Possible money laundering by over 100 LLC's used to divert potentially up to $470 million for personal gain for 2007 alone?
August 27, 2008
Previously unobtainable information listing LLC identities has been posted on prowlingowl.com. This list identifies LLC's involved in what could amount to as much as $236 to $472 million in 2007 tax credits using a loophole riddled tax credit incentive program that allows some to automatically take $2 in tax credits for every $1 they claim to be invested.
These documents were presented as copies of Oklahoma Tax Commission records which include approximately 70 investing entities that invested $236 million in 16 venture capital companies. These companies in turn invested in 36 target Companies, taking what could be as much as $470 million in tax credits. Only the investment value and not the tax credits are shown on the documents.
A close examination of records reveals both identity and amount similarities between several investing and receiving entities. These similarities raise several questions in addition to the first question regarding "$2 for $1 abuse"?
For example, is the tax credit program simply being used for money laundering (i.e. passing money through solely for the purpose of capturing tax credits)? In the process, have these LLC's doubled or tripled the original amount they passed through? It should be remembered tax credits can then be sold, reaping huge unearned windfall profits. In such instances the public received nothing in return yet is left with the burden of $100's million in lost tax revenue. This money will never appear on the state budget or be accounted for on state financial records. Several factors support this scenario. These factors include, but are not limited to the following:
Lawmakers left the program void of accountability and oversight, pre-authorizing certain entities to automatically take unlimited tax credits.
Those using the program are free to violate the law to take $100's million knowing that the law specifically prohibits the state from recapturing its losses. And, what is the worst possible penalty? Nothing more than, any convicted of wrong doing will no longer be allowed to participate in this program.
All paper trails are hidden behind multiple levels of LLC's. This allows public officials to benefit as hidden investors without the public ever learning of their involvement.
Further details and explanations can be found at http://prowlingowl.com/Taxfraud/LoopholeUsers.cfm