The tax credits under abuse are to be used to encourage investors to take the risks inherent in investing in Oklahoma business ventures. We all know that business investment risks are the same as buying stock in a company. You give the company money for a share of the business. If the company goes down you lose your investment.
The fraud works by misrepresenting how much comes from different sources and where that money goes; a financial shell game. To see that requires performing financial scenarios and exercises that map out the money trail.
Following these money trails, reveals that seldom does an investor turn lose of their money. The schemes are designed to obtain the tax credits and give the tax credit to buyers or give the so called investors $2 in tax credits. In practice $1 goes to the buyer and the other $1 to the so called investor who never need to hand over any money.
This all occurs before the business venture actually receives the investment and could possible lose any investment. In other words, the venture never receives an investment of more than 7% or 10% if that much. It is all a scam, disguised inside shell games.
Note: 7% gets 200% profit from the 30% tax credit program. 10% gets 200% profit from the 20% tax credit program.
When business fail, which most do before lasting the required 5 years, the Capco request the tax commission rule the investment "market liquidity event" which allows keeping the tax credits. The tax commission automatically rules the failure a "market liquidity event" without evaluating the facts.
From beginning to end every step fails to meet the eligibility requirements. Every step the tax commission rubber stamps without any evaluation.
The only concerns found expressed by the tax commission are to insure the ruling requests are worded vaguely enough to provide enough legal wiggle room to cover the two managers.