Half price tax credits. How the Foxborough/WFG Investments scheme worked
April 2, 2010
OTC gives Switzer and partner's $15 to $22.5 million in tax credits for investing $1.5 million.
10% to need, 90% for greed! How did that happen?
WPG Investments charged 8% of the total, or $6 million, in fees for Foxborough's tax credit investment scheme.
The scheme uses loans to inflate a $7.5 million investment to claim $75 million was invested, as explained in the recent article "Scheme used by Barry Switzer and others at Foxborough to get tax credits and sell at half price."
The remaining $67.5 million or 90% of the $75 million comes from loans the business ventures claimed to be receiving the investments are required to mortgage their own assets to obtain. The loans amounts, are then passed through Foxborough, on paper, so Foxborough can claim it was an investment, and receive 20% to 30% tax credits on the total, $75 million.
With only $7.5 million invested and $6 million of that taken in fees, leaves only $1.5 million. Meaning the Oklahoma Tax Commission, is knowingly giving Foxborough and others $10 to $15 for each dollar that goes to generate economic growth and jobs. And, WPG Investments, a Dallas firm takes home $6 million or 4 times the amount invested in Oklahoma businesses.
This program serves only one purpose, to steal public funds, through tax credit scams.
WPG Investments', Frank McGuire, stated so in his email offering 2009 Oklahoma Tax Credits 50 cents to 55 cents on the dollar. See email.
Foxborough spells this out very clearly, in its prospectus, under "Investment Strategy." Meant only for the eyes of those buying tax credits.
"Oklahoma Tax Credits: The primary objective of the Capital Company (Ed: Foxborough) is to make investments in Oklahoma small business ventures and Oklahoma rural mall business ventures that qualify for Tax Credits under the Business Incentive Acts."
"a Portfolio Company (Ed. business receiving investment) will be very Capital intensive, in contrast with service companies, for example, which are personnel intensive."
Ed. In plain language: Our goal is tax credits, we don't want companies with employees. We only want companies that don't need money and have the free and clear assets (equipment, real estate, etc) to borrow the money to give us on paper so we can give it back, call it an investment and get tax credits. The OKC parking garage was a perfect example, and Foxborough has more parking garages in its plans.
These are not investors, but faux or straw investors, willing to ignore fraud to avoid paying their share of taxes; and more than willing to ask no questions as long as they can benefit financially. To have someone like Barry Switzer, who is well known and connected (close to the governor), to be involved; makes it socially acceptable, greed.
Make no mistake. This is fraud and this level of fraud can only exist with the full cooperation and protection of several key state officials, across all branches of the state government.
The fraud is executed in the Oklahoma Tax Commission, which comes under the supervision of the state treasurer. Barry Switzer, just had a fund raiser for Rep. Ken Miller, running for state treasurer. Miller is currently chairman of the House Appropriations and Budget Committee, one of the most powerful positons in the legislator, while tax credit fraud runs rampant and ignored. While Switzer and cronies pilage the state treasury.
It gets much worse.
December 22, 2009, Foxborough sent a letter to OTC requesting OTC rule the scheme qualified for tax credits. Foxborough described the plan above, to raise $7.5 million from investors, then use loans to inflate the amount to $75 million. There was also language in the request stating the amount could be more.
- December 31, 2009, 9 days later, OTC issued a ruling Foxborough's scheme qualified for tax credits.
- Two weeks later on January 13, 2010, Foxborough filed its
with the SEC stating is had already raised $24 million for the scheme, as of December 31, 2009, 9 days, after describing $75 million. This means
- Foxborough had already sold $48 million in tax credits.
- Foxborough would claim investing as much as $240 million.
- WPG Investments would receive $19.2 million in fees
- Oklahoma's economy would receive the smallest part of $4.8 million.
Note: To simplify explanation, the above was based on 20% tax credits. Foxborough's request and the OTC ruling were for both 20% and 30% tax credits. Foxborough had already claimed investing $60 million in 2007 and $74 million in 2008, which averaged 43% rural and 57% non-rural.
Where is the economic growth? There is none, it is all in the pockets of state officials and friends.
Where are the jobs? There is none, it is all in the pockets of state officials and friends.
10% to need, 90% for greed! Greed on top of greed!
WPG Investments, an out of state firm takes home $6 million or 4 times the amount invested in Oklahoma businesses. Really makes a person proud to be a "Dumb Okie"!
See rest of story at http://prowlingowl.com
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