LUBBOCK, TX (KCBD) - Vista Bank filed a motion last week to try and recoup some of the money they claim to have lost from “bad checks” from Reagor-Dykes entities during their alleged multi-million dollar check kiting fraud.
The motion shows nearly $13.6 million in “bad checks” was deposited on July 30 and 31, 2018 into Vista Bank accounts for Reagor-Dykes. Once the checks were processed, and before they knew the checks were bad, a credit was applied to Reagor-Dykes' accounts. The motion states Reagor-Dykes entities then “immediately” wrote new checks on those accounts and transferred the funds out of the accounts.
On Aug. 1, 2018, the motion says RDAG filed their voluntary petitions for relief under chapter 11 of the Bankruptcy Code. On Aug. 2, Vista began receiving notices of the payor bank’s return and nonpayment of the bad checks. The return and nonpayment resulted in the reversal or “charge back” of the provisional credits in the amount of the bad checks, resulting in the accounts being overdrawn.
On the day RDAG filed for bankruptcy, the motion from Vista Bank says their accounts held approximately $103,000 from deposits. After they filed for bankruptcy, about $1 million was deposited into the accounts. The bankruptcy caused the accounts to be frozen. The petition is asking the court for the money in the accounts be made available to them to begin to recoup the money they say they were defrauded out of. However, the money deposited into the accounts is from third parties and maybe even some consumers. Vista is asking RDAG to provide a full accounting for the sources of the money to make sure only money from RDAG is involved in this motion.
A hearing has been set for Wednesday, November 14 for this matter.
Attorneys for Reagor-Dykes issued a complaint on Tuesday, Oct. 30, asking the judge to disallow any claims held by Vista Bank and to recover compensatory damages for Vista Bank’s “willful violations” of the automatic stay.
The complaint states RDAG suffered compensatory damages by Vista Bank’s willful automatic stay violations. “Vista Bank’s unlawful control over estate property has damaged RDAG’s ability to reorganize within these Bankruptcy Cases. The post-Petition Date funds unlawfully retained by Vista Bank should have been delivered to RDAG and made available for RDAG’s use in accordance with the Bankruptcy Code and Court orders. Vista Bank is liable for all actual damages sustained by RDAG as a result of Vista Bank’s willful automatic stay violations.”