Subject: RE: Letter to the editor From: "John Daniel" john@ppa.kscoxmail.com Date: 4/4/2010 12:34 PM To: nite@prowlingowl.com Nick, I talked to Joe Courtney last night and he will talk to you. I will include his phone number, he understands that you will keep confidentiality and not get him any more trouble than he already has. Phone: (580) 471-0227. JD&A LOGO John Daniel PO Box 751 920 Millington Winfield, KS 67156 620.402.6282 B 580.471.3700 C From: Nick [mailto:nite@prowlingowl.com] Sent: Sunday, April 04, 2010 12:06 PM To: John Daniel Subject: Re: Letter to the editor John, Thanks and that helps a lot! The following was something you mentioned an early email. I am wondering if you meant Oklahoma? If this also a high priority Kansas, it mean there is a lot more than I was aware. Acerio had something going on around Coffeyville. Maybe there is more there? Nick, when I talked to the FBI he did say that this was one of the priority cases Kansas. Nick On 4/3/2010 8:18 PM, John Daniel wrote: See below. JD&A LOGO John Daniel PO Box 751 920 Millington Winfield, KS 67156 620.402.6282 B 580.471.3700 C From: Nick [mailto:nite@prowlingowl.com] Sent: Saturday, April 03, 2010 3:08 PM To: John Daniel Subject: Re: Letter to the editor John, Thanks and, as always I enjoyed chatting with you and find you an invaluable source of information. I found myself a little confused on who Doughty claimed played which roles the $189 million, and that may be because there was some shifting of money around, and the fact there were different sources of loans and money at different times. My notes are so scratchy I may have things mixed up. We now know there was no real $189 million. So the questioned are phrased the context of the story Doughty was claiming. There are 3 questions on that. Then a 4th question that is new, if you are so disposed to answer or have answers. 1. There were the debentures. I believe this was real money? Yes, that was real. Raised from individuals, investment funds, etc. Many individuals invested only after I arrived. Some were local and some were my friends and family. They had raised about $4.5 million before you came and then you raised the rest to bring the total to $9 or $11 million. I helped raise the rest to $ 9 million 2. Between the debentures and tax credits there was a loan from Lehmans and/or ? Did QMA pay this interest and was this the 8% interest? We paid the debenture holders 8% interest one time when the debentures matured. (As my wife remembers this would have been 2005) The interest on the large loan (s) was 8 basis points above what the Treasury bonds were earning. We paid the 8 basis points and the lender got that plus the interest from the Treasury bonds. 3. The $189 million FSB Altus loaned Did QMA pay this interest and was this the 8% interest? Yes we paid only the 8 basis points, the lender also got the interest that the Treasury notes were paying. (All of these loans were used to buy Treasury notes) Who was the money invested in? Capital West and/or who ???????????? Who got this interest? The big money from Lehman(?) was held the QMA “untouchable” account and converted to Treasury Bonds. Lehman (?) got that interest + 8 basis points from QMA. ------------------------------ 4. New question. Do you remember hearing any names of those receiving tax credits? Here is something that might help, and shows how the investors and where they invested their money, can be misleading. The tax credit program was designed for fraud. There are at least 2 different classes of investors. A. “Common Investors.” Those investing the common shares which is the money going to the investment like, QMA. B. “Preferred investors.” Those investing and getting an interest the Capco, which the 2006 case (the only ones I have a name) were OIVCC and Affinity Ventures. “Preferred investors” Get all of the tax credits and “Common Investors” none. Obviously, most investors would be both Preferred and Common. Doughty could work these splits to give better deals to some. I did find on Chaparral Energy’s SEC filing where it invested $15 million Altus Ventures 2006 and got $30 million of the $60 million for that year. That leaves another $30 million unaccounted for 2006 tax credits. The $66 million 2005 tax credits would cover paying those investing the real $32 million their $2 for $1 profits. You might these fake loan amounts interesting. Altus Venture Capital Fund V (AVCF V) $189 million Altus Venture Capital Fund IV (AVCF IV) $85 million Altus Venture Capital Fund III (AVCF III) $14.5 million Used to set up Global Industrial Leasing business. Oklahoma Industrial Venture Capital Company (OIVCC) * $218 million Affinity Venture Capital Company $67 million Affinity Ventures Capital Fund I $69 million The AVCF V $189 million loan fit the 2005 claim, as described news articles. This was addition to the $32 million real money 2006 Altus Venture Capital Fund V claimed to have invested $200 million QMA. Affinity Ventures Capital Fund I claimed to have invested $21,635,430 QMA Not everything matches and there is money left over. My take is that after Doughty got by with the 2005 deal and buying a state lawmaker or lawmakers to let him help write the new law; Doughty didn’t worry anymore about faking a good paper trail. At that point it didn’t matter. As long as they could keep everything secret, no one would know. If there were ever a legit investigation, like now it didn’t matter; $200 million plus or $400 million plus; why bother, everything had already gone too far; Nick I agree, the only ones I have knowledge of are the ones that brought working capital into QMA. I am sure since I was not one of the “Boys” they insured that there was a good paper trail. You are probably right, since they found it so easy they just kept going with fake loans and with no real paper at closing that showed where the money went. Joe Courtney should have copies of all of the QMA closings. (Or did before the bankruptcy.) I did know about Chaparral but don’t know any other investor names. JSD On 4/3/2010 1:52 PM, John Daniel wrote: Nick, good to talk to you, here is the letter I sent the Altus Times. JD&A LOGO John Daniel PO Box 751 920 Millington Winfield, KS 67156 620.402.6282 B 580.471.3700 C www.johndanielandassociates.com