 11: Judge approves AmeriCredit's request for hearing on Reagor-Dykes Snyder
FEB. 8: Judge orders TT&L lists turned over to creditor, others request info
FEB. 8: GM Financial, citing 'little opportunity' for meaningful progress, requests access to relief
FEB. 8: Judge denies Reagor-Dykes request to delay summary judgment
FEB. 7: Landlord orders Reagor-Dykes out, another phone hearing next week
FEB. 7: Ford Credit objects to Reagor-Dykes' attempt at 'global mediation'
FEB. 6: First Bank & Trust opposes 'global mediation' for Reagor-Dykes
FEB. 6: Reagor-Dykes requests global mediation in bankruptcy
FEB. 6: Reagor and Dykes argue if Ford Credit was complicit in fraud, two men not responsible for $109 million+
JAN. 31: Reagor-Dykes seeks appeal of Bankruptcy Judge's order
JAN. 31: McDougal no longer involved in Reagor-Dykes re-organization effort
JAN. 28: Nearly 6 months later, hundreds of Reagor-Dykes customers still in limbo
JAN. 23: FirstCapital Bank allows Reagor-Dykes to use cash collateral
JAN. 18: Future uncertain for Reagor-Dykes Auto Group after recent ruling
JAN. 17: Judge: Ford Credit may repossess Reagor-Dykes vehicles
JAN. 9: Court approves Reagor-Dykes interim funding
JAN. 8: Reagor-Dykes, Ford Credit argue future of Auto Group in bankruptcy court
JAN. 8: Citing possible criminal investigation, former Reagor-Dykes CFO requests stay on discovery
JAN. 8: Ford Credit: Reagor, Dykes signed guaranties, should pay $112 million+ in relief
JAN. 7: Reagor-Dykes files reorganization plan
JAN. 7: 'Reagor-Dykes is not dead', Auto Group files response to Ford Credit's demands
JAN. 4: With no reorganization plan yet filed, Ford Credit seeks to take possession of Reagor-Dykes vehicles
JAN. 3: Lender asks bankruptcy court to force Reagor-Dykes legal team to produce documents

DEC. 26: UPDATE: Court allows Ford Credit lawsuit to proceed against Bart Reagor, Rick Dykes
DEC. 12: Slow progress reported on Reagor-Dykes customers' TT&L, trade-ins
NOV. 29: McDougal, Ewing and Dykes lead group to purchase Reagor-Dykes assets
NOV. 21 Former Reagor-Dykes CFO requests change of venue in lawsuit
NOV. 20: Toyota, GM file objections in Reagor-Dykes bid process
NOV. 14: State may extend titles for some Reagor-Dykes customers
NOV. 2: Five more Reagor-Dykes entities petition for bankruptcy
OCT. 29: Reagor-Dykes TT&L, trade-in issues remain unresolved; progress reported with some lenders
OCT. 29: Bart Reagor, Reagor Auto Mall claim First Bank & Trust party at fault
OCT. 29: Vista Bank asks to recoup funds in Reagor-Dykes accounts
OCT. 18: No resolution yet on Reagor-Dykes customers' unpaid TT&L, trade-in liens
OCT. 17: More lenders object to Reagor-Dykes' request for TT&L, trade-in payment
OCT. 16: U.S. Bank objects to Reagor-Dykes request for lenders to pay TT&L, trade-ins
OCT. 15: Compromise on vehicles in First Bank & Trust lawsuit v. Reagor Auto Mall
OCT. 15: Judge approves sale of Reagor-Dykes plane; Wells Fargo objects to portion of TT&L motion
OCT. 12: Ford Credit supports part of Reagor-Dykes' request for lenders to pay TT&L, trade-ins
OCT. 12: FirstCapital files counterclaim, motion to dismiss
OCT. 10: Reagor-Dykes aircraft to be sold, pending court approval
OCT. 10: Several filings in Reagor-Dykes bankruptcy case
OCT. 1: KamKad, Reagor-Dykes execute purchase agreement
SEPT. 24: FirstCapital Bank requests First Bank & Trust lawsuit against it, Reagor-Dykes, others move to federal court
SEPT. 21: Judge sets schedule, trial date in Vista Bank v FirstCapital Bank lawsuit
SEPT. 21: Former Reagor-Dykes CFO denies late payments, says Vista Bank attacked him, his family
SEPT. 20: Vista Bank sues former Reagor-Dykes CFO, claims loan default
SEPT. 19: Texas DMV: Reagor-Dykes should promptly resolve title issues
SEPT. 19: Brad, Kenneth Burgess file motion to dismiss Vista Bank lawsuit
SEPT. 18: First Capital Bank files motion to dismiss lawsuit
SEPT. 18: Court approves bid process for Reagor-Dykes Auto Group, extends use of cash collateral
SEPT. 17: Ford Credit, GM object to certain aspects of proposed Reagor-Dykes sale
SEPT. 14: Judge sets trial date in Ford Credit lawsuit vs. Reagor-Dykes
SEPT. 14: Reagor denies Ford Credit's claim vehicles sold out of trust
SEPT. 13: Dykes: Former Reagor-Dykes CFO admits he provided false info to Ford Credit
SEPT. 11: Reagor-Dykes Auto Group requests court to allow sale of company
SEPT. 4: Reagor-Dykes Auto Group establishes process to resolve customer problems
AUG. 31: International Bank of Commerce asks for court to allow it to foreclose on Reagor-Dykes dealerships
AUG. 31: More Reagor-Dykes companies, co-owners may soon file for chapter 11
AUG. 30: Court extends Reagor-Dykes employment of CRO; officer discusses potential dealership buyers
AUG. 29 : International Bank of Commerce asks for loan payment in Reagor-Dykes case
AUG. 29: Ford Credit objects to Reagor-Dykes earlier legal team
AUG. 27: Vista Bank doubles relief request in new federal suit against FirstCapital Bank
AUG. 25: Reagor-Dykes chief restructuring officer hires new legal team
AUG. 25: GM proceeding with termination of Reagor-Dykes Floydada
AUG. 23: Landlords demand rent for Reagor-Dykes dealerships in Lubbock, Plainview
AUG. 20: Ford Credit moves ahead with suit against Reagor, Dykes, some R-D companies
AUG. 18: Reagor-Dykes bankruptcy case: Read court order following Aug. 16 hearing
AUG. 17: Auto dealer claims Reagor-Dykes owes $513,000, vehicles may be in consumers' possession
AUG. 16: Vista Bank sues FirstCapital for $6 million, claims Dykes helped perpetrate check kiting scheme
AUG. 16: Bankruptcy court allows Reagor-Dykes continued use of cash collateral, hiring of CRO
AUG. 15: Reagor-Dykes Auto Group issues written apology
AUG. 14: Loss of Reagor-Dykes Chevrolet in Floydada a potential financial pitfall for city
AUG. 14: Vehicle auction company claims Reagor-Dykes owes it $687,000
AUG. 14: Ford Credit claims Reagor-Dykes is not following court orders; court grants extension to file docs
AUG. 13: U.S. Trustee opposes Reagor-Dykes request to hire chief restructuring officer
AUG. 10: Ford Credit: Reagor-Dykes fraud may be among largest of its type in U.S. history; GM files to terminate Floydada dealership
AUG. 9: Reagor-Dykes questions former CFO’s actions; Contractor claims $700,000 due now
AUG. 7: Former Reagor-Dykes employees claim they were not paid
AUG. 6: Customers concerned over Reagor-Dykes 'unwinding' process
AUG. 6: Ford suit against Reagor-Dykes on hold while bankruptcy case proceeds
AUG. 3: Judge approves Reagor-Dykes employee pay
AUG. 2: Mayor: Downtown Lubbock growth to remain strong regardless of Reagor-Dykes future
INITIAL STORY: Ford Motor Credit sues Reagor-Dykes; R-D files for chapter 11 bankruptcy


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