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>REI New Markets Investment, Linkmark and Gladstone Capital

9/18/2008

REI New Markets Investment, in Durant, OK. REI is known for taking 45% Federal New Markets Tax Credit (NMTC), and using BIA Guaranty loans and U.S. Small Business Administration or U.S. Department of Agriculture loans.

REI claimed receiving $45.4 million investment from Purcell Outdoor Investment and investing $45.4 million in Lindmark Outdoor Advertising and took 30% of the claimed investment in state tax credits ($13.65 million)? Purcell Outdoor Investment and Lindmark Outdoor Advertising a billboard company were owned by the same party, Linkmark.

The only source of funding found was Gladstone Capital, in Virginia, (tax credit company) that loaned Linkmark $10 million.

17 months later Lindmark Outdoor Advertising filed bankruptcy, Gladstone Capital foreclosed on Lindmark Outdoor Advertising, leaving multiple reasons for the Oklahoma Tax Commission (OTC) clawback the $13.65 million tax credits as required by law. Instead OTC a Confidential Tax Letter declaring Lindmark's failure as a "Liquidity Event," a free pass to keep the tax credits.

Examining public records, news articles and Lindmark Outdoor Advertising's own website, reveals no significant new jobs were created. What was learned was Lindmark Outdoor Advertising went on a billboard shopping spree acquiring new billboard companies in AL, FL, MS and TX. Lindmark added 4 new companies, gaining 600 more billboards. The one OK company had 50 of the new billboards mostly built prior to 2007. (1) The companies outside OK had 550. Lindmark added 300 more new billboards through organic growth. It is reasonable to expect the new billboards were split proportionally. The Oklahoma program used to take the tax credits specifies the investments be spent creating jobs in Oklahoma, and not for new business acquisition.

(1) These investments are not allowed to be used to pay prior debt.

This same information reveals a $10 million loan coming from Gladstone Capital, in Virginia, as the only other source of funding.

Remember the 45% Federal New Markets Tax Credit (NMTC) if use would add another $20.5 million. $34.15 million tax credits plus the $10 million loan makes $44.15 million only $250K short of the claimed $45.4 million claimed to have been invested.

Just another way to launder criminal profits.

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