Note: A blog and sent to emails list and posted online. FBI, FDIC, other cognizant authorities and media. Both FBI and FDIC reacted.

September 17, 2009

A reliable source provided information that $643 million of the, previously reported, unused loan commitments scheme First State Bank Altus was operating in December 2005 was divvied up in the following manner. Only $1 of each loan was ever advanced.

$14.5 million to Altus Venture Capital Fund III
$85 million to Altus Venture Capital Fund IV
$189 million to Altus Venture Capital Fund V
$218 million to OIVCC Series D (one of the Altus Ventures LLCs)
$136 million to Affinity Ventures which will be addressed in a follow up.

Oklahoma lawmakers insured the public could never learn the cost, who or how the venture Capital tax credits where being used. We did learn $189 million (AVCF V) was the fake loan used to inflate the $32 million invested in Quartz Mountain Aerospace to falsely claim $221 million was invested; and receive $66 million in tax credits, for 2005. Altus Ventures filed another $200 million false claim, based entirely on a fake loan (without investing any money) in 2006 and received another $60 million in tax credits.

These fake loans provided the so called borrowers with legitimate looking loan documents from a federally regulated bank. The tax commission then accepted these fake documents, wrapped in layers of red flags, at face value, without questioning.

In the case of Altus Ventures and QMA the story about using the $189 million loan was exposed and well covered in the media. Tony Mastin, the tax commission administrator, was interviewed about this very story. Not only did the tax commission not go back and examine the first claim it allowed Altus Venture to file the second $200 million claim, wrapped in even more red flags, again went unchallenged. The most obvious is the tax commission having a heads up. Another was the size of the claimed investments. We can see that there was far more than the $66 million in tax credit claims than state officials admitted in early 2006. Potentially as much as $193 million defrauded tax credits for 2005.

This story is far more than the $100s million in tax credit fraud. This story is about high level state officials, willing to abuse their positions of trust and authority, given to protect the public interest; to instead aid and protect fraud against the public.

The only comparable aspect is the pathetic indifferences exhibited by what few, if any, quasi honest state officials and lawmakers; and the general public who prefers to bury their heads in the sands of denial, rather than face reality and deal with the unpleasant.