|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.|
|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.|
(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.