Like the 1,000s of other pages of evidence uncovered and descriptions of crimes on this site, this web page is only one part of a massive multi-state entanglement of government corruption and cover-up. See size

Uncovering tax credits missing from Openbooks and used to pay illegal tax refunds!

Updated 2019. We now have the names

The following represents basically one element of cover-up/false reporting.

$220 million in hidden tax refunds for 59 of more than 112 counterfeit tax credit users and OTC management. More

March 23, 2010


This is the second in a three part series. The first part revealed documented evidence showing how bank fraud was used to commit tax credit fraud. Here we will show how embezzled funds were funneled out without passing through the state's financial system, and leaving the traditional paper trail, we have relied on for so long. Now we have the evidence to show how that system was beaten, and the public victimized. The third part in the series, will use an actual tax credit claim, to show the non traditional paper trail, mapping out the entire trail of fraud.

There are several ways for those benefiting from the fraud to receive their share of unearned profits. The most obvious is for those subject to Oklahoma state income taxes, and owe enough taxes to use tax credits to avoid paying. Those that do not owe enough taxes, can sell their tax credits to others at a discount.

Why sell at a discount when there is another way that requires no discount, and offers more identity protection? It is this avenue we will show here. Or, is this collecting twice? The amounts involved make a strong case, for doubling up on fraud, or more investment claims, going unreported?

Note: There have been changes, including, additional reporting requirements added by law since this tax credit program was originally created, in the 1990's. Most notably OpenBooks. These reporting requirements trapped the Oklahoma Tax Commission into either: exposing the fraud or resorting to false reporting. OTC chose the path of false reporting, without any concerns, because none bothered to do a simple check of the information reported. Had any made a small effort tto compare reports, they would have noticed OTC had failed to report the proper information and only reported $90 million of the $370 million in 2007 tax credits. 2007 was the first year OTC was required to report tax credit information. Even after reported the wrongs in reporting, not one state officials, showed enough concern to check. Or, didn't want to know?

Here we will show, as we did with bank fraud, how easy it is to find the false reporting. In process you will see the totally missing information, is the tax credits exchanged for gross production tax refunds. This blows a huge hole in the plausible deniability cover. Far too coincidental to have occurred by chance. Then factor in why would these be the same tax credits state officials would risk committing the crime of false reporting? Plausible deniability, never had a basis. This remove any doubts.

Which tax credits are involved?

The subject tax credit fraud involves the four tax credits provided by the "Capital Formation Incentive Act," that offers tax credit incentives for those willing to invest in certain high risk ventures. The fraud works by ignoring the risk and faking the investment. Thus allowing the so called investors to walk away with unearned tax credits.

There are two classes: Small Business (non-rural) offering 20% of the amount invested that qualifies for tax credits; and Rural Small Business (rural) offering 30%.

Then two sub-classes: 1. C or Capital; 2. V or Venture. There are no beneficial or meaningful differences between the two classes. Yet that confuses and makes hiding easy. C or Capital will often be associated with "pass-through entity."

V or Venture will often be associated with "in-conjunction" or "invest directly."

We are going to show; the V or Venture sub-class of tax credits are; 1. those hidden and not reported; and 2. always and only exchanged for tax refunds. A small percentage of "Capital" subclass tax credits are exhanged for tax refunds.

The venture sub-classes are not reported on any public available reports. The Capco report which should be available by requesting, and OTC so chooses (proof is available OTC only provides at its discretion), to provide, contains a column labeled invested "in-conjunction." In some cases "in-conjunction" column contains a dollar amount, twice that, shown under the properly labeled, SBC or RSBC, columns. The "in-conjunction" listing is not broken out and identified by investor as required and done with SBC or RSBC.

Tax credit statues.

  Tax credit Short Statute
  Small Business Capital SBC   See Statute § 2357.62
  Small Business Venture SBV   See Statute § 2357.63
Rural Small Business Capital RSBC See Statute § 2357.73
Rural Small Business Venture RSBV See Statute § 2357.74

Tax credit reporting requirements

The requirement is all information that would allow the public to learn how much was claimed to have been invested in which businesses; the amount of tax credits received; the identities of those claiming to invest money that qualifies for tax credits; and those receving tax credits. It should be noted those investing and receiving tax credits are not necessarily and seldom are the same. That is part of what allows and hides the fraud.

Statue specifying tax credit reporting requirements Statute § 205

Key language extracted from Statute § 205

27. The disclosure of information, as prescribed by this paragraph, which is related to the proposed or actual usage of tax credits pursuant to Section 2357.7 of this title, the Small Business Capital Formation Incentive Act or the Rural Venture Capital Formation Incentive Act. Unless the context clearly requires otherwise, the terms used in this paragraph shall have the same meaning as defined by Section 2357.7, 2357.61 or 2357.72 of this title. The disclosure of information authorized by this paragraph shall include:

a. the legal name of any qualified venture Capital company, qualified small business Capital company (SBC), or qualified rural small business Capital company (RSBC),

b. the identity or legal name of any person or entity that is a shareholder * or partner of a qualified venture Capital company, qualified small business Capital company, or qualified rural small business Capital company,

c. the identity or legal name of any Oklahoma business venture, Oklahoma small business venture (SBV), or Oklahoma rural small business venture (RSBV) in which a qualified investment has been made by a Capital company, or

d. the amount of funds invested in a qualified venture Capital company, the amount of qualified investments in a qualified small business Capital company (SBC) or qualified rural small business Capital company (RSBC)and the amount of investments made by a qualified venture Capital company, qualified small business Capital company (SBC), or qualified rural small business Capital company (RSBC);

*Ed note: It is these shareholders who receive 100% of the tax credits. Yet, this are not the names reported on OpenBooks. Only names those who use the SBC and RSBC tax credits are reported on OpenBooks. OTC substituted the list of users for the list of those receiving, and left the SBV and RSBV off the substituted list.

A. No information, regarding amounts or indentities related to SBV and RSBV are not reported

B. Anyone receiving SBC or RSBC can hide their identity by selling their tax credits.

Viewing Tax credits on OpenBooks.

Notes: There are at least two major elements of misreporting.

False reporting 1. OpenBooks reports the tax credits users and not those receiving tax credits as required. A significant difference.

False reporting 2. Totally missing are the Small Business Venture and Rural Small Business Venture tax credits.

Those familiar with OpenBooks will quickly notice how all of the user friendly features of OpenBooks have been stripped from the tax credit section. You find no totals, and are limited to only viewing 25 of the 11,000 tax credit users at a time. Or, 25 of each category of tax credits. Either way you have to manual copy and total the amount from each and every line.

To save time two options are provided.

A. A spreadsheet containing all 11,000 (approximately) tax credit information found on OpenBooks, plus totals per tax credits, and a breakdown of the approximately $290 million in 2007 tax credits OTC failed to report when only reporting approximately $90 million of the $380 million.

The quick and easy way is found below, where you can simply examine the OpenBooks selection options and find Small Business Venture and Rural Small Business Venture credits missing.

Finally, I not only encourage, but insist that each person verifies the easier paths, provided. For two reasons: A. To ensure everyone has the experience of knowing how diffucult it has been made to learn anything about tax credits. B. For the conspiracy theorist, to put their Bull S... to rest, or better yet eat it, once and forever more! Has that been made clear enough?

Visit OpenBooks Tax Credit section go to OpenBooks

Under "Select Type of Tax Credit" click on the drop down list

You will not on find "Small Business Ventures" and "Rural Small Business Ventures," only "Small Business Capital Credit" and "Rural Small Business Capital Credit"

OpenBooks - tax credits reported and missing.

Required but NOT found on OpenBooks

Small Business Venture
Rural Small Business Venture

Tax credits found on OpenBooks but false reporting

Rural Small Business Capital Credit<
Small Business Capital Credit

$220 million in hidden tax refunds for 59 of more than 112 counterfeit tax credit users and OTC management.

$220 million in hidden tax refunds for 25 of more than 1500 tax credit holders wanting refunds.
  • These $220 million in refunds would be over and above tax credits used to avoid paying state income taxes
  • Tax refunds are paid for tax credits already used to avoid paying state income taxes?

$220 million in tax credits would represent investment claims of a minimum of $440 million.

Tying tax refunds to missing tax

The venture sub-class of tax credits Small Business Venture and Rural Small Business Venture are the tax credits OTC hides and doesn't report, and the same tax credits virtually all tax refunds are issued in exchange. This was uncovered in internal OTC emails.

Visit OpenBooks Tax Credit section

Using our ability to reason.

No officials is going to purposely commit the crime of false reporting to hide something legal.

All the hidden tax credits receive tax refund checks, which the law does not allow.

These particular tax credits were quietly held until, Quartz Mountain Aerospace failed, exposed Altus Ventures false tax credit claim. Then there was a sudden urgency to cash the credits in for refunds.

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