Bart Reagor moves for acquittal on false statement charge, date set for hearing on $1.7 million forfeiture

Bart Reagor moments after the verdict is in. He was found not guilty of bank fraud and guilty...
Bart Reagor moments after the verdict is in. He was found not guilty of bank fraud and guilty of false statement to a bank.(KCBD NewsChannel 11)
Published: Dec. 13, 2021 at 8:20 PM CST
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LUBBOCK, Texas (KCBD) - New documents from the defense team for Bart Reagor ask for acquittal from the judge on the charge Reagor was found guilty of in October, saying prosecutors did not adequately define or prove Reagor lied about the loan from the International Bank of Commerce.

In trial, Federal prosecutors claimed Reagor violated the loan agreement when he moved nearly $2 million out of a $10 million note into his personal account.

On October 15, after multiple deadlocks, Reagor was found not guilty by a jury on two charges of bank fraud, but guilty of making a false statement to the International Bank of Commerce about his intentions of using $1.7 million in “working capital” from IBC to Reagor-Dykes Auto Group.

In the motion to acquit the false statement charge filed by Reagor on Monday, December 13, the Defense states the evidence submitted at trial “was insufficient to sustain Reagor’s conviction” because prosecutors failed to define the term “working capital,” as it relates to Reagor’s case.

The Defense claims RDAG applied for the “working capital” loan, and then reimbursed themselves ”through documented owner distributions—for money they had personally invested” into the company prior to the IBC loans. According to the Defense, IBC only identified the distributions because of the floor plan fraud scheme they say is unrelated.

“There is nothing the government can point to in the evidence in this trial that the jury could have construed as demonstrating Reagor’s subjective intent,” the motion states, arguing prosecutors could not prove Reagor acted with knowledge of the false statement because “no government witness testified to what Reagor meant when he used the term ‘working capital.’”

According to the motion, the loan agreement between RDAG and IBC also did not define the term “working capital” or what it could or could not be used for; and they say prosecutors did not prove Reagor knew beforehand that “working capital” meant no distributions. “The government presented no evidence that Reagor knowingly misled the bank when he allegedly told them he planned to use the loan proceeds as working capital.”

Reagor’s defense calls for an acquittal on the false statement charge, or a new trial.

This motion follows response from Reagor’s defense team calling for a hearing over forfeiture of that $1.7 million from Reagor, ordered by the court in early November.

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“The testimony and evidence established that Reagor obtained $1,760,000 as a result of the false statement... and subsequently spent or dissipated the $1,760,000,” the forfeiture order stated. When Reagor’s defense “failed to file a timely response” to the forfeiture order, U.S. District Judge Matthew Kacsmaryk called for an explanation.

The defense responded less than a week later, saying the forfeiture rests on proving the elements of False Statement to a Bank, which they claim prosecutors did not do, specifically, “the amounts Reagor actually obtained as a result of the false statement.”

Last week, Judge Kacsmaryk scheduled a hearing for February 9, 2022, at 10 a.m. in the U.S. Courthouse in Amarillo.

Prosecutors are also ordered to file a reply to the defense on or before December 31, 2021.

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