LUBBOCK, Texas (KLBK) – Rick Dykes denied wrongdoing in a written court record filed Thursday in federal district court. Dykes is the co-founder of the Reagor Dykes Auto Group along with Bart Reagor.
Dykes accused his own former employee, Shane Smith, of wrongdoing in the court record his attorney filed.
On July 31, Ford Motor Credit Company accused Reagor Dykes (RD) of defaulting on roughly $40 million of debt. Ford later accused RD of fraud. The total debt was roughly $116 million.
One day later, a list of RD companies filed for bankruptcy. Both the federal court lawsuit and the bankruptcy case are still ongoing.
Dykes’ response to Ford’s lawsuit said Smith worked for Reagor Dykes for 11 years and handled all the financial reporting. Smith was the Chief Financial Officer until he was fired.
According to Dykes, things began to unravel when Ford found irregularities and did an emergency on-site review in July.
Dykes claimed in part, “Unbeknown to Mr. Dykes and Mr. Reagor, Ford Credit had decided to undertake the emergency review of financial records because of irregularities that Ford Credit had discovered in the financial information provided to Ford Credit by Mr. Smith.”
Dykes went on to accuse Smith of breaking the law.
A section of Dykes’ court filing said:
“At the same time as the Reagor-Dykes dealership chapter 11 cases were being commenced, Mr. Smith made a stunning disclosure. Mr. Smith admitted that he had provided false financial information regarding the Reagor-Dykes dealerships to Ford Credit and Messrs. Dykes and Reagor. Upon learning of Mr. Smith’s disclosure, Reagor-Dykes Auto Group terminated Mr. Smith’s employment and referred Mr. Smith’s disclosure to the local United States Attorney’s office, which has commenced an investigation.”
Smith has not been charged with a crime. The FBI has not confirmed or denied that there is an investigation regarding Smith or anyone else at Reagor Dykes.
A phone message was left for Smith on his cell phone on Wednesday. If Smith chooses to comment, an update will be provided.
UPDATE: Click Here to read the entire answer by Rick Dykes filed in federal district court.