How Oklahoma's Venture Capital Tax Credit Fraud Works
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How Venture Capital fraud works
Using Bank of Oklahoma as an example
Step    According to law      What is occuring  
1 Investor(A) invest in fund(B)   Investor(A) invest in fund(B)  
2 Fund invest in investments meeting qualifying criteria   Few, if any, investments are made.  
 
3 Fund submits a list of qualified investments, and how much money was invested in each business.   Fund submited a list of business loans made during the year, claiming these loans as investments.  
 Notes:
  Investments are high risk, provide an ownership interest, are not secured by assets, and do not pay interest.

Tax credits are incentives for taking these risks
  Loans are low risk, secured by assests, pay interest and provide no ownership interest.

False claims, resulting in unearned tax credits
 
 
4 State oversight agency is required to examine claimed investments to insure the investment meet eligibility requirements, before authorizing.   A private individual signs off stating both BOK loans, and his own investments qualify for tax credits.  
 
5 Although state lawmakers failed to include this requirement, investment claims should be recorded, tracked and later evaluated to determine if program is working, needs improvement, etc.   There is no tracking or accountability. All records are withheld from the public to insure no one learns what is occuring.  

Notes:

  • (A) CVV Partnership
  • (B) Cottonwood Valley Ventures.

Notes:
(1) As used, here BOK collectively refers to BOK Financial Corp, subsidiaries and affiliates; most notably, a banking subsidiary BOK Oklahoma; and BOK Oklahoma subsidiaries' Cottonwood Valley Ventures and CVV Partnership.
(2) As used, here Cimarron refers to Cimarron Business Capital Company.


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