LUBBOCK, Texas (KCBD) - A total of eight people have now pleaded guilty for their role in the Reagor-Dykes “fraud scheme,” according to the U.S. Attorney for the Northern District of Texas. The investigation reveals more than $40 million worth of “collateralized inventory that RDAG was unable to produce for inspection,” according to court documents.
The FBI interviewed multiple current and former RDAG employees who confirmed six dealerships submitted fraudulent requests for advances on the floor plan loan.
Brad William Fansler pleaded guilty to conspiracy to commit wire fraud on Monday in an Amarillo federal court. He, like many of the others who have pleaded guilty, communicated through email discussing the fake flooring.
One email from Fansler said, "Big flooring today! Needs as much real first then cover the rest with “stuff.” He also emailed, “Need to help the bank out today. Big flooring (as much as possible) and big deposits.”
According to court documents, Fansler was hired by RDAG in 2014 and later became the Group Administrative Director.
Pepper Laray Rickman, 47, and Sherri Lynn Wood, 53, pleaded guilty to conspiracy to commit wire fraud before Magistrate Jude Lee Ann Reno in Amarillo in late October.
Rickman and Wood are two of seven employees who have confirmed their role in the $50 million Reagor-Dykes fraud. Admitted co-conspirators include Reagor-Dykes Chief Financial Officer Shane Andrew Smith and employees Sheila Miller, Lindsay Williams, Diana Urias, and Paige Johnston.
In plea papers, Rickman, accounting controller at Reagor-Dykes Plainview LP (a Toyota store in Plainview, Texas), and Wood, office manager at the Reagor-Dykes Auto Company LP (a Ford store in Plainview), admitted the auto group participated in a fraudulent floor plan fraud scheme.
In a practice accounting staff dubbed “dummy flooring,” “fake flooring,” or “re-flooring,” employees dug through records for vehicle identification numbers (VIN) of cars Reagor-Dykes had already sold, then submitted new loan applications to Ford Motor Credit Company using the old VINs – falsely indicating that the company was seeking a loan in order to repurchase the vehicle for resale, Rickman and Wood said in plea papers. After acquiring the new floor plan funding, instead of re-buying the car, Reagor Dykes used the ensuing loan to cover other expenses.
The company’s accounting staff submitted the false information via interstate wire communication, the defendants admitted.
Rickman and Wood each face up to five years in federal prison and may be required to pay at least $27 million in restitution.
Fansler’s sentencing has not been scheduled as of this report.