Has anyone been following Lubbock based Reagor-Dykes Auto Group fraud scheme? Massive rip-offs involving loans for personal uses, wire fraud, dummy flooring (requesting loans for cars they already sold) and check kiting (depositing a check in multiple banks). When they declared bankruptcy in 2018, 900 customers were affected by TTLs and trade-in liens.
Fifteen employees have been sentenced to jail, with owner Reagor Dykes getting 14 years.
CFO Shane Smith got seven years in the federal pen:
No wonder they are called "Stealerships".
Fifteen employees have been sentenced to jail, with owner Reagor Dykes getting 14 years.
https://www.lubbockonline.com/story/news/courts/2022/03/10/federal-judge-sentences-bart-reagor-10-million-bank-fraud-reagor-dykes-auto-group-dealership/9450742002/Quote:
The verdict came after a week-long trial during which jurors heard from IBC president William Schonacher, who said he believed the $10 million loan would be used as working capital for RDAG. He said he would not have approved the loan had he known Reagor would be using portions of it for his personal use.
Records show Reagor diverted about $1.76 million of the loan into his personal bank account and used it for personal expenses.
Reagor's case stems from an FBI investigation that arose as agents looked into a $50 million floor-dummy and check kiting scheme uncovered by Ford Motor Credit, which lent RDAG money for the vehicle in the dealerships' inventory.
Investigators found that former RDAG chief financial officer Shane Smith recruited 14 employees to fake records to delay paying back Ford Motor Credit after selling the vehicles. All the defendants in that case pleaded guilty to their roles in the scheme, which is regarded as one of the largest fraud cases in the auto industry.
The scheme also involved a check-kiting scheme that used transaction delays to artificially inflate the company's bank accounts to cover its checks.
CFO Shane Smith got seven years in the federal pen:
https://www.lubbockonline.com/story/news/2021/05/14/two-more-ex-reagor-dykes-auto-group-employees-sentenced-federal-prison/5094315001/Quote:
According to court documents, Smith enlisted the RDAG employees in a check-kiting scheme to manipulate financial records to artificially inflate its accounts to trick its banks into honoring payments for payroll and other expenses.
He and the other employees also admitted to using Vehicle Identification Numbers of vehicles they already sold to apply for loans from Ford Motor Credit and used the borrowed money on other expenses.
No wonder they are called "Stealerships".
