FDIC seizes First State Bank Altus, OK
July 31, 2009
Herring Bank, Amarillo, Texas, Assumes All of the Deposits
Financial problems brought on by a variety of schemes involving affiliate venture capital subsidiary LLC's setup and operated by the banks former president Paul Doughty. Doughty has a long history of allegations and a conviction of financial wrong doings, dating back to the October 1982 failure of the Oklahoma National Bank, located on South Harvey in Oklahoma City.
Doughty was named in the 18 alleged criminal wrongdoings at Oklahoma National Bank, where he was serving as executive vice president. Improper loans to Vulcan Oil and Gas, involving Doughty, were cited as the major cause of ONB's failure.
Doughty was also accused in a lawsuit brought against Vulcan Oil and Gas, and officers, including the Vulcan president Rod Fancher, by the Oklahoma State Securities Department and dozens of investors for allegedly violating securities laws. Doughty was accused of providing potential investors with false and misleading information on Vulcan's financial status. Doughty was accused of involvement in using funds from another company's bank account to issue cashier checks to a Vulcan official. A practice similar to what Doughty's group is accused in a Colorado land swindle.
A few years after the Vulcan/ONB schemes, Doughty and Fancher would be convicted by a jury for a scheme to defraud Sil-Flo. Doughty and Fancher bought Sil-Flo using a promissory note. Before the note was due the two men removed Sil-Flo's equipment and proprietary process, to another company they had setup. Then defaulted on the loan sticking the original Sil-Flo owner with nothing but a shell of the company he sold.
Then Altus Venture's one of the venture capital LLC's Doughty had setup, filed two false tax credits claims stating Altus Venture invested $221 million in Quartz Mountain Aerospace in 2005, and another $200 million in 2006. For these two false claims Altus Venture received $126 million in Oklahoma state income tax credits. Tax credits they sold for cash and pocketed the proceeds as unearned profits. Uncovered Altus Venture financial documents reveal Altus Venture invested less than $32 million total in QMA. Some in 2004 and the remainder in 2005, and not one dime in 2006.
At the same time Altus Venture's was operating the state tax credit fraud they were in Colorado pulling off another scam embezzling two private land owners out of more than $25 million.
It was the two Colorado victims that uncovered incriminating evidence from the computer being used by the Altus Venture group while they were working at the Colorado office. That evidence included among other information: Altus Venture's financial records revealing the Oklahoma tax credit fraud scam; showing Altus Venture had written checks and wired money owed the Colorado victims to a Mirror account setup at the First State Bank Altus without the knowledge and consent of the victims; had mortgaged the victims property (again without the victims' knowledge and consent) to obtain operating capital that Altus Venture was required to provide as part of the partnership agreement; show Altus Venture used friends in a scheme to tie up additional property with liens, and then used partnership funds to repay the friends the down payments and all out of pocket expenses; and numerous other acts to deprive the victims of money and property without the victims knowledge.
In spite of Paul Doughty's history of embezzlement and fraudulent schemes and within a few months of Doughty being exposed for filing the first false tax credit claim, stating Altus Venture had invested $221 million in QMA during 2005, the Oklahoma legislator allowed Doughty, a private citizen, to help write the language for the bill that was suppose to stop the very fraud Doughty had just committed.
With knowledge of Doughty's false claim; that Doughty had received $66 million in unearned tax credits; and Doughty's involvement in writing the bill: every state lawmaker voted to approve the bill without every reading let alone discussing.
At the end of the year, and without investing another dime, Altus Venture submitted its second false claim. This time stating it had invested another $200 million in QMA, during 2006 and received another $60 million in unearned tax credits. For the second time the Oklahoma Tax Commission with full knowledge of Altus Venture 2005 false claim, for which the tax commission had been interviewed and quoted as saying they would scrutinize the claims closer failed to catch this second false claim.