February 25, 2010

Déjà vu 2006, all over again. When tax credit fraud was first exposed in early 2006, state officials were quick to claim unidentified tax attorneys had discovered a loophole that made receiving $2 in tax credits for each $1 invested "not illegal". That was the lame justification for not investigating or taking any effort to recover ill-gotten public funds.

State officials are again, ignoring new evidence of the same tax credit fraud, officials' were allowed to cover-up, in 2006. This time we have the benefit of information that was not available in 2006. We now know what was occurring in 2006, was Altus Ventures using counterfeit loans and not a loophole, as state officials claimed, to inflated the amounts invested to receive $2 in tax credits for each $1 invested. We now know that lawmakers' 2006 claim, an amendment closed a loophole that would prevent further abuses, did no such thing, rather more than double amount fraud. The key language added in the amendment was language to prohibit clawback, recapture, or the state from recovering fraudulently obtain tax credits. 68 O.S. 2357.74B G

We now know the tax commission has been falsifying tax credit reports to hide the amount of tax credits taken through fraud. We now know state officials are again turning their backs on mounting evidence of failed business, no new jobs, and wide open fraud.

Now, the 2006 case state officials called a loophole has played out, resulting in the failure of every business involved, here is the complete story as it unfolded.

Time line.

A March 9, 2006, Associated Press article "Tax credits being abused, officials say" first exposed; Altus Ventures had received $66 million in tax credits for claiming, it had invested $221 million in Quartz Mountain Aerospace, in 2005. The actual investment was only $32 million. The remaining amount was a $189 million loan issued by First State Bank Altus. Paul Doughty was president of both the bank and Altus Ventures, which along with several other related LLCs were all owned by the Doughty family. It should have been more than obvious to any who weren't so superficial as to accept everything at face value - the loan amount was far too disproportionate to the size and purpose of QMA; the size of the bank; and not a bank quality loan. Less obvious, but important, the claimed use for the loan failed to meet tax credit eligibility requirements.

2006: Close of legislative session. State lawmakers, without debating, examining, or reading; acted to pass an amendment (SB 1577) they claimed closed the loophole. That amendment introduced in the Senate, was held up, until last day voting, by Kevin Calvey; Chairman of House Revenue and Taxation committee. AP reported Calvey entertained Doughty's input on creating language for the amendment; after several associated with Doughty's group donated $21,900 to Calvey's US Congressional campaign. Further research into Calvey's campaign funding also revealed hidden PAC money

Post 2006: Evidence surfaced revealing the amendment did nothing to stem tax credit fraud; but rather more than doubled.

2007: Altus Ventures group claimed to invest an additional $200 million (counterfeit loan) in QMA during 2006. Altus Ventures received another $60 million in tax credits, for a new total of $126 million, for the one $32 million investment.

Comment: Based on everything learned in more than three years, this claim has all the markings of payback for protecting this fraud scheme and cover-up. In particular, for insuring the 2006 amendment did nothing to damage the scheme, instead provided more fraud protection. That would be language inserted to prohibited the state from recovering tax credits taken in violation of the law.

2007, June 1: Shortly after filing the claim it had invested another $200 million the previous year, and having only recently reached 100 employees for a short period; QMA announced the first of its layoffs.

2008 July: QMA now financially desperate, stopped forwarding employee payroll deduction, to proper authorities; for unemployment insurance and employee paid health and dental insurance. The next month, August 2008, QMA was asking the City of Altus and Altus economic development group for loans to meet September payroll. Not long after QMA laid off employees and closed its doors forever. Information received from former employees verified QMA only received $32 million.

2008: Financial records found on Altus Ventures' computers revealed only $32 million had been invested in QMA. This same financial records included the evidence of a variety of financial wrongs involving Altus Ventures and First State Bank Altus, which posted on prowlingowl.com. Federal agencies including the FDIC and Federal Reserve System which quickly initiated and audit of First State Bank Altus and all non-banking subsidiaries, such as Altus Ventures.

January 2009: The cover-up. It was discovered when Openbooks first came online with tax credit information, 3 months late, two key fraudulent tax credit programs were missing and the other two under reported. Only reporting five percent of the actual amounts were reported. Officials would be notified multiple times, to no avail.

2009: March Oklahoma Tax Commission was notified of QMA's failure and evidence found in Altus Ventures financial records. At that time it was formally reported to OTC Altus Ventures and Scissortail had filed false tax credit claims.

2009, July 31: FDIC seizure of First State Bank Altus, uncovered the evidence the bank had issued $643 million in fake counterfeit loans to, $507 million to Altus Ventures in late 2005.

Throughout this entire process on numerous occasions all of these event and information uncovered was reported to all state officials, including lawmakers. Never a response, acknowledgement or any action.

A business claimed to have received $221 million, had failed in less than 3 years, averaging between 50 to 75 employees. That represents $3 to $4 million per employee. State officials, informed on multiple occasions, simply ignored. Allowing $66 million in public funds to go un-reclaimed. Considering all that has been learned, leaves no alternative, other than, for state officials to act, would mean them returning unearned gains.

See rest of story at http://prowlingowl.com To be removed from this mailing list send email to nite@prowlingowl.com