Fraudocalypse - one case reveals all. Fraudulent claims, official involvement, lying, false reports, concealment, cover up, failure to recover stolen public funds.
Déjà vu 2006, all over again. When tax credit fraud was first exposed in early 2006, state officials were quick to claim unidentified tax attorneys had discovered a loophole that made receiving $2 in tax credits for each $1 invested "not illegal". That was the lame justification for not investigating or making any effort to recover ill-gotten public funds.
State officials are again, ignoring new evidence of the same tax credit fraud, officials' were allowed to cover up, in 2006. This time we have the benefit of information that was not available in 2006. We now know what was occurring in 2006. Altus Ventures was using counterfeit loans, and not a loophole, as state officials claimed, to inflated the amounts invested to receive $2 in tax credits for each $1 invested. We now know that lawmakers' 2006 claim, an amendment closed a loophole that would prevent further abuses, did no such thing, rather more than double the amount of fraud. The key language added in the amendment was language to prohibit clawback, recapture, or the state from recovering fraudulently obtain tax credits. 68 O.S. 2357.74B G
We now know the tax commission has been falsifying tax credit reports to hide the amount of tax credits taken through fraud. We now know state officials are again turning their backs on mounting evidence of failed business, no new jobs, and wide open fraud.
Now, the 2006 case state officials called a loophole has played out, resulting in the failure of every claimed investment involved, yet all those who received 200% profit, are allowed to keep that unearned public money. Here is the complete story as it unfolded.
A March 9, 2006, Associated Press article "Tax credits being abused, officials say" first exposed; Altus Ventures had filed a claim and received $66 million in tax credits for claiming, it was investing $221 million in Quartz Mountain Aerospace, in 2006. The actual investment was only $32 million. The remaining amount was supposedly an $189 million loan issued by First State Bank Altus. Paul Doughty was president of both the bank and Altus Ventures, which along with several other related LLCs were all owned by the Doughty family. It should have been more than obvious to any who weren't so superficial as to accept everything at face value - the loan amount was far too disproportionate to the size and purpose of QMA; and the size of the bank. Less obvious, but officials' responsibility to have known, the loan was not a bank quality loan; and the claimed use for the loan failed to meet tax credit eligibility requirements.
Documents later uncovered revealed the $221 million investment came in two claims. $200 million investment by Altus Venture and $21 million investment from Affinity Ventures. Altus Venture and Affinity Ventures are funds managed by the same people.
2006: Close of legislative session. State lawmakers, without debating, examining, or reading; acted to pass an amendment (SB 1577) they claimed closed the loophole. That amendment introduced in the Senate, was held up, until last day voting, by Kevin Calvey; Chairman of House Revenue and Taxation committee. AP reported Calvey entertained Doughty's input on creating language for the amendment; after several associated with Doughty's group donated $21,900 to Calvey's US Congressional campaign. Further research into Calvey's campaign funding also revealed hidden PAC money
Post 2006: Evidence surfaced revealing the amendment did nothing to stem tax credit fraud; but rather, more than doubled.
Comment: Based on everything learned in more than three years, this claim has all the markings of payback for protecting this fraud scheme and cover up. In particular, for insuring the 2006 amendment did nothing to damage the scheme, instead provided more fraud protection. That would be language inserted to prohibited the state from recovering tax credits taken in violation of the law.
2008 July: QMA now financially desperate, stopped forwarding employee payroll deduction, to proper authorities; for unemployment insurance and employee paid health and dental insurance. The next month, August 2008, QMA was asking the City of Altus and Altus economic development group for loans to meet September payroll. Not long afterwards QMA laid off employees and closed its doors forever. Information received from former employees verified QMA only received $32 million.
2008: Financial records found on Altus Ventures' computers revealed only $32 million had been invested in QMA. These same financial records included the evidence of a variety of financial wrongs involving Altus Ventures and First State Bank Altus. Shortly after this information was posted on prowlingowl.com, and federal agencies notified; the FDIC and Federal Reserve System which quickly initiated an audit of First State Bank Altus and all non-banking subsidiaries, such as Altus Ventures.
January 2009: The cover up. It was discovered when Open Books first came online with tax credit information, 3 months late, two key fraudulent tax credit programs were missing and the other two under reported. Only reporting five percent of the actual amounts. Officials would be notified multiple times, to no avail.
2009: March Oklahoma Tax Commission was notified of QMA's failure; that former employees confirmed and evidence found in Altus Ventures financial records verifited, only $32 million of the claimed $221 million was ever invested. At that time it was formally reported to OTC, that both Altus Ventures and Scissortail had filed false tax credit claims, and reason why.
2009, July 31: FDIC seizure of First State Bank Altus, uncovered the evidence the bank had issued $643 million in fake counterfeit loans, with $507 million to Altus Ventures in late 2005.
Throughout this entire process on numerous occasions all of these events and information uncovered was reported to all state officials, including lawmakers. Never a response, acknowledgement or any action.
In summary: A business claimed to have received $221 million, had failed in less than 2 years, averaging between 50 to 75 employees. That represents $3 to $4 million per employee. State officials, informed on multiple occasions, simply ignored. Allowing $66 million in public funds to go un-reclaimed.