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Inside The Courtroom For Bart Reagor's Trial

Bart Reagor
Bart Reagor

Tuesday was the first time Shane Smith took the witness stand. He kept his responses to attorneys’ over three hours of questioning brief.

When a prosecutor asked, “Is it fair to say you’ve committed pretty much every kind of fraud you could?” he replied “Yes.”

Smith, the former chief financial officer at Reagor Dykes Auto Group, faces his own prison sentence for his role in orchestrating the bank and automotive fraud schemes that led to the implosion of the regional car dealerships in 2018. He’s accepted a plea agreement that carries a possibility of a 20-year sentence, though his testimony Tuesday as the government’s witness could shorten that.

He maintains the heads of the business, Bart Reagor and Rick Dykes, knew nothing about the grave Smith was digging the company into.

But in his testimony, Smith said Reagor instructed him to divert a third of a $10 million business loan to Reagor’s and Dyke’s personal bank accounts. Now, Reagor is on trial and faces up to 90 years in prison for two counts of bank fraud and one count of making false statements to a bank.

Attorneys referred to the message with instructions to divert the money as the “all-caps email,” sent before the loan from International Bank of Commerce officially cleared. In it, Reagor emphasized that this needed to stay “100,000,000% CONFIDENTIAL.”

“OUR BUSINESS GAME ON!!!!!!!” read the last line of the message.

Smith said he was frustrated when he got the email. He testified that he knew it wasn’t the right thing to do, but he claimed to not know it was illegal. He said that money was needed for working capital as the car business grew - which was the intended purpose of the loan. Still, he didn’t push back. Smith began his email response with “Awesome” and finished it by saying he would put his life on the line for his employers, because he respected and cared for them so much.

Tuesday was the first time Smith said he had seen Reagor since August 2018. The two did not directly interact, but when asked if he still cared for his former mentor, Smith said he did. He said that he knew that probably was not mutual.

Smith was the fourth witness to testify in the trial that started in Amarillo Monday and is expected to go through the week.

In opening statements, prosecutors said, “This case is about a plan. A plan that defendant Bart Wade Reagor wanted to keep secret.” They said it was Reagor’s intention all along to keep a portion of the business loan.

Reagor’s attorneys claimed he saw it as paying himself back for personal money he put into the business.

Lead Attorney Dan Cogdell described Reagor as “an interesting character” with a Type A personality to the extreme. He said he was a hell of a salesman - who left financial matters up to his team. Video and audio evidence of Reagor in sales meetings, like what was published by the Lubbock Avalanche-Journal in 2018, illustrated that for the 14-person jury.

Smith, in his testimony, said he doubts Reagor read the loan agreement he’s now accused of violating. He said his boss only wanted to talk about positive financial matters, and even then, he asked for few details.

But it was made clear during testimony that Reagor did most of the talking when leaders of International Bank of Commerce visited Lubbock in April 2017. The bankers had some connections to the car dealers and were impressed by their business strategies and growth. The bank approved a loan to consolidate some real estate investments and give Reagor Dykes Auto Group the working capital they needed to keep up the business’s success.

Two bankers and a lawyer who worked on the loan agreed they would not have approved it had they known a portion of the money would go to Reagor and Dykes. Lawyer Thomas Hutchison noted in his witness testimony that this case is an example of why there is a legal difference between a business entity and the individuals who run it.

International Bank of Commerce claims they’ve lost more than $28 million on the loan. Cogdell, Reagor’s attorney, said that also was likely impacted by the implosion of the auto group.

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Have a news tip? Email Sarah Self-Walbrick at Follow her reporting on Twitter @SarahFromTTUPM.

Sarah Self-Walbrick is the news director at Texas Tech Public Media, where she leads the news team and focuses on underreported stories in Lubbock. Sarah is a Lubbock native and a three-time graduate of Texas Tech University. She started her career at the Lubbock Avalanche-Journal.