‘Vista Bank aided and abetted’ RDAG CFO’s fraudulence

Vista Bank CEO had luxury vehicle ‘side deal’ with RDAG LUBBOCK, Texas (KCBD) – court papers filed Wednesday by the court appointed Special Counsel to Debtors describe a ‘side deal’ between RDAG CFO Shane Smith and Vista Bank CEO John https://paydayloanoffice.com Steinmetz that supplied Steinmetz with steeply discounted leases for luxury cars. While this ended […]

Vista Bank CEO had luxury vehicle ‘side deal’ with RDAG

LUBBOCK, Texas (KCBD) – court papers filed Wednesday by the court appointed Special Counsel to Debtors describe a ‘side deal’ between RDAG CFO Shane Smith and Vista Bank CEO John https://paydayloanoffice.com Steinmetz that supplied Steinmetz with steeply discounted leases for luxury cars. While this ended up being taking place, court papers state Vista Bank ended up being alert to RDAG check-kiting schemes.

“The two worked together, each taking advantage of the other’s misconduct, ” in line with the papers filed by Andrew Seger, the court appointed unique council. “Vista Bank President, John D. Steinmetz, personally enriched himself through kick-backs (by means of approximately $150,000 in subsidized luxury automobile leases for their individual usage, funded by Debtors), while on top of that he and Vista Bank at large benefited through the huge bank costs it accumulated in addition to prestige of getting a ‘top shelf’ customer while pursuing a strategy that is growth-at-any-cost. These advantages to Vista Bank as well as its owners and executives proved consideration that is ample simply allowing CFO Smith’s proceeded fraudulence. ”

“Vista knew the type therefore the level of Shane’s schemes that are fraudulent. Not even close to stopping them, they took active measures to greatly help Smith carry away their schemes, ” according to your documents.

Listed below are excerpts through the court papers released today:

  • Dealerships deposited an astounding and amount that is inexplicable of into three Vista checking reports. This amount is approximately 5.8 times larger than the three dealerships gross sales for 2016 and 5.6 times larger than the gross sales for 2017 by comparison with past annual gross sales.
  • Vista Bank had advanced level familiarity with whenever Ford engine Credit Company audits had been planning to happen. In line with the disparity of reported sales and EFT that is actual to FMCC, Vista additionally totally possible knew that Smith had been regularly causing automobiles become out of stock of trust. Vista and Toby Cecil knowingly assisted Shane Smith together with economic witchery by assisting him conjure the monies required to repay FMCC that the dealerships did have and through adept utilized of both the check clearing procedure and also the evidently limitless revolving personal credit line that Vista called a need deposit account.
  • Aggregate measurements of deposits had been considerably bigger than Vista Bank it self.
  • Inspite of the build up the reports were habitually overdrawn.
  • The overdrafts had been effortlessly short-term loans paid back with intercompany transfers. Every single day, Lmitsu, RDT and RDAC will make big intercompany deposits to endeavor to cure these overdrafts in order that a offered account would complete the time by having a good stability.
  • . Smith commented to Cecil which he had “lots of dishes rotating. ” Cecil reacted to Smith’s email by noting: “I don’t discover how they are kept by you the plates all rotating: )” (Note: Toby Cecil could be the Vista Bank Lubbock marketplace President.
  • Vista Bank’s computer system told Vista exactly exactly just what Shane Smith ended up being doing.
  • Shane Smith told Vista Bank Officers exactly what he had been doing.
  • Cecil and Luman will have tellers waiting after hours for a dealership worker to reach with large intercompany checks become deposited. Cecil and Luman would instruct the tellers the way in which to apply the credits that are memo-posted to which reports. To the conclusion regarding the scheme here would multiple vast amounts deposited via belated cabinet memo post as well as on regular or even daily foundation.
  • . Account balances seem to other people as bigger than they really had been.
  • #Respectthehustle: Steinmetz Seeks Help of Investment Bankers To Simply Help Dealerships Plug The Hole. As ended up being their training, on or around might 7, 2018, Shane Smith sent a business that is quarterly for the very first quarter of 2018 to all the for the Debtor dealerships’ bankers including John Steinmetz and Toby Cecil. Nonetheless, and notwithstanding these apparent signs of impending doom that is financial Steinmetz reacted to Smith’s upgrade via e-mail dated might 8, 2018 and also as follows: “Incredible!! Congrats towards the Greatest car Group on the planet. #respectthehustle” It goes without stating that Steinmetz was truly “respecting the hustle” as he received a number of luxury vehicle leases that have been greatly subsidized by Smith through direct money re re payments through the dealerships.

The document defines how, “Steinmetz, for himself along with his family members, surely could rent the next cars for only 36 % associated with the quantity he had been otherwise obligated to cover: (i) 2015 Cadillac Escalade; (ii) 2015 Chevrolet Tahoe LTZ; (iii) 2016 BMW 750i Xdrive; (iv) 2016 Infinity XQ80, and; (v) a 2016 Toyota Land Cruiser. For the reason that respect, and from December 15, 2014, through the filing for the bankruptcy petition, the Debtors made some $146,410.02 in direct rent payments to a renting company and also for the advantage of John Steinmetz and against a obligation of $228,150. ”

The vehicles increased in quality, the court documents state over the years. “In the months which preceded the bankruptcy, Smith and Steinmetz had been in active talks regarding getting an Aston Martin (of James Bond popularity) for Mr. Steinmetz’s utilize. The with this transaction, but presumably it could have already been under comparable terms once the five other automobile leases. ”

The papers note a few instances by which brand new leases were finalized at or about the exact same time that big unsecured records had been authorized by the bank.

“In particular it ought to be noted that Steinmetz obtained additional leases over summer time of 2017. The timing of this 2017 leases had been particularly suspect, while they happened close to enough time that Debtors Reagor Dykes Imports, L.P. (“Lmitsu”), Reagor Dykes Plainview, LP (“RDT”) and Reagor Dykes Auto business, LP (“RDAC”) received a $3 million buck unsecured loan from Vista Bank and also at an occasion that its checking records were frequently overdrawn by thousands and thousands of bucks. Suffice it to state, the Leases when it comes to 2016 BMW 750i Xdrive and 2016 Toyota Land Cruiser were performed just one thirty days prior to the $3 million buck loan that is unsecured authorized. The Infinity QX80 ended up being leased by Steinmetz 30 days following the $3 million buck loan that is unsecured authorized. ”

One element of the papers filed today states, “The increase of Vista Bank President, John D. Steinmetz, from their days as a junior banker with Plains Capital Bank, to Lubbock County Republican Party seat, then as President of Vista Bank and ultimately to successive appointments as an associate associated with the Board of Regents regarding the Texas Tech University System happens to be well chronicled. For a guy forty-one years that is a significant application. Indeed it is fairly an application for somebody of every age. As had been the actual situation with Shane Smith, at first glance, Steinmetz bares all of the trappings of an US success story– because of the shiny luxury automobile. But like Shane Smith, all wasn’t since it appeared to be. ”

Court papers additionally describe several years of e-mails between RDAG CFO Shane Smith and bank officers regarding overdrafts and unconventional hours kept making sure that after-hours bank deposits might be created by RDAG suggesting a causal relationship between the favors done for Steinmetz and also the bank’s habitual tolerance of RDAG overdrafts.

“And this will be precisely why the transactions between Smith and Steinmetz are incredibly important- they offer a lens by which view Vista’s conduct that is subsequent. And Vista’s conduct, whenever seen from a target viewpoint, just cannot be explained except because of the summary it was a participant in Smith’s schemes.

The plaintiffs and cross claimants seek to disallow the entirety of Vista Bank’s liens, claims and results in of action when you look at the bankruptcy instance.