Bollen Says Blame Everyone Else!
Once the 35 Chinese investors suing South Dakota and Joop Bollen for EB-5 visa investment trickery get their lawyer situation straightened out, their attorney’s will face some hard arguments from the state about why the court should even hear the plaintiffs’ case. In a motion to dismiss filed January 6, 2016, in Case #32CIV15-000312, the state says the LP6 Claimants have no case due to South Dakota’s sovereign immunity, the LP6 Claimants’ failure to properly notify the state of this lawsuit, and the expiration of a one-year statute of limitations. Former EB-5 czar and co-defendant Bollen coattails with the state’s arguments, demands that the state pay for his defense, and blames his old partners James Park and Richard Benda for any deceit.
The state (that’s us, remember) contends that the EB-5 investors who lost their shirts (well, their extra socks—folks who can buy green cards aren’t hurting for money) can’t sue South Dakota. Article 3, Section 27 of the South Dakota Constitution says that only Legislative action can waive the state’s immunity to law suits. The Legislature has never waived the sovereign immunity of the Governor’s Office of Economic Development, the Department of Tourism, or the department from which those two entities emerged and which ran EB-5 at the time of the EB-5 deception alleged by the LP6 Claimants. Thus, the Chinese investors can’t sue the state, unless they can demonstrate that the state violated either its own constitution or the United States Constitution.
Now the state does recognize that it can be sued—that’s why Chapter 3-22 creates a liability coverage program for public entities. But even if the court decides that sovereign immunity does not get South Dakota out of Dutch with the Chinese, South Dakota contends that the Chinese didn’t file proper notice ot launch the lawsuit. Check out SDCL 3-21-2:
3-21-2. Notice prerequisite to action for damages–Time limit. No action for the recovery of damages for personal injury, property damage, error, or omission or death caused by a public entity or its employees may be maintained against the public entity or its employees unless written notice of the time, place, and cause of the injury is given to the public entity as provided by this chapter within one hundred eighty days after the injury. Nothing in this chapter tolls or extends any applicable limitation on the time for commencing an action [South Dakota Codified Law 3-21-2, amended 2007].
The plaintiffs allege injury between late 2009 and mid-2013. The defendants claim the state (specifically, the Attorney General and the commissioner of administration) has received no statutory notice of said injury.
Finally, the state says the plaintiffs waited too long. SDCL 21-32-2 sets the statute of limitations “on any claim on contract or tort against the state” at one year. The plaintiffs claim fraud. SDCL 15-2-3 says the clock starts ticking on a fraud case from the time that the aggrieved parties discover they’ve been defrauded. The state points to the Chinese investors’ filings as pegging their awareness of fraud to July 2013, when Northern Beef Packers declared bankruptcy. Their deadline to sue the state for fraud, says South Dakota, was July 2014 (right in the middle of Mike Rounds’s Senate campaign! Oh, what could have been!). The LP6 Claimants filed their suit on December 2, 2015.
Joop Bollen’s response to the plaintiffs’ complaint, filed January 8, 2016, is more of a mishmash, with allegations that the plaintiffs aren’t the real parties in interest, that the investors agreed to indemnify the defendants, and that he and his corporate alias-web went above and beyond their duties to help the investors get their green cards. Things get fun when Bollen claims that his status as a state employee entitles him to immunity and obliges us to pay for his defense, even for claims arising after he left state employment six years ago:
Bollen’s counterclaim stakes out a back-up position: if anyone did anything wrong, Bollen says his fault is “passive or secondary compared to the active primary fault of the Crossclaim State Defendants,” entitling him to complete indemnification from the state. Translation: Joop Bollen will have none of the state treating him the way the state treated its current fall guy, the deceased Richard Benda.
Ah, speaking of Bollen’s old partner, loan monitor, and travel buddy Benda:
Translation: if everything goes south, Bollen is ready to blame his old pal Richard Benda and the Korean lawyer buddy who helped save the original EB-5 pitchers from jail and then helped make a mess of Northern Beef Packers, James Park, for writing the allegedly fraudulent pitches on which the Chinese investors base their case.
Last I checked, the Chinese investors had not filed responses, and the state had not filed a response to Bollen’s counterclaim.