<< Back     Next >>        for index -

Index Section Topics A   Cover letter B   Unearned gains, BOK and insiders. B.1   BOK Financial Corp - Unreported Income and Tax Years B.2   BOK Financial Corp Insiders B.3   Robert G Heard - Cimarron Business Capital Company 1   How the fraud works 1.1   BOK's list of investments 1.2   BOK claimed venture Capital investments for ineligible for businesses 1.3   Additional evidence 2   Source of evidence 2006 – 2009 2.1   Oklahoma Tax Commission auditor's questioning claim ignored 2.2   Fraudulent financial transactions 2.3   Failure to report income to avoid paying federal taxes 3   Source of evidence (partial) 2001–2005, 2010. Potentially $369 million more 3.1   Partial evidence for 2001 thru 2005 3.2   Most complete evidence January 2010 4   Tax credit programs operated in secrecy, to prevent discovery 4.1   First, a quasi-state agency 4.2   Second, OCIB was assigned sole authority 4.3   Third, Heard the president outsources OCIB to self 4.4   Heard authorizes himself $3.4 million and BOK $91 million in tax credits 5   Involved parties 5.1   Caution over confusion 6   References

Evidence suggests BOK Financial, BOKF: engaged in illegal tax credit and evasion activities. (cont)

July 2, 2010

2. Source of evidence 2006 - 2009

Oklahoma Tax Commission auditors emails and attachments. BOK state tax credit claims The evidence found included as attachments to a January 2010 email^(B), an Oklahoma Tax Commission auditor, sent to the director of tax policy, which the director chose to ignore. The auditor questioned two suspicious related claims, filed by a BOK subsidiary, Cottonwood Valley Ventures, under the "Venture Capital" tax credit program^(G) that ended one year earlier, in 2008.

The evidence came in three parts

2.1 Oklahoma Tax Commission auditor's email and attachments^(B)

A. January 2010, BOK filed an amended 2008 tax credit claim^(C), reporting Cottonwood Valley Ventures had received $800 million more in investment funds than was reported on its 2008 claim. This overlooked investment supposedly came from another BOK subsidiary, CVV Partnership. The reason for this would be found in the second claim, that BOK was now claiming tax credits for 2009 when the program expired in 2008.

An oversight BOK also omitted on various other federally mandated reports. BOK did not amend the other federally mandated reports to match the tax credit claim, which would be a misrepresentation on those reports if there was, in fact, an $800 million investment commitment. Conversely, if BOK amended other reports to reflect an $800 million investment commitment that did not exist would be a misrepresentation.

However, while the other reports would be available for examination, the tax credit filings were expected to never be available to anyone.

B. BOK filed a 2009 tax credit claim^(C) based on its new interpretation of the law that the $800 million it now claimed to have invested in 2008^(C), would remain eligible for tax credits, even though the program had ended. BOK claimed $20 million in "Venture Capital(G)" tax credits, for investing $99 million during 2009, leaving $740 million that would be eligible for tax credits in future years.

The auditor was rightfully questioning the legitimacy of the BOK's claim and how an $800 million investment could have been overlooked and then not noticed for more than one year.

2.2 Fraudulent financial transactions

Found in the tax credit investment claims^(C) and described in this letter.

2.3 Failure to report income to avoid paying federal taxes

Found in the SEC filings^(D) and described in this letter.

Note Parts 2 and 3 fall outside the auditor's scope for this particular program, and therefore he likely had no reason to dig deeper and suspect further wrong.

References

(B) January 2010 Oklahoma Tax Commission auditor's email

(C) BOK or Cottonwood Valley Venture state tax credit investment claims

(D) U.S. Securities and Exchange Commission filings

(G) The fact that fraud is occurring under different but similar programs has attributed to considerable confusion. This particular case involves the following, commonly referred to as "Venture Capital" tax credits: Oklahoma Statute 68 § 2357.7 - Credit Against Tax for Investments in Qualified Venture Capital Companies - Pass-Through Entities;

How fraud works << Back     Next >> Source of evidence 2001 - 2005