Oklahoma Tax Commission is allowing $100s million in false claims to go unnoticed!
August 7, 2009
Now that previously hidden evidence has surfaced showing Oklahoma Industrial Venture Capital Company LLC and Scissortail Capital Company LLC were two of at least 12 out of 21 funds that filed inflated investment claims for 2006. For two years this remained hidden from the public and we are expected to believe went undetected. What is more believable considering the circumstances is these false claims went undetected by design.
The secrecy surrounding this program is so effective in 2 years we have only managed to locate sufficient information on two programs to determine the legitimacy. Both were found to have been false claims.
We have located varying degrees of partial information on many other programs, most offering multiple reasons to be suspect, and at least 3 with so many questionable elements that to not be false claims would require a combinations of special circumstances that puts any legitimacy beyond the realm of reason. Certainly more than adequate reasons to justify an open investigation.
The tax credit investment program operates in a self-serve free standing style with no state official or agency providing oversight or accountability. Only the Oklahoma Tax Commission is involved. This program costing the public $100s millions is so lacking in accountability all the documents for the entire program fits in the flap of a brief case. The entire body of information could easily be the domain of one individual and only occupy a small amount of time. With the secrecy requirement other OTC employees would have no reason for suspicions as long as this was a high level member of OTC. The very situation the checks and balances of our constitutional form of government were intended to protect against, until a law was created to defeat those checks and balances, opening the door to widespread public fraud.
The shell games used in an attempt to disguise while easily confusing the average person that hasn't done their homework shouldn't fool anyone that has done their homework and has the information.
The glaring fact that cannot be ignored -- are we to believe that over one-half if not more fund managers would risk the consequences of being caught filing a false claim if they thought their claims would be subjected to responsible scrutiny? If we believe that then we have to believe there are people attempting fraud every place.
OTC ignores the conspicuously obvious.
- A small unknown LLC, Oklahoma Industrial Venture Capital Company (OIVCC), a subsidiary of the Altus Gang, which is currently under investigation by federal agencies, filed a 2006 (Rural) claim stating it invested $200 million in one company and received $60 million in tax credits. The Oklahoma Tax Commission apparently made no effort to verify even the conspicuously obvious failures of the claim to qualify.
One obviously suspicious factor was a requirement that OIVCC could not have more than 25% invested in any one venture. This would mean OIVCC have a total of $800 million invested in other Oklahoma business ventures. Something that would be so highly unusual it demanded this claim be verified. Other recently uncovered OIVC clearly shows
- Another company, Scissortail, submitted a claim taking 540% in upfront profits. Guarantying investors an immediate a 200% profit, while keeping 340% in profits. Phrasing the Scissortail deal another way: in October 2008 a group of investors agreed to invest $5 million in a venture investment plan. These investors received $10 million in tax credits during that same October 2008 allowing them to avoid paying $10 million in 2008 tax credits. The investors could sell tax credits they would not need for cash. That left Scissortail with its $22 million in immediate profits, convertible to cash.
One obviously suspicious factor was a requirement that OIVCC could not have more than 25% invested in any one venture. This would mean OIVCC have another $600 million invested in other Oklahoma business ventures. Something that would be so highly unusual it demanded this claim be verified.
- Neither OIVCC, Scissortail nor at least 10 other investment schemes met the money invested at risk** requirements to qualify. It is impossible to find any risk in a guaranteed profit, let alone an immediate 200% profit! For any who may not immediately catch the obvious, a simple spreadsheet exercise would quickly expose the problem.
The element most frequently found in false claims is the misrepresentation of the amount of money invested "at risk " which is the most easily camouflaged by stringing together arcane financial terms in an effort to confuse the unfamiliar. Once we strip away the cloud of unnecessary financial babble it stills boils down to a very concept explained with the following analogy.
Funds invested at risk analogy View more.