Senate panel advances anti-smoking bill with tax break

Journal Record, The (Oklahoma City), Feb 15, 2002

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Questions about Nuvest

A Tulsa couple and a Chicago-based accounting firm tricked the parent company of Oklahoma's second-largest utility into buying shares of a limited liability company that wasn't making money, several lawsuits allege.

CSW Energy Services purchased more than 1 million units of Nuvest LLC in November 1999 for $18 million based on false financial statements, American Electric Power Co. Inc., alleged in a lawsuit filed in Tulsa County District Court.

Richard H. and M. Monika Smith, officers of Nuvest and its subsidiaries, deliberately distorted the data, AEP alleged. AEP is the parent company of Tulsa-based CSW Energy and Public Service Co. of Oklahoma.

Financial reports provided by the Smiths showed the company had $10.6 million in earnings from 1996 through 1999. But AEP officials said their review of Nuvest's books and transactions shortly after the company's acquisition in June 2000 showed that Nuvest lost $25.4 million during that period.

AEP, based in Columbus, Ohio, sued the Smiths for $18 million "for fraudulently causing the purchase of securities." Another lawsuit seeks $20 million from Arthur Andersen, the accounting firm that audited Nuvest's finances.

In a 1999 report, Arthur Andersen said no "material misstatements" were found in the financial statements of Nuvest or its subsidiaries.

Because of that report and the profits Nuvest was reportedly making, CSW Energy and PSO "provided substantial capital, paid off substantial debt and executed various loan guarantees" for Nuvest companies, court records show.

Initially, PSO owned 70 percent of Nuvest, which was established in 1996 to acquire and operate non-regulated energy companies. Monika Smith owned 30 percent of the company and her husband managed it.

CSW Energy Services, a unit of former PSO parent Central & South West Corp., bought more than 1 million units of Nuvest in 1999. AEP acquired Central & South West Corp. in June 2000 and ownership of CSW, PSO and Nuvest Cos. transferred to it.

The company's complaint against the Smiths has been stayed, pending an outcome of a similar lawsuit against the Smiths in Louisiana, where AEP is suing them over similar claims, an AEP spokesman said.

Dollar Tree picks Marietta

Teamwork paid off Thursday for two southern Oklahoma development authorities trying to lure a Virginia-based store's distribution center to the region.

Dollar Tree Stores announced it would locate a Southwest Regional Distribution Center in Marietta, bringing 125 jobs with it. Construction on a 603,000-square-foot building at the intersection of Interstate 35 and Oklahoma Highway 32 will begin in March, with operations scheduled to start in early 2003.

Stephen White, Dollar Tree senior vice president for logistics, said his firm selected Marietta as the center site because it is close to major population centers in Oklahoma and Texas and has easy access to I-35. Dollar Tree Stores originally surveyed more than a dozen sites in Oklahoma and Texas. The Marietta center will initially serve Dollar Tree Stores in Texas, Oklahoma, Louisiana and Kansas. Dollar Tree Stores nearest the center are in Ada, Duncan and Norman in Oklahoma and in Denton, Texas.