Answer - The following is only a partial list.

• A law that gives a few pre-selected entities automatic access to take unlimited tax credits.
• Groups whose identities are kept secret are allowed to take tax credits worth 200% of the amount they claim they "intend" to invest.
• Yet they are "only required" to invest 25% of what was taken in an Oklahoma business venture, keeping 75% as profit. The law only requires they invest at least 50% of what they planned.
• Tax credits can be sold for the cash.
• The program operates (see note)*
• Outside the budget
• Totally unattended with no agency or officials monitoring.
• No agency providing oversight.
• No accountability.
• Funding is not included in the budget.
• There is no review or approval involved.
• The entire program is hidden from both lawmakers and the public, including
• How much money is going to the program
• Where the money is going?
• Who is involved?
• Who is benefiting?
• What if anything the public receives in return.
• State officials are free to benefit, knowing their involvement will be hidden from the public.
• Those caught violating are specifically exempt from returning the money.

* Note: There is some language suggesting oversight, but carries no teeth or specific objectives that must be followed.

Note: The area of the law addressing the 200% limitations is ambiguous leaving it unclear, what, if anything, is in fact limited to 200%.

We have provided a copy of the law and a list of what to look for and where to find it. Read the law.

As you can see this is not simply a law with a loophole. This is a law riddle with loopholes. A law so full of loopholes it has few clearly identifiable restrictions freeing the unscrupulous to create complicated and sophisticated variations of the basic scheme. There will not always be the same scheme, in some cases multiple schemes. E.g., tax credit abuse first then vendor billing fraud later.

Answer

The tax credits in question are those made available under what is now called the "Capital Formation Incentive Act", that allows for two different classes of tax credits to be taken.

• RFCFIA: Rural Venture Capital Formation Incentive Act. Eligible for 30% in tax credits.
• SBCFIA: Small Business Capital Formation Incentive Act. Eligible for 20% in tax credits, is basically a subset of RFCFIA

Our primary focus is on RFCFIA as it offers more liberal tax credits and terms of the two. Including all the same features as SBCFIA and more.

The act allows certain investors to receive tax credits up to 30% of their investment risk in new business ventures.

The abuse or fraud comes in the way some are allowed to manipulate the program and receive 200% as opposed to 20 or 30% of their investment risks. In addition several other elements providing cover up, minimizing possibilities of charges of wrong doing and avoiding the return of tax credits if wrong doing is found.

Note: The area of the law addressing the 200% limitations is ambiguous leaving it unclear, what, if anything, is in fact limited to 200%.

Answer

Note: Artificial loans are similar to a bogus, counterfiet, etc, loan

A. Artificial or fake loans are used by shuffling a paper transaction to inflate the claimed investment to nearly 7 times the actual investment allowing those involved to take tax credits valued at twice the amount of the actual investment.

One loophole is derived by allowing the taking up to 200% in tax credits and the use of borrowed money. Failure to specify what constitutes borrowed money makes it "not illegal" to use artificial loans.

Note: The area of the law addressing the 200% limitations is ambiguous leaving it unclear, what, if anything, is in fact limited to 200%.

Ref: Sections 2, 19, 20. See Using artificial loans

There is no requirement for those allowed to access the program to seek pre-approval of an investment plan to obtain the tax credits. The tax credits can be immediately sold converting to enough cash to pay the entire investment cost and pocket nearly a 100% profit. A close examination of this law only requires that 25% of the money received from public funds be invested, leaving a 150% profit.

Ref: Sections 5, 18, 19. See Only 25% required

• $330 million more within 5 months of the so called "loophole fix, in a scheme devised to misuse a grandfather clause in the new law.
• Then in September 2007, a letter surface revealing Capital West Securities was privately seeking investors to invest $300 million in a Foxborough Funding Company LLC fund. Telling potential investors they will get $2 back for every $1 invested.

For details see Known venture receiving excessive tax credits

Answer

With all information kept secret there is no way to know without transparency. And, that alone demands openness and finding answers!

The fact remains that based on the contents of this law, logic and common sense tells who would mostly likely be benefiting?

Some state officials!

• Who are obviously hiding something from the public.
• State officials maintain nothing illegal is occuring.
• There is nothing to prevent state officials from reaping $millions.
• State officials are free to have business interest, but must report those interest.
• State officials are denying the public the right to make that connection.

Others we know from published reports?

Those promoting schemes.

• Capital West Securities
• Foxborough Funding Company LLC
• Altus Venture

For more see Known ventures receiving excessive tax credits

Those using tax credits.

This we have no way of knowing as this is hidden information.

Note: Those using the tax credits are not necessarily the same as the investors reaping huge profits. Those using the tax credits could be innocent victims. Those benefiting as investors could be, and some evidence suggest are, from outside Oklahoma, and have no Oklahoma tax liabilities. Their tax credits are sold to others

The most obvious. Those protecting the scheme by turning their backs, defending and/or failing to act, and most likely benefiting.

This includes every elected officials and all state officials/employees responsible for protecting against wrong, and/or holding a position that requires the knowledge and experience to notice irregularities.

Sounds like a lot. Consider this if you divide $500 million 500 ways that would give $1 million each. Far more than the typical amount the average public employee receives from wrong doing, in all cases of fraud uncovered throughout the US.

Note: Openbooks, created by the Taxpayers Transparency Act of 2007, has been a failure. If was more than one year before the first information reported. That informations is incomplete and inaccurate!

Answer

State officials have the power to do whatever they please, as long as no one will stand up and challenge!

This is the one part of state's finances.

• That is not in the budget.
• Violates the states balanced budget act.
• Not considered and approved by lawmakers.
• Exempted from the Taxpayer Transparency Act also called Open Books.

State officials' claim hiding all information about this one program is needed to protect personal identity information. Yet Oklahoma, 49 other states and the US government are protecting personal identity information in every program where personal identity information is involved.

The justification?

The need to protect personal identity information of those involved.

Counterpoint: Oklahoma, 49 other states and the US government have always protected personal identity information while revealing the information outlined above.

Some would be hesitant to invest if their involvement could be learned.

Counterpoint: There is no evidence this issue has been a barrier to any other program in the US. Especially when the opportunity Oklahoma offers is free of risk with a guaranteed profit far exceeding any other program known to exists.

Quite the contrary. If this program, which for some unexplained reason is restricted to certain unidentified entities and individuals, were open to the typical venture investor, it would be the most sought after opportunity known to exist.

What does make sense is hiding this information hides any involvement by state officials who otherwise are free to participate and pocket $100s of millions in unearned profits while contributing nothing and risking nothing!

Answer

The most conclusive evidence can be found in reading the law. Something appearing too obvious to pull off. Until try reading the law, and you will see why.

We have not found one state lawmaker that admits to reading the entire law and willing to explain what they believe the law says. All defer to a couple of bureaucrats that respond with totally off point and diversionary answers.

Read about The Crooked Law

Known ventures receiving excessive tax credits

Read about The Crooked Law.

"Suspicious Donations"

Answer - The Capital Formation Incentive Act - 2006 Amendment

This current law, relabeled as the Capital Formation Incentive Act, is the product of a 2006 amendment (SB 1577) state lawmakers and the governor promised would put a stop to the tax credit abuse.

The results? Significant increases in tax credit abuses. The following two have surfaced.

• Another $330 million within 4 months of the new law taking effect.
• Another $300 million surfacing in a private letter leaked to the press

See Known ventures receiving excessive tax credits

Consider this was not the first time this law came out of the legislature different from what lawmakers claimed the created. It seems the money hole gets bigger with each fix! Funny how that works! The original author, Sen. Ted Fisher, saying -- "the abuses started after some unknown person "tweaked" the law, and he failed to notice.

The amendment to the law involved the ball hidden within an 86 page matrix of boiler-plate recitations of complex regulations including stock phrases that have become nonsense through endless repetition. Then it becomes like a gold miner panning miles of river bed to collect each speck of gold dust." Two of parts of the fraudster's gold are the following. Ref: Sections 2, 19, 20. See Using artificial loans (similar to a counterfiet loan)

1. Making it legal (when the claim was to make it illegal) to take tax credits on borrowed money. Thus eliminating any chance for the using borrowed money to constitute a violation.

2. Capping tax abuse at 200 percent or nearly 7 times the 30% the act is suppose to allow. This is were the diversion tactic came. Some had claimed of abuses amounting to 500%. So our governor and lawmakers were kind enough to limit abuses at 200%.

Note: The area of the law addressing the 200% limitations is ambiguous leaving it unclear, what, if anything, is in fact limited to 200%.

If you don't get the picture just yet, you are in the majority. This is a very sophisticated scam that relies on two things.

1. A fraud scheme woven into the law in a way that opens the state coffers to a select few while virtually eliminating any and all violations of state law allows stealing. It is done in the most subtle way of stripping the public of its protection against abuse.

2. Blind trust. The fraud enablers. Fraud enablers are those who do not want to be bothered with civic duties and soothe their guilt by claiming they have complete trust in the honesty, character and abilities of elected officials.

Read about The Crooked Law

Answer

It all started some years back, then evolved, through a program started under the pretense of luring investors to new Oklahoma business ventures by offering up to 30% of their investment back in tax credits. For several years remaining under the radar when the even more greedy saw more ways to exploit the law using what they call loopholes. One being artificial loans to inflate the investment. See footnote. Read more The Crooked Law

Key players during 2006 legislative action that was claimed would "fix the problem"

Kevin Calvey, chairman House Revenue Taxation Committee, and a candidate for US Congress, District 5.

Paul Doughty, president of Altus Venture, the firm behind the biggest known scheme, at the time, abusing the program. Altus Ventures is a subsidiary of FSB Bancorp Altus, which owns First State Bank, Altus, where Paul Doughty is also president, and several other venture subsidiaries. Key officials, including Paul Doughty, in some of these subsidiaries have been named as defendants in several cases suing for financial wrong doing.

See "Suspicious Donations"

The so called fix?

The fix, was introduced in the Senate as SB 1577, a bill containing roughly 30 pages, where if won approval and was sent to the house to land in the hands of Calvey.

Calvey struggling near the back of the candidate pack, suddenly received huge donations from not only Paul Doughty and other key members of the same group of subsidiaries, but many out of state members of the same investment network, mostly out of state.

The bill to change the law was in Calvey's care during the time donations were arriving and Calvey sought out Doughty to help create the language of the bill. The bill, with a 50 or so page amendment Doughty helped write, finally slipped through a conference committee and vote in the Senate,on May 25. Then the House on May 26, 2006. The closing days of the session, amid the usual flurry of last minute bills that time does not allow reading and deliberation.

* Borrowed money: Simple a paper shuffle, often called an artificial loan, were the money remains in the bank as collateral, and not used. It provides a piece of paper used to inflate the actual investment at risk and take $2 for every $1 invested in tax credits. Considered improper practice by a bank operating under public deposit guarantees. In this case the President of Altus Venture, the biggest known abuser, is also the President of First State Bank, Altus and is in a position to create the paper work, something that normally go unnoticed without an in depth audit. This has has been reported to federal banking agencies asking them to review this practice.

Answer

The claim is a typical political diversion to hide the truth, by only speaking to selective parts of the law creating the programs being abused. Those writing the law cleverly tried to insure there was nothing in the law that could be easily proven as a violation.

There are plenty other general laws that cover wrongs of this nature, including the wrongs committed by state lawmakers and the governor in creating the law.

• Conspiracy to deprive the public of honest services. (3)
• Depriving others of the intangible right of honest services.
• Fraud. (1)
• Mail fraud. (1)(2)
• Witness tampering. (1)(2)
• Money laundering. (1)(2)
• Racketeering. (1)
• Conspiracy. (1)
• Bribery. (1)
• Embezzlement.
• Paying Kickback. (2)
• Trying to prevent a witness from testifying. (2)
• Deliberate ignorance.

Charges against

Answers

1. Show us the money.

Demand our state officials at every level allow the public access. Telephone calls, letters, emails, faxes.

The sham of hiding the entire program to protect the privacy of personal identities has no merit or precedence!

All other money paid out by the state, including the lottery, reveals how much and the identities of the recipients while protecting personal privacy information.

The claims secrecy is required to attract investors is the most ridiculous yet. With the guaranteed profits offered by no other known program in the entire US, investors would make a run on the bank to have this opportunity.

2. Have state officials declare any involvement.

Have every state official, both elected and those in positions of authority, declare, by signed affidavit, if they or family members have any business interest and what that involves related to ventures receiving these tax credits.