July 14, 2009

Researching a tip revealed Paul Doughty the recently removed president of First State Bank Altus and subject of numerous of lawsuits, audits and investigations, was at the center of the 1982 failure of the Oklahoma National Bank, in Oklahoma City. Eighteen instances of alleged criminal wrongdoing were lodged by the FDIC. Doughty's involvement in bad loans issued to Vulcan Oil & Gas, was central to the wrongdoings and failure. The Oklahoma Securities Commission had alleged violations of securities law by Vulcan and its principals, notably Rod Fancher, Vulcan's president. Numerous investor and Midway Pipe and Supply filed suits against ONB and Vulcan accusing Doughty of involvement and helping Vulcan scam Midway.

A few years later Doughty and Fancher would combine their schemes of greed, in a case unrelated to ONB and Vulcan that would result in a jury convicting both for the Sil-Flo fraud.

There is more to this story we will address later, including how could Doughty and Fancher hide the bad loans from bank executives? The bank was enduring difficult times by losing two of the three bank principals during the short time since Doughty's arrival in 1979. First Marvin Pigg died of a short illness. Then Vernon Ayres, the chairman and president, died in what was described as a drowning accident while on a fishing trip in an out of the way part of Alaska. Rescuers never found Ayres body. Then we have the Oklahoma Securities Commission reaching a questionable settlement with the principals of Vulcan Oil & Gas. The settlement was the principals of Vulcan would consent to a permanent injunction against future violations of state securities laws. I suppose that is something like the kids game of making the Vulcanites cross their hearts and promise to never scam again?

Now to the main point. This is the same Paul Doughty whose company Altus Venture received $66 million in tax credits by simply filing a claim stating Altus Venture had invested $221 million in Quartz Mountain Aerospace (formerly Luscombe) in 2005. We have obtained copies of Altus Venture's financial records that reveal less than $28 million was invested in 2005. Note: the entire $66 million in tax credits was taken and sold for cash during 2005.

In March 2006 the media revealed the Altus Venture scam. Yet state officials quickly came to the rescue of Altus Venture claiming that some "unidentified tax attorneys" had found a loophole that made it "not illegal" for Altus Venture to file false claims and receive $66 million in unearned tax credits. Although state officials found excuses for not acting to investigate or recover the money, they put on the show of denouncing the act as greedy and promised to fix the loophole.

There was a problem for Doughty in that any effort to prevent further fraud would prevent Doughty from fulfilling his promise to investors to pay $2 in profit for each $1 invested. Doughty needed to return $64 million for the $32 million invested. Buyers would only pay one-half the face value for tax credits. Some money was invested in late 2004. Doughty wanted another $30 million in cash, and had already set the wheels in motion to get another $60 million in tax credits. Regardless of the fact tax credits were only allowed for money invested the year the tax credits were taken, Altus Venture still claimed investing another $200 million in 2006 when not one dime was invested. With all the publicity about the now well know false claim Altus Venture

Doughty was allowed to act as an advisor on the bill to protect his scheme? Doughty also added a new twist - that said in the event someone is later found guilty of violating the law to obtain tax credits, the state cannot recover the stolen tax credits. That fits in very nicely with another part of the law that states the maximum punishment for that same conviction is to lose the right to participate in the program.

Sure enough Altus Venture filed that second false claim and received another $60 million in tax credits. Why not? If caught they would get to keep the money and receive no punishment. Now Altus Venture had taken a total of $126 million and would skim $26 million in fees and commissions

Here is the real secret. There never was a loophole. That was always a ruse for an excuse. Officials needed something to blame. The scheme was always and still is a simple matter of key people inside the Oklahoma Tax Commission willing to accept false claims and tuck those away insuring no one else will ever see those.

How can someone with a history of failed banks and business; allegations, lawsuits, convictions for financial wrongdoings freely roam the state selling tax credits received by filing false claims. Be exposed for their fraud then walk right in and help right a law to ensure the scheme is protected. Then in spite of all that file a second false claim and state officials totally disregard.

Uncovered OTC documents and Altus Venture financial records have been reported to and made available to every state official and lawmaker. Yet not one has shown any interest in acting to investigate, stop the fraud or recover stolen money. Yet all are quick to defend the crime and protect the criminals.

Here is my explanation. Those state officials are the investors receiving the 200% profits. The whole investment and profit thing is a ruse. Nothing more than a charade to give the appearance of an investment. It is simple a game to obtain tax credits which are sold and the money pocketed. Actually the fact some pick a business to use as a prop the game always destroys the business.

This is a game to skim off future tax revenue and hand that to state officials. Oklahoma law allows state officials to be involved and profit from public funds.

By setting up the program to operate automatically, and off the books, leaving no paper trail. Then only a small cadre, likely only one person, in the tax commission is allowed to access to the claims; no one will ever learn what the program is costing; who is involved; or what the money is used for.

The program is set-up perfectly for state officials and lawmakers who have no money to invest. The tax credits are automatic and valid the day the fund manager claims the money was invested. The fund manager can arrange buyers, then deliver the tax credits and have cash in hand to pay "a so called investor's" investment and hand over the profit all before the investment has access to spend the investment.

This is one slick deal and has been working for some 5 years now. More than enough has been taken to pay every state official holding an elected or appointed office during this period several $100,000 each. With some receiving more than a million.

In the meantime schools are suffering, teachers and state employees have been denied raises, roads and bridges are missing needed repairs, and the list goes on endless.