BOK Financial Corp (BOKF), suspicious activities, using secretly operated tax credit program.
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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 BOKs 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 auditors questioning claim ignored
2.2 Fraudulent financial transactions
2.3 Failure to report income to avoid paying federal taxes
3 Source of evidence (partial) 20012005, 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 avoidance activities. (cont)

4. Tax credit programs operated in secrecy, to prevent discovery

All Oklahoma tax credit programs, are operated in secrecy. Tax credits are, by nature, off the books. This program is Oklahoma Statute 68 2357.7(G) - Credit Against Tax for Investments in Qualified Venture Capital Companies - Pass-Through Entities; commonly referred to a "Venture Capital" tax credits.

Through a series of maneuvers, oversight of this program was outsourced to a private individual, who owns one of only two companies allowed to use this program.

4.1 First, a quasi-state agency

A quasi-state agency, Oklahoma Capital Investment Board, OCIB(G), was setup as a public trust and funded in an off balance sheet fashion. This allowed OCIB to operate essentially as an independent entity outside the norms of state government.

4.2 Second, OCIB was assigned sole authority

OCIB(G) was assigned sole authority(J) to certify entities and investments, as eligible for "Venture Capital" tax credits.

4.3 Third, Heard the president outsources OCIB to self

Robert G. Heard, president of OCIB, arranged to privatize(J) OCIB, and outsourced management oversight of OCIB to a private company, Heard owned and managed; Institutional Equity Associates, LLC ("IEA") also known as "Edge." The contract(J) specifically stated Heard would have principal responsibility for the services performed by Edge, which meant OCIB. Heard remained on the OCIB board and would rotate the figure head title of president to various employees. Heard still ran the show as specified in the contract, having authority to authorize tax credits, but free of rules, regulations, restrictions, and reporting requirements imposed on state employees. This also freed Heard of State Ethics requirements that state officials disclose all business interest.

4.4 Heard authorizes himself $3.4 million(L) and BOK $91 million in tax credits.

While Robert Heard, a private individual, was secretly certifying BOK's $455 million in standard interest bearing secured loans, as qualified as venture capital investments; handing BOK $91 million in unearned public funds; Heard authorized himself $3.4 million in tax credits(L) through his own company Cimarron Business Capital, which went directly to Heard.

Operating with full discretionary authority to authorize unlimited tax credits, with state officials ensuring all information be held in strict confidence has prevented the public from seeing what has been occurring.

4.5 Officials ignoring.

It is noteworthy to understand authorities have steadfastly remained opposed to investigating or even examining this information held in confidence. State officials also ignored a State Auditor and Inspector's(K) report questioning the handling of this program; and a Multicounty Grand Jury report(F) describing the Oklahoma Tax Commission as having "serious deficiencies and at times blatant disregard for state statutes, regulations, and policies."

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.

References

(F) Federal Reserve Board filings; for 2006 thru 2009

(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;

(J) Oklahoma Capital Investment Board Management Agreement.

(K) Oklahoma Capital Investment Board Audit.

(L) Cimarron Business Capital Company

Notes: View


Source of evidence 2001 - 2005 << Back     Next >> Involved parties


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