FBI Closes Investigation of South Dakota EB-5 Program; U.S. Attorney Files No Charges

AP reports that the FBI has closed its investigation of South Dakota’s shady EB-5 program. U.S. Attorney Randy Seiler reviewed the evidence and decided not to press charges.

In my extensive review of South Dakota’s EB-5 program, I became convinced that the key players in that enterprise were engaged in illegal activity. Attorney General Marty Jackley agreed that economic development chief Richard Benda had committed crimes, but Benda died before Jackley could arrest or indict Benda. EB-5 impresario Joop Bollen absconded with state documents, profited immensely from an illegal no-bid contract that he signed with himself, concealed his activity from the state with illegal lawyering, and loaned tens of millions of dollars without paying bank franchise tax, but our state seems strangely hesitant to even tell us if it’s trying hold Bollen accountable.

We cannot know what evidence Bollen hauled away to his storm shelter or what evidence Benda took to his grave. We do know that leaders of South Dakota’s EB-5 program broke the law.

And now we know that, in the judgment of U.S. Attorney Randy Seiler, there is not enough evidence to charge any of South Dakota’s EB-5 players under federal law.


38 Responses to FBI Closes Investigation of South Dakota EB-5 Program; U.S. Attorney Files No Charges

  1. I am appalled beyond words. With this decision, I presume South Dakota will remain one of the top ten most corrupt states in the nation. Yippee.

  2. Crime and incompetence pays here in South Dakota for a certain few.

  3. Daniel Buresh

    It only makes sense. Benda was the criminal in all of this. To think Rounds would risk his entire career so he could make 500k is laughable. Feds have nothing against Bollen because he operated identical to 48 other states’ agencies. Nothing else to talk about at the federal level.

  4. Nick Nemec

    I can see where Bollen might not have violated Federal law, but to me State law should be a different matter. That is unless it’s OK for a state employee to write a lucrative contract for himself, privatizing a function of State government and greatly enriching himself while doing so.

  5. There’s a difference between “nothing wrong happened” and “we don’t have enough evidence to justify the resources we’d have to spend trying to make a case we’d have a hard time winning.”

  6. Roger Elgersma

    If we point out there is a problem then those investors(mostly foriegn) could sue and that would look bad and send money out of the country.
    Also, if many other states had a money making scam on the side so the governors buddies could make a lot of money then the very bad precident had been set. That did not make it right. The others should stop as well.
    Some day we might have ethics in government but that is not happening yet.

  7. The office of the U.S. Attorney in Sioux Falls tells me they do not and will not have comment on this investigation.

  8. “The” criminal, Daniel? Do you have any response to the state-level violations by Bollen that that I’ve laid out?

  9. It wasn’t me, but I think somebody told ya so. The Obama-led FBI and the Brandon Johnson-led US Attorney say there were no no-nos. I, for one, am not appalled as much as usual.

  10. mike from iowa

    Cafos ain’t the only stink in South Dakota. They aren’t even the worst stink in South Dakota.

  11. Wayne Pauli

    it is just another thing that disappoints me about South Dakota government. Five years left in my sentence. When the youngest grandchild graduates from high school you color me gone. But you can visit :-)… If you have a passport!

  12. Wayne,

    Passport for Canada?

  13. mike from iowa

    The party of family values is the “Jake Brakes” of South Dakota politics.

  14. Wayne Pauli

    Well Lynn, that is certainly one option but I am thinking South where the precepitation does not have to be shoveled, my pants will be shorts, and the cruise ships stop daily.

  15. Another red letter day for South Dakota. Pun intended

  16. Lawrence McBreen

    I’m surprised we know this much about these shenanigans. People like this usually cover their tracks better. I’m disappointed, but not surprised. The press and those who should have prosecuted this malfeasance should have done more.

  17. Kathy Tyler

    I’m not surprised; just sad. Thank you to all of the people who covered the issue so well and offered support to those who fought for what’s right. Someday…

  18. Nothing to see, here, folks. Just the way we do things in SD!

  19. Ms. Tyler, instead of running for office you should have done a better job of clearly explaining this to the taxpayers of South Dakota. Unfortunately, it seems you couldn’t figure out the most basic aspects of the legislatures and instead spent your time flailing at windmills made of licorice.

  20. Deb Geelsdottir

    I think M. Wyland nailed it: There’s a difference between “nothing wrong happened” and “we don’t have enough evidence to justify the resources we’d have to spend trying to make a case we’d have a hard time winning.”

    Thanks to you Kathy Tyler, for doing everything you could to bring justice to that sorry cabal running SD. Outside of government, thank you Cory, for going after this particular ugliness tooth and nail.

  21. Roger Cornelius

    Grudz,

    Kathy Tyler did a wonderful job of explaining EB-5 to the voters, all those republicans simply covered their eyes and ears and said it couldn’t be corruption because republicans are honest people.
    Remember to that Grudz’s republicans ran a direct assault on Kathy Tyler for telling the truth about Mike Rounds and company.
    Also Grudz, if President Obama could have had anything with the republican EB-5 scandal, Mike Rounds would be sitting in federal prison and not the senate.

  22. barry freed

    What does this mean regarding the FOIA?

  23. Barry, the problem with using FOIA in this case may be similar to the problem Bob Mercer had in trying to get the Benda death records: we’re talking about a criminal investigation, and such records may be protected by a higher level of confidentiality. Anyone care to file and find out?

  24. tara volesky

    Time to elect more Kathy Tylers and Lora Hubbels who have been fearless in fighting the good fight. Maybe other Legislatures will think twice about standing in silence with atrocities like this happen again.

  25. David Newquist

    I am anxious to have a FOI request filed.

    Department of Justice Guide to the Freedom of Information Act
    Exemption 7
    Introduction
    Exemption 7 of the Freedom of Information Act protects from disclosure “records
    or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information (A) could reasonably be
    expected to interfere with enforcement proceedings, (B) would deprive a person of a
    right to a fair trial or an impartial adjudication, (C) could reasonably be expected to
    constitute an unwarranted invasion of personal privacy, (D) could reasonably be
    expected to disclose the identity of a confidential source, including a State, local, or
    foreign agency or authority or any private institution which furnished information on a
    confidential basis, and, in the case of a record or information compiled by a criminal law
    enforcement authority in the course of a criminal investigation, or by an agency
    conducting a lawful national security intelligence investigation, information furnished
    by a confidential source, (E) would disclose techniques and procedures for law
    enforcement investigations or prosecutions, or would disclose guidelines for law
    enforcement investigations or prosecutions if such disclosure could reasonably be
    expected to risk circumvention of the law, or (F) could reasonably be expected to
    endanger the life or physical safety of any individual.”

  26. David, if I’m reading those exemptions right, there should be numerous documents that the FBI could release relevant to its investigation. Thus…

    ——– Original Message ——–
    Subject: South Dakota EB-5 Investigation
    Date: Tue, 02 Jun 2015 07:58:53 -0500
    From: Cory Allen Heidelberger
    Organization: Dakota Free Press
    To: foiparequest@ic.fbi.gov

    To Whom It May Concern:

    Now that the FBI has closed its investigation of South Dakota’s EB-5 visa investment program, I would like to review the documents collected and generated during this investigation. Please send me, in electronic or paper form, copies of any non-FOIA-exempt documents and and other information collected or produced by the FBI during its investigation of South Dakota’s EB-5 program, including but not limited to…

    1. The date the investigation began;
    2. Records of subpoenas issued, including names of recipients, dates issued, and information requested under those subpoenas;
    3. Information received in response to subpoenas issued (letters, state records, testimony/depositions, etc.);
    4. Names of individuals interviewed, dates and places of those interviews, notes and/or transcripts of interviews;
    5. Documentation of evidence gathered from the South Dakota Governor’s Office of Economic Development, SD Attorney General’s Office, SD Board of Regents, Northern State University, SDRC Inc., Northern Beef Packers, Dakota Provisions/Dakota Gobblers/Dakota Turkey Growers, Hyperion Resources, TransCanada and pipeline subsidiaries, and any other public agencies and private organizations that may have been included in the investigation.

    Please contact me if you require any clarification of this request. Thank you.


    Cory Allen Heidelberger
    Dakota Free Press

    Did I leave anything out?

  27. Daniel Buresh

    Bollen should be worried about the possible state level banking infractions. His acquisition of fees and payments from investors are right in line with any other regional center in this country. That is why I feel Kathy Tyler was so misleading with her analysis. Claiming the state lost money from fees they never collected. It was nothing more than fear mongering. As I said before, Bollen was in the right place at the right time and he was the only one who knew the program well and could continue running it. When the BOR wanted him out, he did what any normal person would do and began doing the same thing from the private side. This was nothing more than keeping the program going for fear of losing projects. This isn’t a big conspiracy involving Mike Rounds. This wasn’t a purposeful attempt to defraud the gov’t and make private citizens rich. This was nothing more than keeping a gov’t program going that brought foreign investor dollars to public projects within our state. Democrats tried extending it further than it would go and made it all political. Even going as far as suggesting Benda was murdered to keep quiet. You guys would have been better off pursuing an incompetence campaign against Rounds to kill the program a while back rather than pursuing any sort of criminal conspiracy. If any criminal aspect existed of what was suggested, it had little or no financial benefit to Rounds or anyone other than Bollen. It literally makes no sense for Rounds to be involved other than being able to tout successful projects. Instead, you pursed the idea that the state lost money, thereby indicating your support for the EB-5 program as long as it is fully maintained by the state. Only problem with that is 49 other states operate identically so good luck finding a crime with that.

  28. mike from iowa

    How much money from fees did the state collect for EB-5 green cards before Bollen privatized the program?

  29. Fear mongering? A guy privatizes his state job with a contract he signs with himself, and you don’t think that constitutes taking revenue from the state that legitimately belongs to the state? Did every other EB-5 outfit in the US get its revenue by that method?

  30. David Newquist

    Cory,

    I concur that under the exemptions stated, there are very few documents that would qualify for exemption. Your request seems comprehensive, but further requests are always an option, as incoming information often points to further areas to review. A potential problem is where the South Dakota investigation may overlap with the general examination of EB-5 programs launched by Sen. Grassley’s committee. Their emphasis is on national security risks gaining entrance to the USA through EB-5 visas, and documents dealing with national security have broader exemption rules.

    The EB-5 program is fraught with fraud and con games. The federal government, particularly the SEC, is very reluctant to get involved under the assumption that the crimes fall under state jurisdictions. There seems to be an attitude reflected by some of the comments here that fraud and subterfuge are the way business is done, so South Dakota is merely conforming to the larger business ethic.

    Up to this point, I find no information posted on government sites that are relevant to the EB-5 investigation.

  31. We’ll see what happens, David. Now that the investigation is over, we can at least ask. If I get a stack, I’ll invite you over to help read!

  32. mike from iowa

    Grassley couldn’t tell a security risk from a butter cow at the state fair.Like all wingnuts in power,their idea of national security is more tax breaks for the koch bros.

  33. David Newquist

    Be glad to join the perusal. There are names and connections I’d particularly like to keep an eye out for.

  34. That’s exactly the help I’d like to have, David… assuming we get any documents to peruse!

    By the way, EB-5 watcher David North notes that the portion of EB-5 that South Dakota used—investors buying green cards for $500K through regional centers like SDRC Inc—expires September 30. If a Senator with an axe to grind (like Rand Paul on the Patriot Act) could make things awkward for freshman Senator Rounds. North, who knows a thing or two about EB-5, calls Grassley an articulate critic of the program.

  35. mike from iowa

    What was the reason an independent investigator was not allowed to cover this case? One might believe avoiding obvious conflicts of interest would be worth whatever the cost of an independent inv. These guys had to know few people would believe anything conclusions partisans wingnuts came up with.

  36. No idea, Mike. Are you talking about the state or federal investigation?

  37. What do you call when a state employee is giving pay under the table by a private company? And that pay happens to be $30,000 per application. Hmmm, unlawful in 51 states!
    And if you have a difficult time understanding Kathy Tyler’s numbers, it’s obvious you are either blogging to fix Bollens PR issues or this topic is too advanced for you.
    Cory’s coverage of this issue has been pure patriotism!

  38. Correction: meant to say given, not giving.