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
Ten more 2006 scams using the Scissortail scheme reaping 540% in unearned profits.
To set the stage, lets first point out that the Scissortail scheme cost the taxpayers $27 million to generate a mere $5 million in venture Capital investment funding. The $27 million in tax credits was all skimmed for profits. The program operated honestly would have generated $90 million in new Capital at the same $27 million costs to the taxpayers. In total, the taxpayers were scammed for $25.5 million (only $1.5 million could have been justified), and Oklahoma's economic future was cheated out of $85 million in Capital funding.
| Scissortail Scheme investment cost, risk and profits In $ millions |
|||||||
| Fund source | Funds invested |
Funds received |
Profits | Losses | Amount at risk |
Net Gain/loss |
|
| Scissortail | 0 | $17 | $17 | None | None | $17 | |
| Investors | (1)$5 | $10 | $5 | None | None | $5 | |
| Business venture | (2)$85 | $90 | $5 | None | $80 | $5 | |
| Taxpayers | $27 | None | None | $27 | $27 | - $27 | |
| Notes | |
| (1) | There was never a need for an actual investment since this is all a paper shell game. Scissortail would receive the $27 million in tax credits before any money was invested in the business. Then the tax credits shared with the investors or sold for cash. The tax credits automatically become valid at the time the business venture receives the investment. It is a wash. |
| (2) | Although Scissortail tries to claim it is the party taking out the loan, the business venture has to sign over its own assets to secure the loan, and the loan would have to be paid out of the business venture's profits. This leaves the business venture's assets at risk. |
Now we find at least 10 and possibly 23 more.
OTC issued 24 determination letters for investment plans to receive tax credits under the 2006 Grandfather clause. At least ten of the other plans were the same scenario as the Scissortail scheme that failed to meet most requirements, including the key requirement that investments must be at risk. These plans describe the same scheme as Scissortail's raising $5 to $15 million from investors, then using the assets of the business venture receiving the investment to borrow from $85 to $90 million. This transferred the risks to the business venture.
This is a financial shell game that any reasonably intelligent person should readily see in reviewing the first plan. Yet OTC issued determination letters knowing they did have to reveal the information to anyone.
Then the Scissortail plan allowed taking $27 million in tax credits immediately. Benefits never imagined with legitimate investments. Scissortail could then divide the $27 million in the following fashion. $5 million, in clear profit, for the investors, if they had not already paid their investment share. $10 million if they had paid the $5 million investment. $5 million to the business venture, which also receives the $85 million in loan proceeds. Scissortail keeps $17 million as its own profit.
The business venture received an extra $5 million for serving as the shill and the $85 million loan backed by its assets and will have to be paid out of its profits.
The cost to the public? $27 million!