By on August 13, 2018

The Reagor Dykes Auto Group was formed in 2006 after Bart Reagor, shown above, teamed up with a business partner to create a company that now eclipses half a billion dollars in annual sales. This is accomplished through a myriad of manufacturer franchises ranging from Ford to Chevy to Toyota, not to mention its dozen or so rooftops dealing solely in used cars.

Now, the company is facing allegations of major financial chicanery. In court documents filed last week, Ford Motor Company accuses Reagor Dykes of running one of the “largest floor-plan financing frauds in the history of the United States.”

Now, recognizing my legal training is assembled solely through the viewing of Night Court reruns, I will attempt to explain the allegations to the best of my ability. Feel free to click on the links to various sources throughout this post for more details.

In July of this year, Ford conducted a surprise audit. There’s a pair of words most people — whether they own a business or not — never want to see next to each other.

Ford claims Reagor Dykes Auto Group “breached their agreements with Ford Credit by, among other breaches, selling vehicles ‘out of trust,’ failing to make required payments to Ford Credit as and when due, and submitting false or inaccurate information to Ford Credit in order to delay paying amounts to Ford Credit and/or to obtain financing from Ford Credit under false pretenses.” That text is taken from a lawsuit filed last week.

Understanding the crux of this issue depends on a crash course in dealership terminology. In this instance, “out of trust” refers to the sale of a car that has been paid for with a loan but the sale proceeds have not been used to pay back the lender. This creates an unsecured debt the dealer then owes to the finance company. Allegedly, this was a big problem at Reagor Dykes.

Floorplanning is is a type of short-term loan used by dealer to purchase their high-cost inventory of cars. Most stores floorplan their vehicles and factor the cost of financing inventory into their sale price. You can imagine the manufacturer wants to get their money back as soon as possible. We’ll leave the definition of holdback for another day.

Back to the “out-of-trust” term. Let’s imagine Store A represents to Ford Credit it has purchased a Ford Explorer for $40,000. In response, Ford Credit advances $40,000 in acquisition financing to this store. Then, unbeknownst to Ford Credit, Store A transfers the Ford Explorer to Store B, another store in the same dealer group. Store B then fraudulently represents to Ford Credit that it has purchased a Ford Explorer for $40,000, which prompts Ford Credit to advance an additional $40,000 in financing to Store B. You see the problem.

It gets worse. Ford Motor Credit also claims other financiers advanced monies to the tune of $3.7 million to Reagor-Dykes for acquisition of 115 vehicles that were already floored by Ford Motor Credit. Phew. That’s a lot of cheddar.ford lincoln plainview

In addition, it is alleged that a full 25 percent of Reagor Dykes inventory was listed as “Sold Not Due,” meaning those vehicles were sold days earlier and money was not yet due to Ford Motor Credit. Ford says this means Reagor Dykes either sold that inventory within the previous week, or they were falsifying their sales dates. Not cool, said Ford.

Investigators with Ford Motor Credit are said to have determined that Reagor Dykes falsified 147 out of 150 reported sales dates. Ford Motor Credit says on average, a discrepancy of 55 days existed between reported sales dates and Texas DMV records.

From Automotive News:

On July 28, Gary Byrd, Jr., Ford Credit’s regional manager for the Dallas area, met with Bart Reagor. It didn’t go well. Byrd told Reagor about the discrepancies, said Ford Credit was asking to be paid funds owed to them and that auditors would be returning next Tuesday.

“Bart Reagor became enraged, screamed at me, ‘No, you are not’, and threatened to ‘shoot my f—— ass’”, a threat he repeated in a later text, Byrd said.

If you can’t stand the heat, etc.

According to Automotive News, Ford Credit send in a corporate security team and sued Reagor Dykes on July 31st. One day later, several Reagor Dykes dealerships and related companies filed for Chapter 11 bankruptcy protection.

I always feel for the employees caught in the fallout. Reagor-Dykes employs hundreds of employees and, as of this writing, the dealerships are still open. One can’t imagine the floor traffic is too high this morning. This makes me sad for the folks who have toiled at this business but are now caught up in a mess of someone else’s creation. According to the Reagor Dykes dealer website, Bart Reagor is a former Texas Tech University football player, has over 27 years of experience in the retail automotive industry, and is “active in local charities.”

This puts your author in mind of a similar shituation befalling a well-known auto dealer named Tom Woodford Chrysler in the capital city of his home province. Long located in a two-story building at the base of Kenmount Road, it shuttered its doors in 2009 after the Canada Revenue Agency filed 31 separate counts of breaching the Excise Tax Act against both Tom Woodford Limited and Mr. Woodford himself. Accusations were flung about regarding $6.6 million in unpaid taxes.

The dealership quickly went dark after tow trucks appeared to whisk the inventory away. Its employee base, including Woodford’s three grown children (who themselves are wonderful people), was largely absorbed into Newfoundland’s tight-knit automotive community. Mr. Woodford passed away four months after the tax man came calling and, after serving as a temporary home for a myriad of other marques as they themselves constructed new dealerships, the building was demolished in 2015.

Don’t play with numbers, kids. Someone’s always watching. Fireworks, indeed.

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67 Comments on “Playing With Numbers: Texas Dealer Accused of Major Fraud...”


  • avatar
    DeadWeight

    Did Bart Reagor drive off while Gary Byrd, Jr. was in his office, trying to track down the VIN# of a champagne colored Cutlass Ciera, like Jerry Lundergaard, after threatening to shoot Byrd?

    And you have to hand it to braniacs at Ford Credit – a real bunch of Sherlock Holmes’ working there:

    “Back to the “out-of-trust” term. Let’s imagine Store A represents to Ford Credit it has purchased a Ford Explorer for $40,000. In response, Ford Credit advances $40,000 in acquisition financing to this store. Then, unbeknownst to Ford Credit, Store A transfers the Ford Explorer to Store B, another store in the same dealer group. Store B then fraudulently represents to Ford Credit that it has purchased a Ford Explorer for $40,000, which prompts Ford Credit to advance an additional $40,000 in financing to Store B. You see the problem.”

    Ford Credit failed to track so during as simple as a factory VIN # on a new vehicle that they supplied, allowing the same vehicle to be “sold” 2x, within the same dealership!

    Brilliant!

    • 0 avatar
      DeadWeight

      p.s. – Vehicle dealerships are slimy, primordial ooze-type places, run by sociopaths and psychopaths, one DNA mutation away from pond scum.

      Wear a full body condom before entering.

      PAGING RUGGLES!

    • 0 avatar
      sportyaccordy

      Cliff notes:

      How did Ford miss this? Aren’t they tracking these transactions via the VIN numbers?

      (indiscernible hyperbole, insults and pleas for attention)

      • 0 avatar
        DeadWeight

        Super-boring, zero-personality bought off the rack Accord appliance driver above:

        “Wah Blah Wah Blah-“

        • 0 avatar
          JohnTaurus

          LMAO. He doesn’t drive an Accord, but you’ve never let ignorance stop you from trolling before.

          • 0 avatar
            DeadWeight

            Quiet!

            This doesn’t concern you unless he/she can’t speak for him/her self.

            *p.s. – Did you manage to get out of the house Friday night, Saturday, Saturday night, or yesterday? Take in some outside experiences, bro. It really will do you some good.

        • 0 avatar
          sportyaccordy

          I haven’t owned an Accord in a decade, so there’s that.

          The difference between you and I is the worst thing you can say about me is that you don’t understand my screen name. I’ll take that charge over your legacy of desperate hyperbole, self-aggrandization and general stupidity over that same decade.

          Ford goofed. We all agree there. All the other nonsense you spew with a frothing mouth and broken keyboard has long worn thin.

      • 0 avatar
        JohnTaurus

        Nahh, it can all be summed up (like 99.9% of his posts) as follows:

        “Hey everybody! Here’s my @$$, yeah! Nasty isn’t it?! Here it is, everybody see? LOOK AT ME! ATTENTION! Oh, you looked, yep its my @$$ again! Ha ha! Gotcha! Oh… And here are some cherry-picked facts, out of context, and pretty much irrelevent. And, one more time! Here’s my @$$ again! Yay me!”

    • 0 avatar
      stingray65

      I guess the TruCoat sales just weren’t strong enough to keep the stores in the black without chicanery.

    • 0 avatar
      RHD

      Your comment is awaiting moderation.
      This puts your author in mind of a similar sh*tuation befalling a well-known auto dealer named Tom Woodford Chrysler in the capital city of his home province.

      And thus a terrific new English word has been coined. Please advise the good folks at Oxford.

      I guess the commenters get censored, I mean, moderated, but the authors don’t.

    • 0 avatar
      bullnuke

      Shades of John McNamara and the GM swindle. To the credit of Ford, they caught this guy before the $436M level…

  • avatar
    RHD

    This puts your author in mind of a similar shituation befalling a well-known auto dealer named Tom Woodford Chrysler in the capital city of his home province.

    And thus a terrific new English word has been coined. Please advise the good folks at Oxford.

  • avatar
    Cactuar

    I always find it hilarious when dealers or their CEO’s highlight the fact that they are “involved” in the community. It’s as if they use their limited community involvement as a cover for their dishonest business practices. We financed the hot-dogs at the little league game! Trust us, we’re good guys! BS. They’re all crooks.

    • 0 avatar
      Jason Eckert

      It is easy to be generous with other people’s money. They had us all fooled in this area, thinking they were great for the community and philanthropists. I laugh at the articles that say it is in the best interest of all parties they stay open. I can’t imagine anyone within 1000 miles ever dealing with this company again. That ship has sailed and a lot of innocent folks are gooing to get hurt. 

    • 0 avatar
      Lou_BC

      @Cactuar – The “principal” of the local FCA dealer was always advertising how active he was in the community too until his wife got a good divorce lawyer. He later got nailed for multiple counts of “misleading” advertising and sales practices. Even though he was a son of the owners of a very large franchise chain, he left “under mutually agreed terms”.

    • 0 avatar
      bunkie

      I have a general car dealership rule that has, mostly, proven to be true: The larger the US Flag they fly is, the slimier they are likely to be.

  • avatar
    indi500fan

    In this era of “big data” I’m a bit surprised that there’s no database by VINs of floor planned cars to prevent this multiple loans per vehicle scam.

    If Joe Sixpack goes to try and get title loan on his car financed by Ford Credit, it will probably be about 30 seconds before he’s on his way back out the door.

    • 0 avatar
      JMII

      Agreed. The scam seems impossible – item #1 on all vehicle paper work is the VIN. Does Ford not track their inventory? They must know which VIN is where and if it has sold or not. Heck CarFax has this information so it can’t be that hard. And for sure the DMV has this information so they can issue a license plate and registration paperwork since they want their tax money.

    • 0 avatar
      Scoutdude

      I’m betting they were mainly just trying to play the float when they hit up FMC for the same vehicle twice. Working the Sold but not Due, loophole until they pushed it too far.

    • 0 avatar
      bunkie

      There’s a huge disconnect between the hype about “big data” and the IT systems that many legacy organizations actually run. This is, largely, due to the nature of budgets and organizations. If you have something that “works” (even if it’s ancient), getting large-scale money to replace it is about as easy as getting out of sleazy dealership without being subjected to the four-square. The reality is that organizations dribble away begrudged budget on constant fixes and patches until they have spent far more than they would have on a replacement of the legacy system.

  • avatar
    pale ghost

    They sell GM, Toyota and Mitsu in addition to Ford. Wonder if they were getting hosed over too or if Ford’s internal controls are so weak they were the only victim.

  • avatar
    Hoon Goon

    These guys have a solid future in politics if they so chose.

  • avatar
    VW4motion

    This is Texas and they do think they live by a different value system.

  • avatar
    Kyree S. Williams

    What a sorry excuse for a dealership. The question is now how many employees were complicit in this scam. The salespeople probably weren’t, but the F&I personnell and general manager? Almost definitely.

    • 0 avatar
      bking12762

      There have been cases where the bank employees were complicit also.

    • 0 avatar
      DeadWeight

      There is no doubt multiple employees are involved and will likely be charged with various felonies.

      If convicted, they will have the book thrown at them by a hanging judge, and spend a good chunk of time in prison.

      In the interim, there was exactly one bank in the wake of the GINORMOUS scam that led to the 2008-2011 economic meltdown because Timmy Keebler Elv Geithner, Larry Narcoleptic Summers and other Bush II/Obama officials had the backs of all-4-Wall Street financial instutions & Too-Big-To-Fail Banks that made literally hundreds of billions engaging in known fraud related to MBS and CMBS.

      What bank was singularly charged for MBS/CMBS fraud, you ask?

      https://www.marketwatch.com/story/the-story-behind-oscar-nominated-bank-documentary-abacus-small-enough-to-jail-2018-02-27

      Director Steve James (‘Hoop Dreams’) tells MarketWatch about ‘Abacus: Small Enough to Jail’ and the trial of a family-run, Chinese community bank

      WELCOME TO THE NEW 1920’s, AMERICAN PEONS, AND OBEY YOUR BENEVOLENT FINANCIAL MASTERS OF THE UNIVERSE THAT OWN YOUR “ELECTED REPRESENTATIVES.”

      THEY ARE STILL DRAINING THE SWAMP!

      • 0 avatar
        Astigmatism

        “In the interim, there was exactly one bank in the wake of the GINORMOUS scam that led to the 2008-2011 economic meltdown because Timmy Keebler Elv Geithner, Larry Narcoleptic Summers and other Bush II/Obama officials had the backs of all-4-Wall Street financial instutions & Too-Big-To-Fail Banks that made literally hundreds of billions engaging in known fraud related to MBS and CMBS.”

        All of which just goes to show, if you’re going to commit fraud, your best bet is to commit the legal kind. It’s the illegal fraud that’ll get you.

      • 0 avatar
        Lou_BC

        “THEY ARE STILL DRAINING THE SWAMP!”

        Deregulation means the swamp is now filled with carcinogenic toxic waste.

  • avatar
    tsarcasm

    Sure that wasn’t Jerry Lundegaard from Gustafson Motors?

  • avatar
    87 Morgan

    While this is a shame, and will be a hardship for the employees in the short term they will have jobs. The businesses still have a value and the representatives of each factory are most likely working diligently to have another dealer group take over the stores. Similar deal happened here with a Kia store, an owner who had several other functioning and compliant Kia stores took over the out of trust store. I am sure their was a buy/sell completed over time but the factory wants to the store open.

  • avatar
    SCE to AUX

    Well, I guess this explains why Ford, Honda, etc can’t locate the vehicles in the wild with ticking Takata airbags – they don’t track VINs, apparently.

  • avatar
    jalop1991

    “Understanding the crux of this issue depends on a crash course in dealership terminology.”

    No, it depends on watching Fargo.

    • 0 avatar
      sgeffe

      Exactly! +infinity!

      “‘Da heck do I mean?! You’re darn tootin’! Well, we’ve never done this before. But seeing as it’s special circumstances and all, he says I can knock a hundred dollars off that Trucoat!”

  • avatar
    KevinC

    Is it just me, or does this Reagor cat look a helluva lot like Alex Jones?

  • avatar
    Whittaker

    Searched “Reagor Dykes Auto Group” on the Better Business Bureau website. It says…
    “BBB’s information on this company is being updated, and no report is available at this time.”

    You cannot read previous review or complaints for this previously BBB accredited business.
    LOL.

  • avatar
    Tele Vision

    Please look up the correct usage of the word ‘myriad’.

  • avatar
    phlipski

    I just drove through the west Texas area around Lubbock this past July on my way to Colorado. I saw these “Reagor-Dykes” billboards with their smiling mugs on them all over the place! I thought to myself, “How can there be this many shiny new billboards for an auto dealer in a section of Texas that looks like it’s in a depression?!?” The metropolis’s of Austin/Houston/Dallas may be booming but the small towns (save the quaint retiree hamlets) are dying! This story explains it all.

    • 0 avatar
      dukeisduke

      Lubbock is hardly in a depression, and it’s not small (260,000 people).

    • 0 avatar
      George B

      Lubbock is the closest place with city amenities for a large area of West Texas and eastern New Mexico. A group of car dealerships in Lubbock probably draw customers from both the city of Lubbock and a large surrounding area. Lots of men work in the Permian Basin to the south and then spend their money in places like Lubbock.

      https://www.bloomberg.com/news/articles/2018-08-07/welcome-to-the-man-camps-of-west-texas

  • avatar
    Pete Zaitcev

    Apropos to Ford trying to establish new dealerships for Lincoln.

  • avatar
    pwrwrench

    Remember the line from Full Metal Jacket, “TEXAS! There ain’t but two things in Texas, ….”
    I read and hear about these dealer “creative financing” tactics on a regular basis. It’s common for stealerships to be behind on their flooring payments or delay paying off a vehicle when it gets sold. I’m sure manufacturers know this and have to put up with it to some extent. When things get past 120 days or there is the ‘get two loans for one vehicle’ that Reagor was doing, that’s when the credit people and banks start with the letters, faxes, emails, and phone calls.
    When I was running my business I knew a guy that supplied dealers and workshops with things like antifreeze and hose clamps. He had to contend with the same problem. Stealerships would get behind on paying him. Then he had a choice, cut them off and hope to collect on the past due bill, or keep sending them product and hope that they sell enough cars, parts, and F & I to get out of the hole.
    About once a year a stealership would go BK or the principles would disappear. Then he would be stuck with the loss.
    I bet the car makers are facing a similar dilemma. If the place gets no cars to sell they can’t make any money to pay for the previous “deals”, Tru-coat or no Tru-coat.

  • avatar
    PeriSoft

    “Bart Reagor became enraged, screamed at me, ‘No, you are not’, and threatened to ‘shoot my f—— a*s’”

    This strikes me as a sub-optimal tactic vs. the person who decides whether or not to finance your business operations.

  • avatar
    Stumpaster

    That video, wow – quintessential sleazy car salesman, puffy watery eyes, unshaved face and all. Wake’n’bake from a coke binge, that’s what it’s called.

  • avatar
    dukeisduke

    I remember in Ye Olden Days (the 1980s) that when a GM dealership was taken over by GMAC, the name on the dealership was temporarily changed to “PATLAN”, the name Patlan supposedly being the last name of some executive at GMAC. I can remember it happening to at least a couple of dealerships in the Dallas area – the former Late Chevrolet in Richardson (now the home of Reliable Chevrolet), and the former Parkway Pontiac-GMC in Plano. In both cases, the dealerships were in trouble with the state for not forwarding state sales tax proceeds. There were stories on the news about customers unable to get license plates from the dealer, and instead getting a succession of paper dealer tags as each one expired (they were just 10-day tags at the time).

    I’ll bet that if Reagor-Dykes was screwing Ford Credit, they were probably also screwing the state comptroller’s office out of taxes due, and will be getting sued by the Attorney General’s office. Not good.

    I might also be hearing some scuttlebutt about this soon, as my mother-in-law’s next-door neighbor mentioned one time that one of her relatives (a brother, maybe?) knew Bart Reagor at Tech. The plot thickens.

  • avatar
    dukeisduke

    Here’s a pretty good rundown of the story in the Lubbock paper, and includes information for car buyers (about title transfers, mainly) and employees. There’s a bankruptcy court hearing on Thursday to determine whether a court-appointed trustee will run the bankruptcy cases, or a CRO (corporate restructuring officer) hired by the company.

    http://www.lubbockonline.com/news/20180812/reagor-dykes-what-we-know-what-to-expect-and-impact-it-has

    • 0 avatar
      sgeffe

      And the former CFO of the group worked for FoMoCo Credit! Insider knowledge!

      “I couldn’t read the VINs you sent!”
      “Well then your darn phone’s probably busted, I tell ya! I’ve got all da cars right here! Two Milans, four Mountaineers, just like I told ya! Jeez!” ;-)

    • 0 avatar
      sgeffe

      Interesting read, and the scope of the thing is eye-opening! $41 million is a lot of Burnt Umber Fusions! (To keep with the metaphor of “Fargo” and one of the best selling cars of the day (the Olds Cutlass ANYTHING was still a license to print money, even in the mid-80s before the Taurus took the crown), that’s still a helluva lot of Burnt Umber F-150 XLT SuperCab 4x4s with the Light Group and Decor Group!)

      Wait, what color goes with that??!! I wanted to add the Ford “Tu-Tone” in there someplace!! Aw darn! Jeez!

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