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“He knew what he was doing was wrong:” Prosecutors argue against Reagor acquittal

Bart Reagor walks into the Amarillo Federal Courthouse on day one of his bank fraud trial.
Bart Reagor walks into the Amarillo Federal Courthouse on day one of his bank fraud trial.(KCBD NewsChannel 11)
Published: Dec. 20, 2021 at 3:31 PM CST|Updated: Dec. 20, 2021 at 3:32 PM CST
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LUBBOCK, Texas (KCBD) - Federal prosecutors say there was “overwhelming evidence” supporting the jury’s decision to convict Bart Reagor of making false statement to the International Bank of Commerce, and he knew his plan to acquire and distribute proceeds from a business loan was “dishonest and wrong.”

This, one week after Reagor’s defense team moved for acquittal from the charge.

In documents filed Monday, Prosecutors say Reagor’s motion “blatantly disregards” standard approach to criminal procedure, failing to give weight to the fact Reagor was found guilty by a jury, who “found the essential elements of the offense charged beyond a reasonable doubt.”

On December 13, Reagor filed a motion for the court to acquit the charge he was convicted of in October: false statements to the IBC about his intent to move more than $1.7 million of a $10 million “working capital” loan into accounts for his own personal use.

Reagor’s defense argued evidence presented at trial was insufficient because the government failed to define “working capital” as it relates to the “working capital” loan, from which Reagor took money and put it into personal accounts through “owner distributions.”

The defense claims these distributions were reimbursements for personal investments made into RDAG before the loan. In trial, prosecutors presented personal financial statements showing Reagor owed RDAG more than $5 million.

The acquittal motion and the prosecutors’ response to it cite several witnesses from Reagor’s trial, including former RDAG CFO Shane Smith and Legal Compliance Director Steven Reinhart. The defense says they struggled to define “working capital,” or what it could be used for, arguing Reagor could not have made a false statement about “working capital” because he didn’t know the statement was false when he made it.

“As he does throughout his motion, Reagor applies the wrong analysis,” Prosecutors stated. “All inferences must be drawn in favor of the jury’s verdict. Accordingly, this response will discuss the only permissible inference from Reagor’s concealment of his plan: He knew what he was doing was wrong.”

In response to the acquittal motion, prosecutors say rather than canvassing the record for agreement on the meaning of “working capital” to determine whether Reagor’s use of the loan for personal expenses was permitted, the Court has to give credit to the evidence that led jurors to their decision to convict.

Prosecutors and the defense referenced the same line of testimony from Steven Reinhart, who said he would have told Reagor he could not divert the loan proceeds to personal accounts, had he been consulted.

Reagor’s choice on who to consult over handling of the loan was a key matter to prosecutors, citing an email entered into evidence from Reagor to Shane Smith and Rick Dykes. In the email, Reagor discussed how the IBC loan would be used and that it was “not anyone’s business,” including “no bankers or anyone else.”

Prosecutors claim Reagor chose who to notify in the email specifically, because he knew Smith “would not question the propriety of diverting a business loan for personal use,” and Dykes stood to gain money from this plan, so he would not challenge it. According to prosecutors, testimony and evidence support the inference that Reagor intentionally excluded RDAG attorneys and IBC representatives who “could have approved (or disapproved) of an owner distribution.”

“The Court must presume that the jury used this evidence to logically surmise that Reagor instructed Smith and Dykes to keep his plan a secret because Reagor knew that his intention to use the IBC business loan for personal expenses—on things like his mansion, investments, and disbursements to family members—was dishonest and wrong,” Prosecutors said.

The argument from prosecutors also cites video which they say captures Reagor’s motive and intent, with Reagor describing his method for building wealth: “talk other people into giving you their money so you can use their money to increase your net worth. That’s what I did.” Reagor continued, “most of y’all have no comprehension of the s--t I’ve pulled off in this lifetime.”

Prosecutors say this statement was made after the first piece of the disputed loan had already been distributed.

Prosecutors referenced another recording of Reagor stating his displays of wealth made him “a bad motherf-----er.” Prosecutors add, “Reagor’s self-image and self-worth were inextricably intertwined with his personal wealth and that led him to maintain his personal wealth by any means necessary, including deception.”

Both recordings were presented to the jury in trial as evidence of Reagor’s intent behind the false statement, something prosecutors say jurors must have considered when deciding to convict on the false statement charge.

Prosecutors argue: “the jury had compelling evidence that Reagor knew his statement was false because, prior to making it, he had already formed the intent to divert a portion of the proceeds, and he knew the diversion was wrong because he actively concealed it from IBC and from his own legal and compliance officers.”

Reagor, whose sentencing is set for February 24, 2022, in Amarillo, faces up to 30 years in federal prison for the charge of false statement to a bank.

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