How graphic comparisons expose CAPCO like tax credit incentive scams

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

CAPCO or CRAPCO How graphic comparisons expose CAPCO like tax credit incentive scams

Below are charts illustrating key differences between 3 different venture funding programs

The traditional private sector venture Capital funding (VCF) model that was so successful in creating every high technology growth area in the US. Examples include Silicon Valley, Massachusetts, Denver and Austin TX.
Insurance CAPCOs responsible for scamming several states out of $100's million before the scam was recognized.
Oklahoma's CAPCO a variation of the Insurance CAPCOs.

The private sector VCF is the only legitimate version. The two CAPCOs are nothing more than financial shell games cleverly disguised as a private sector VCF. A close examination of the charts reveals significant major differences. The two CAPCOs use the same basic terminology, i.e. fund manager, investors and business ventures. The significant difference is the way the risk, cost and rewards are split. Anyone knowledgeable enough to perform calculations on real world scenarios would quickly realize the CAPCOs are merely a scam used to reap huge unearned profits at the public expense.

1. Charts illustrating differences between CAPCOs and private sector VCF -

Private sector Venture Capital Fund
Private VCF Cost Share	Private VCF Profit Share

State CAPCO Programs that scammed Oklahoma and several other states
State CAPCO Cost Share	State CAPCO Profit Share

2. Now see how Oklahoma version differs from basic CAPCOs -

Scam	CAPCO	CRAPCO - Oklahoma
Investors	Insurance companies	Private
Total refunded thru tax credits	100%	200%
Milestones to meet	A few, mostly irrelevant	None
State oversight/audit	Yes. Varies by state	None
In essence CAPCO consisted of insurance companies partners providing states a 10 year loan. The venture Capitalist partners would have the task of managing the investments. Taking 50% of the loan off the top for management fees. Leaving the states obligated to repay the loan in the form of tax credits. An average of 10% in tax credits per year. Oklahoma's CRAPCO is structured where: 1) The venture Capitalist find their own investors, cutting out the insurance companies. With no restrictions. 2) The state repays at the rate of 30% in tax credits up to 200% of the investment. How does that work? This is the fraudulent shell game part. The venture Capitalist arranges a artificial loan to inflate the investment (money at risk) to appear nearly 700% as large as it is. Actually 690% which is what it takes to turn a 30% tax credit into 200%. Note: The area of the law addressing the 200% limitations is ambiguous leaving it unclear, what, if anything, is in fact limited to 200%.

3. Now compare the 3 private sector VCF, basic CAPCOs and Oklahoma's CAPCO -


Based new business ventures receiving $10 million in funding.

	Cost/Risk		Rewards/Profits
	Success	Failure	Success	Failure	Notes

Private sector Venture Capital Fund
Public	None	$20 million Loss	None	None	Investors and VCF takes all the risk.
Private sector VCF	None	$100,000 Loss	1.25 Million + profits	1.25 Million Mgmt fees	20% profits come after the investment is paid off (1)
Investors	$9.9 million Loss	$9.9 million Loss	$9.9 million + profits	None	Recover investment plus 80% of venture profits (1)

CAPCO/Insurance funding program
Public cost	None	$20 million Loss	None	None	The public takes all the risk, yet receives no profits
CAPCO	None	None	None	None	The public takes all the risk, yet receives no profits
Insurance company	None (3)	None (3)	$13.6 million Gain	$13.6 million Gain	$13.6 million is interest

Oklahoma Capital Funding Program
Public cost	$20 Million Loss	$20 million Loss	None	None	The public takes all the risk, yet receives no profits
OK CAPCO Investors	None	None	$20 million plus 100% of venture profits	$10 million profit	The public takes all the risk, yet receives no profits

In Summary, government subsidized CAPCO's lobbied for and received programs were they always make a profit, even when everyone else loses!