State officials provide cover while those behind Altus bank failure flee! 1 of 2
August 7, 2009
Part 1. Challenging the State Banking Departments explanation of what occurred.
Two key people, Paul Doughty and Don Anderson, behind the Altus bank failure have fled the area while state officials are covering Doughty's involvement in scams and frauds starting with another bank failure in 1982. In between state officials turned their backs while these two where defrauding the state of $126 million in tax credits and misusing the bank to scam Colorado property owners out of $25 million.
Part 2 will address a Doughty and partners rap sheet going back nearly 30 years to a previous bank failure and securities laws violation, and in between.
While state officials were providing cover Doughty and Anderson were making a reverse Oklahoma land run, which they were now experienced after a 2007 middle of the night flee out of Colorado, after being informed the scheme they were operating there would be audited. More on this below.
An Oklahoman stenographer masquerading as a journalist recently reported the cover story behind the bank failure according to Mick Thompson Chairman of the Board and Commissioner of the Oklahoma State Banking Department. We want to thank Thompson for taking the time to teach us all something he apparently felt we never knew, i.e., bad loans can cause a bank to fail. Imagine that? Thompson also introduced the public to the banking world insider term "Texas ratio," which we have been hearing, since before the first of 127 banks started failing a year ago. Apparently Thompson felt that it would serve the public better for him to simple impress us with this mystical term that gives us comfort and assurance that everything was under control.
Then Thompson went on to inform us the "First State Bank of Altus was atypical. It did make speculative deals, loaning millions to Quartz Mountain Aerospace and an out-of-state real estate development that each went belly-up."
Have Thompson and the stenographer been on a trip to Mars? Maybe the stenographer was, but have to opt for another angle for Thompson. Thompson knew saying what some already knew would be an admission of failure on his part and the fact he was covering up for wrong.
The Altus Gang includes the leader Paul Doughty, who was also president of the failed First State Bank Altus, Don Anderson, and other employees; QMA and some 15 or more "slight of hand" LLCs, most notably Altus Venture (more aptly nicknamed Altus Vultures), Oklahoma Industrial Venture Capital Company and Oasis Development.
Thompson's use of the term speculative loans was a gross misrepresentation. So gross it can only mislead. These were loans the gang members made to themselves and some friends for the purpose of executing scams. The Altus Gang was working both ends. One member of the gang, usually Paul Doughty would give a loan to another member, usually Don Anderson. Or, in the case of QMA Doughty would issue loans to QMA where Doughty through his Altus Gang held controlling interest in QMA.
Altus Venture had separate accounts where money amounting to more than $400 million during one period was flowing in and out, to and from unknown sources. This is something that has the stench of money laundering and an effort is being made to ascertain if this the case? Here is a small bank with approximately $100 million in assets and managing a $32 million investment. Yet this little bank is churning $100 million through hidden accounts. At times holding over $400 million? I would like to hear some share and reason for an activity of that nature involving that much money that would be legitimate?
One possible scenario was this money was spread around several banks, etc. and generating bank statements. Doughty used those statements for the money in these hidden accounts to as documentation to use as back up for the two false claims they invested $221 million and $200 million in QMA, during 2005 and 2006, respectively. When in fact the Altus Gang only invested $32 million. The gang charged a significant part of that money back in management fees. QMA failure was brought on by the Altus Gang misusing QMA as a vehicle to get $126 million in tax credits, which they sold for fifty-cents on the dollar. Plus blood sucking QMA through unjust fund management fees.
The "out-of-state real estate development" was the scam the Altus Gang was operating to gain control of 4,000-acre s of prime resort area property around Steamboat Springs. The gang approached the two owners of the property with a partnership proposal where the property owners would kick in property and the Altus Gang would obtain funding for infrastructure build out and operating capital. To be clear that is way up there in the millions. Secondly, the Altus Gang argued they had the staff and that as part of a federally regulated bank they were the most qualified to handle the finances. That partnership went into affect over 3 years ago and the Altus Gang has yet to show the two Colorado partners one financial record.
Instead of raising its share of the funds the Altus Gang would use the property contributed to the partnership by the other partners as collateral for loans. All this without the knowledge of the other land owner partners. One Gang member, typically Doughty would issue the loan as an "on demand loan" while the other partner, typically Anderson, would sign for the loan mortgaging the property of the unwitting land owners.
Another scheme was the Altus Gang talked many of their friends into to serving as straw buyers for some of the Colorado property. The straw buyers would make a 10% down payment. The Altus Gang would use the bank to issue an 80% loan on the property and arrange for another 10% second mortgage through one of the gang's Slight of Hand LLCs. The 10% down payment would go to the partnership to create the paper trail. Then the Altus Gang would issue a kickback check (out of the partnership account) to repay the straw buyers their down payment. This was another way for the bank to get liens on property so the Altus Gang controlling the finances would not make payments on the loans. These kickbacks further deplete the funds, preventing meeting payments, and ultimately foreclosing on the property.
The Altus Gang would pay themselves and some crony consultant's huge bonuses. The gang also wrote checks to the two land owner partners. Rather than giving the partners their checks, Doughty and Anderson had setup accounts at First State Bank Altus using the names of the partners' businesses' in Colorado. They would then deposit the checks made out to the partners in the FSB Altus accounts. Wire transfers were used for the same thing, adding to a very long list of crimes.
The Altus Gang would use the above and various other means to deplete the partnership funds failing to meet loan payments, with the goal of the Altus Gang foreclosing on the on-demand-loans through either Altus Venture or FSB Altus.
That scheme came unraveled when the Colorado victims growing suspicious of the Altus Gangs failure to show the books, called for an outside audit. The Altus Gang, in a virtual middle of the night escape, packed up and left Colorado. They would later resigned from the safety of Altus.
The Altus Gang, in the haste to escape only erased the files on the sever they had been using to keep financial records. With time to think on the return trip the Altus Gang realized the files could be recovered. The locks had yet to be changed on the office, and a member of the Altus Gang sent an employee back to the office late to retrieve the server. By chance one of the Colorado victims was returning to the office for some reason and caught the Altus Gang employee loading the server in their car. The Colorado victims were able to retrieve highly incriminating evidence and information showing where to find other evidence. All of this evidence can be found on prowlingowl.com
Upon leaving Colorado the Altus Gang tried to make its move to start foreclosing on the properties. The attorneys for the Colorado advised to file for bankruptcy to freeze any action until the mess could be sorted out.
That is the real story that had been made available to Thompson and others at the state banking dept. on what is believed to be numerous occasions. Yet there is no sign Thompson took any steps protect against Doughty and Anderson skipping out and taking or hiding the money.
Part 2 will present an even more compelling case against state officials for gross negligence, deliberate ignorance and knowingly allowing a man with a long history of financial wrongs to head a bank and participating in writing Oklahoma law.