Date: July 2, 2010
To: Appropriate federal and state authorities
Evidence suggests BOK Financial, BOKF: engaged in illegal tax credit and avoidance activities.
An examination of recently obtained BOK state tax credit claims(C); and SEC(D), FDIC(E), Federal Reserve Board(F) filings; reveal what I believe is the following:
1. Bank and state tax credit fraud. BOK insiders misrepresented $455 million(C) in bank loans as venture capital investments in the companies taking out the loans; in order to obtain $91 million(C), in unearned state income tax credit.
2. Federal tax avoidance. To avoid exposing the fraud and the bank paying federal taxes on the full $91 million, the insiders paid the bank $19 million(D) for the tax credits. The BOK only reported the $19 million(D) as revenue. Easily hidden with tax credit records held in secrecy.
3. Insider gain. Insiders misused the bank to obtain $72 million in unearned tax credits, for personal gain.
4. Hidden. The fact tax credits aren't normal banking revenue; no specific details were reported on any federal reporting forms, regarding tax credits; and tax credit information is held in strictest confidence; there would be no reason for even examiners, to suspect or question any of this.
5. Potentially much more. These discussions are limited to years 2006 thru 2009, where the most complete information is available. Partial information available for other years clearly demonstrates this could exceed $400 million, and warrants further investigation.
6. Related issues. This is another in a series of Oklahoma state income tax credit fraud cases uncovered, during more than 3 years of investigating. This fraud involves "Venture Capital"(G) tax credits. Other reported frauds involve Capital Formation Incentive Act(H) tax credit programs, and covered in a separate report. Included in the evidence is $643 million in fraudulent loan documents found after the FDIC seized First State Bank Altus OK. These fraudulent loan documents were used in a manner similar to BOK's claims to obtain unearned state income tax credits. In spite of such clearly abundant and convincing evidence, authorities have chosen to ignore repeated request to examine the program, abundance of evidence, and discrepancies found in public documents; all easily accessible and available on line.
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