New evidence OTC cover up - missing documents, hidden refund claims, blocking audits, more!
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Oklahoma Tax Commission cover up. Missing documents. Hidden refund claims. Blocking audits.

An extensive examination of Oklahoma Tax Commission (OTC) emails, cross-referenced(1) with related documents uncovered, revealing new evidence of extensive cover up used in hiding tax credit fraud. Fraud extensively document on Prowlingowl.com.

Multiple means of cover up at OTC was exposed as a result of reactions triggered by the November 2008 failure of Quartz Mountain Aerospace, used in false claims, to obtain $66 million in unearned 2006 rural small business tax credits.   -

Those who received the 2006 tax credits were eligible to receive refunds after October 31, 2006. Tax credits could be exchanged for previously paid gross production taxes, with no limit on how far back. Some went back to year 2000. There was no reason to wait, and to wait would mean losing serious money in interest.

Claims were filed, but stashed in boxes, where the claims would remain for two years, when concerns arose the claims might draw attention. This would cost those waiting a significant loss in interest. Chaparral Energy, received $30 million in tax credits, for investing $15 million, in QMA through Altus Ventures. Chaparral was still waiting after two years for nearly $28 million, in refunds. Serious money. On the other hand, exposure could mean the loss of both their $60 million in tax credits, plus their original $30 investment. The failure of QMA, meant they should lose both their $64 million in unearned tax credits plus $32 million investment.

The point obviously, none of this would have occurred, if the tax credits were legitimate. No one would sit by quietly, losing interest on $60 plus million, when they had a legitimate claim. Money talks, and money is saying, there is public corruption at the tax commission, and at every agency and involving every official, turning their backs.

Fraud on fraud.

With cover up hiding the false claim, the investment failing far short of meeting eligibility requirements, was the first visible disqualification of the investment. This automatically required the Oklahoma Tax Commission (OTC) to recover the entire $66 million tax credits.

Instead, Tony Mastin, head of OTC, in blatant disregard law, directed OTC employees to expedite insuring those still waiting receive all of their promised unearned public money, plus slip in an extra $30 million. Now the public has been robbed of $96 million.

Insuring those received their unearned money, would force the state to take proactive action to recover the stolen money. Something state officials cannot afford to do, without some exposing their own involvement, and others exposing their failures to protect the public interest.

In all the disarray, $30 million was credited twice, boosting a stolen $66 million to $96 million, and a stolen $135 million to $165 million. The way this played out suggests, not just missing documentation, and poor record keeping, but tampering. -

The lack of documentation and record keeping kept OTC employees trying to sort out the impossible. Initially, January 23, 2009, they had the amount at $165,514,495. January 26, 2009, someone correctly discovered $20,364,324 and $10,014,810 had been transferred from one account to another, and counted both places. The total was reduced to $135,135,36. In line with the Capco reports or original claims showing $138,180,927. There nothing found in the emails to account for the difference between $138 and $135 million.

The $20,364,324 and $10,014,810 would be Altus Ventures (and possibly some of Affinity Ventures, both managed by Paul Doughty) and Chaparral. Chaparral's SEC filings identify Altus Ventures as the source of $20,364,324. The $10,014,810 showed up on a later filing and avoided identifying.

June 4, 2009, the $10,014,810 reappears, raising the total to $145,150,171. December 18, 2009, the $20,364,324 reappears, raising the total back to $165,514,495.

Uncovered, cover up included:

  • Several boxes containing more than 1,600 tax refund claims, surfaced, shortly after QMA failed. Claims dating back to early 2007, for the $60+ million in unearned 2006 tax credits.(4)
  • OTC employees were instructed to ignore verifying refund claims and pay refunds claims ASAP. Employees, unaware documentation was missing, were told they could verify the claims after paying. This shifted the burden to employees to prove claims were not valid, without the benefit of documentation. Never happen!
  • Failure to collect and maintain documentation required to qualify for tax credits. It would be another eleven months, October 2009, before it was discovered documentation was missing, for not only 200, but for all tax credits years.
  • Disguising documentation was missing.
  • No system for processing or record keeping would required claims processors 8 months to issue refund payments, without auditing.
  • Crediting the same $30 million(2)(3), to two different accounts, increasing the original $135 million to $165 million. Addressees above.
  • It was also learned there not been any audits since the 2006 tax credits or Mastin took over as head of OTC, in early 2007. Prior to then, there had never been a field audit and only 6 non field audits for three programs going all the way back to the late 1980's. The audit staff is grossly under manned, by design.
  • Auditors contacting those responsible to provide the missing documentation were restricted to only requesting documentation missing for 2007 claims.
  • When auditors, received and examined 2007 documentation their findings that tax credits were allowed for unqualified 2007 investment claims, were ignored. See auditors findings.
  • Auditors ignored, after finding - unqualified investment claims recieved tax credit, for 2007. See auditors findings.
  • Only weeks later, in January 2010. The same auditor was ignored again, when questioning eligibility of an $800 million claim filed by a BOK subsidiary, more than one year after the program expired. View
    • Note: auditors had already been restricted from known questionable claims.
  • March 2009. The additional evidence of false 2006 claims to go with information I had provided OTC previously.

Bits and pieces

Evidence of fraud in Oklahoma's similar, but different, "Venture Capital" economic development program, can be seen here.

Evidence reveals an additional $61 million, for false claims. Or, $127 million of $135 million in 2006 small business and rural small business tax credits were allowed for false claims.

With tax credits, OTC policy goes far beyond confidential required and found elsewhere. This examination required extensive cross referencing.

Notes:

(1) An examination of more than 1,200 OTC emails related to Oklahoma's Small Business and Rural Small Business Capital/Venture economic development programs(4); crossed referenced with evidence uncovered during four years investigating fraud involving two of Oklahoma's, more than 40 economic development programs.

(2) $30 million overpayment can be found and confirmed in two ways. A. the Capco reports, and B. Chaparral Energy SEC filings.

(3) It would appear both the $30 million overpayment, and missing documentation going unnoticed, were a result of a missing or flawed tracking system.


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