Oklahoma Tax Commission involvement in tax credit fraud and cover up
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Index
  Section Topics
 Cover Letter
1Overview
1.1What is involved
1.2How much is involved
1.3Who is involved
2Two tax credit claims filed for 2006 are explained below.
2.1.Altus Venture, Affinity Ventures, Quartz Mountain Aerospace, OK Industrial Venture
2.2Scissortail
2.3.Oak Hills Capital
3Oklahoma Tax Commission negligence and cover up
3.1New evidence uncovered since the original letter.
3.2Copies of Oklahoma Tax Commission emails obtained
4Colorado land scam and tax credit fraud connection
4.1The scam
4.2What Happened?
4.2.1Place liens on the property
4.2.2Deplete the funds to pay off loans
4.2.2.1Mirrored bank account
4.2.2.2Loan Kickbacks
4.2.2.3Bank and wire transfer fraud
5Coming unwound
5.1Colorado partners seize Altus Groups financial records
6Other noteworthy points related to tax credits include

Updated report to appropriate authorities - evidence of tax credit and bank frauds. (cont)

3. Oklahoma Tax Commission involvement in tax credit fraud and cover up

March 2009, evidence was provided Oklahoma Tax Commission, the tax credit claims submitted by both Altus Venture and Scissortail failed to meet multiple eligibility requirements. Most noticeably, by misrepresenting amounts invested as mentioned above. For 2006, Altus Venture misrepresented by $189 million, the amount it invested. Scissortail misrepresented nearly $90 million. Oak Hills Capital misrepresenting $75 million, was uncovered later.

This information was presented, using both email and in phone conversations, to Dawn Cash, Oklahoma Tax Commission, Director of Tax Policy. In offering evidence, I pointed out the key evidence was found on the tax credit claims in Cash's custody. In addition, for Altus Venture; estimated salaries, wages and benefits, and number of employees by period; list of all equipment purchased including shop, tools, offices, vehicles, materials, etc; was slightly over $32 million. The additional was equipment and materiala on hand before the 2006 investments. The total investments, including previous investors, going back to the late 1990's, which tax credits were previously received, was slightly over $40 million total.

Scissortail's failure to qualify was equally if not more obvious; with no evidence the claimed businesses ever existed, and certainly not as qualifying businesses.

Both, cases would take little more than requesting evidence that investments did occur and verifying by comparing financial transactions available from bank records, report filing requirements; a other means, all available to the tax commission and state authorities.

3.1 New evidence uncovered since the original letter

Oak Hills Capital covered See 2.3 Oak Hills Capital

3.2 Copies of Oklahoma Tax Commission emails obtained

Earlier this year, copies of internal OTC emails covering the period late 2008 through April 2010, where obtained, and revealed the hurried effort by OTC to issue tax refund checks right after QMA failed. We see from Chaparral Energy's SEC filings it still had some $27 million in unused tax credits, received from the Altus Venture fraud.; Chaparral stood to lose this if an investigation ensued. The potential for an investigation of QMA's failure to forward payroll withholding, employees denied health and dental insurance, and unemployment, left no doubt there would be some federal agencies poking around. The FDIC and Federal Reserve Board were still a few weeks away from issuing Cease and Desist orders. Doughty and Anderson were aware of the evidence Colorado victims had found on the seized computer and were sending to be put online, on prowlingowl.com

Instead of OTC acting in the proper fashion to investigate clear evidence, of fraud, OTC, under took a hurried action to issue tax refund checks for unused fraudulently obtained tax credits.

The issuing of refund checks took until July 2009. Those from other divisions brought into handle the refunds could find few if any records. Those records had to be recreated from whatever sources they could find, including contacting those filing the claims.

While not aware of what was occurring inside OTC, more evidence was provided in March 2009. The emails reaffirmed OTC's ignoring the evidence; and, rather than recovering fraudulently obtained public funds, used their authority and resources to ensure the stolen money would get into the hands of the undeserving. In all of this, there was never a mention of the unqualified tax credits obtained by any of the schemes.


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