Internal OTC emails reveals OTC issues hidden refund checks for tax credits!
March 15, 2010
Invest $25,000, receive $50,000 in tax credits. Send the tax credits to OTC, and receive a $50,000 refund check. No one will know, and OTC loses their records.
More than 600 internal Oklahoma Tax Commission tax credit emails, have been obtained and are currently under review. This is the first of several that will reveal a very clear picture of what has been occurring with tax credits. Feel free to contact me for this information.
OTC has been, unlawfully, issuing gross production tax credit refund checks, for SBV and RSBV tax credits.
SBV and RSBV tax credits, constitute approximately $250 million, of the more than $600 million* in CFIA tax credits. The other 60% were SBC and RSBC tax credits. SB is Small Business. R is Rural; C is Capital and V venture. There is no benefit for the state or the venture receiving the investment to have a C and V. No financial or logical reason. The V's, SBV and RSBV, are the tax credits prowlingowl.com has been reporting OTC fails to include in all reports, include Openbooks. Feel free to contact me to learn how to detect the missing information.
By law and expressed in an OTC email to one held to different standards. It is a use'm only to offset taxes owed or lose'm deal.
"the credit is not a fully refundable credit. The statutes specifically provide that if the tax credit exceeds the amount of taxes due, the amount of the claim not used may be carried forward to a future taxable year."
The event that had a large negative impact on this year's tax revenue shortfalls.
A unspecified event (likely candidate below) occurring shortly before, the earliest email available, December 2008, resulted in OTC undertaking a major effort to issue tax refund checks for, SBV and RSBV, tax credits going back several years. The bulk went back to and included 2006, when tax credit abuses tripled. As you will see less than one year later it was learned OTC had no records to document tax credits earned. Leaving the question begging; how did OTC, verify the tax refund credits? In the beginning auditors showed concern over documentation, but continued, claims were paid, with numerous issues to be resolved. It is not clear how or if that was resolved.
Because OTC had no appropriated funds to issue refund checks, it had to rely on skimming off incoming tax revenue to cover tax refunds checks. It would take OTC well past the April 15, 2009, tax filing deadline, into June, to issue all the refund checks. One law firm was complaining early, OTC had missed scheduled payments. OTC found itself in the positon of explaining; not enough revenue to cover everything.
Note: Of particular interest were two groupings, one in oil and one in gas, both sharing the same general time frame, late 2007 and early 2008. While other periods, going back to 2000, would have random amounts, ranging from as little as $4.20 and occasional up to $5,000, $10K, and rarely one even larger. These two groupings suddenly elevated to bottom at the top of the others and ranged more than 20 times the amounts of other periods, and were concentrated in a much tighter band. A statistical freak, in cases such as random royalty owners all having independent tax planning needs; then such extremes; yet, not one small fry.
Missing tax credit records? Did records ever exist? Suddenly lost? Or, two sets of books?
October 15, 2009, Representative Mike Reynolds', request for information on venture capital tax credit programs, the first and only state official to have been found to request tax credit information, of any sort, exposed OTC was missing tax credit records.
Something strangely odd considering HB 2010 was enacted in 2000 requiring the Oklahoma Tax Commission to file annual reports with the Governor, Speaker of the House of Representatives and the President Pro Tempore of the Senate. How did OTC get by not reporting the last 8 years?
That begs the questions: OTC had just paid out a huge chunk of fraud, and 4 months early were still completing audits, on conditionally issued tax refunds. Did OTC have reports and documents for audits then, then suddenly disappear?
There is one obvious issue. OTC could not afford public disclosure of the Altus Ventures claims, based on counterfeit loans.
Because of these missing records, OTC had to resort to sending letters to CAPCOs, those receiving tax credits for investment claims. 14 letters were sent and 12 replied. Paul Doughty closed his Altus Venture's office, and fled to Colorado Springs. Doughty has more than enough fraudulent problems facing him, to go creating more false documents. There would be no more Altus Ventures documents. That is why our state lawmakers allow secrecy.
Finally, an honest public employee at the tax commission.
One auditor, smart enough to recognize something wasn't right and brave enough to go on record and report to those in higher authority, stated:
"The responses we received are very diverse in the amount of detail and/or support provided so it is difficult to evaluate whether the expenditure requirements have been met. That being said, it is clear that some of the expenditures do not qualify and some of the investments should not qualify for the applicable credit"
No information was found to reveal what followed.
It would be a grave injustice if the one conscientious public servant, brave enough to abide by their oath, and report wrong, fell victim to the fact they were not aware the central figure responsible for the fraud lay waiting up the ladder of authority.
Using GP tax refunds to disguise funneling public funds to the unidentified tax credit recipients, offers several advantages for fraud.
OTC provides no details on gross production taxes. GP tax refund checks go to royalty owners, many out of state and even out of country. OTC relies on names and addresses of royalty owners provided by the oil company; and relies on the CAPCOs operating tax credit fraud schemes to send tax credit forms to supposed investors.
Many of these tax refunds could easily be sent to blind addresses, all owned by the same person or persons. Oklahoma officials have set this program up to where they claim it is not illegal for them to receive tax credits. Now we know receive tax refund checks. Their only worry was how to prevent the public from learning. This looks like a sure winner!
That is, unless someone with the authority to gain access to the return checks, and trace the check path back up the money trail. Unlikely, Oklahoma officials!
In summary, there is no way for anyone to know, who is getting how much in tax credits; who is getting how much in gross production tax refund checks. We also learned OTC was keeping no tax credit records. There is no way for anyone to learn how much in tax revenue was lost to these programs.
No records, no accountability, no money trail and all wrapped in secrecy. Business investments failing before the ink dries. Do you get it now? It is the secrecy, stupid!!
Note: Additional evidence for the above will be provided. OTC emails are in a mixed up form and will be provide on-line as time permits. In the meantime any interested let me know.
Likely cause of rush to issue refund checks: November 8, 2008, Quartz Mountain Aerospace, going down and exposing Altus Venture's, false claims it had invested $221 million in QMA. A claim documented with counterfeit loans, that allowed Altus Ventures $127 million in fraudulent tax credits. We don't have the RSBC/ RSBV breakdown for 2005, but it was 34% RSBC, 66% RSBV for 2006. That should come as no surprise since Altus Venture didn't invest one penny of the 2006 claim. Note: it is unclear if the $600 million total above includes the 2005 tax credits. Chaparral Energy bought $30 million in tax credits by investing $15 million in two Capco funds, Altus Venture ($10 million), and ($5 million) in I suspect Affinity Ventures. Less than $3 million had been used, until this time, when Chaparral remaining more than $26 million would be used during this short time period.
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