USCIS Rejects State’s Arguments to Keep EB-5, Cites This Blog to Support Regional Center Termination

The federal government is sticking with its assessment that South Dakota state government is too corrupt to be trusted with the EB-5 visa investment program. Seth Tupper gets hold of the latest from USCIS, a July 7 Notice of Certified Termination that says the Daugaard Administration’s claims of ignorance and innocence are incredible. USCIS maintains its intent to terminate the Regional Center authorization that South Dakota received in 2004 to recruit foreign investors for economic development projects in exchange for green cards.

USCIS says South Dakota’s response to USCIS’s September 28, 2015, Notice of Intent to Terminate South Dakota’s Regional Center status “did not sufficiently address the grounds alleged in the NOIT.” In fact, USCIS says South Dakota’s response to the Notice of Intent to Terminate bolsters the case for South Dakota’s unworthiness of access to the EB-5 program. When the Governor’s Office of Economic Development claims that it can’t provide the reocrds USCIS demands due to disputes with its former EB-5 czar Joop Bollen and his EB-5 management company SDRC Inc., USCIS sees all the more proof that the state “has not maintained records, data and information on Regional Center activities sufficient to manage the center and satisfy the reporting requirements….” When GOED includes a letter from Bollen blaming participating dairies for not filing the proper forms on their EB-5 investors, USCIS concludes the state “has failed to monitor all investment activities under its sponsorship, and continues to fail, under the management of GOED” to meet Regional Center obligations.

When GOED professes ignorance of the wild offshore financial transactions SDRC Inc. conducted with EB-5 money, USCIS says “this information was public knowledge disseminated in online news sources” and explicitly cites “annotated snippets of bank statements showing the transfers” in my November 14, 2013, Madville Times blog post on the topic:

USCIS to SD GOED, "South Dakota Regional Center—Certification of Terminated Designation," 2016.07.07, p. 8.
USCIS to SD GOED, “South Dakota Regional Center—Certification of Terminated Designation,” 2016.07.07, p. 8.

In other words, USCIS trusts my blog more than they trust GOED.

USCIS dismisses Bollen’s contention that EB-5 funds don’t all have to be used for job-creating activities. USCIS says that neither the diversion of funds to a Cyprus-based Russian rail subsidiary or the convoluted dealings with and purchase of Hong Kong/British Virgin Islands-based and tax-dodging Epoch Star had anything to do with creating jobs in America. USCIS says the creation of jobs with other EB-5 funds in other South Dakota projects does not excuse diverting these funds.

USCIS rejects the state’s effort to shift blame to Bollen: “even where a regional center has hired an outside party to provide management services, the ultimate responsibility for compliance with the relevant statutes and regulations, remains with the regional center entity and cannot be transferred.” Translation: if Bollen screwed up, the state screwed up.

USCIS concludes that GOED did not properly oversee EB-5 activities when Bollen ran them, has not exercised due diligence since canning Bollen in 2013, and “has no plans for due diligence, monitoring, and oversight in the future.”

Governor Daugaard’s office has 30 days from receipt of this notice (around August 7 or 8, I would assume) to respond. Given the lack or persuasive power of its previous response, the state should perhaps just admit it screwed up and let EB-5 go.


17 Responses to USCIS Rejects State’s Arguments to Keep EB-5, Cites This Blog to Support Regional Center Termination

  1. Shut the damn program down. As long as the current administration is in office the corruption and incompetence will only continue.

  2. great work Cory! Without corruption, maybe republicans will actually have to make plans to generate real economic developement. First up, Medicaid Expansion, then rail

  3. Darin Larson

    Pat on the back for Cory!

  4. mike from iowa

    Cory for Governor! Wonder how wingnuts are gonna spin this cluster?

  5. “even where a regional center has hired an outside party to provide management services, the ultimate responsibility for compliance with the relevant statutes and regulations, remains with the regional center entity and cannot be transferred.”

    Would that the US Dept. of Education say something similar to the state over its handling of GEAR UP funds! Of course, the feds should never have awarded the GEAR UP grants in the first place, so they may be too embarrassed to make a point of it.

  6. Since the state cannot be trusted to oversee a federally authorized program, maintain records, truthfully respond to USCIS, or accept any kind of responsibility, it certainly cannot be trusted to investigate whose pockets the illegally diverted and offshored money ended up in. The federal government needs to do that too.

    Remember, before Marty Jackley took office as AG on September 4, 2009 the state already knew about the Darley lawsuit in which Bollen acted as a lawyer and filed pleadings on behalf of the state. Mr. Jackley kept this fact secret from the legislature and from the public, and never took action against the Joopster. When Benda died, Jackley blamed the dead guy and closed his investigation saying it’s up to the feds to do anything. Let’s hope they do. Looks like the feds are not buying into state government BS.

  7. Good for you Seth Tupper. Readers of The Daily Republic that think, really do miss you! Keep digging into Gear Up, the rest of Mid Central and the stolen $ millions there.

  8. Michael, yes, that principle of oversight and responsibility needs to be applied to our Department of Education. Will the feds look at the transfer of GEAR UP to the Regents and say, “Well, you screwed up badly, but you made a decent change, so we’ll let you keep applying”?

  9. Roger Cornelius

    Congratulations to Seth Tupper and Cory for this fine little gem.
    It should be particularly gratifying to you Cory knowing that high level government officials and investigators are reading Madville Times and Dakota Free Press.

  10. Donald Pay

    I just love that letter. They pulled down Daugaard’s panties and give him a whoopin’. The letter was dated July 7. I suppose the state didn’t crow about it, which is why we are only now finding out about it.

    Cory is such an asset to the great state of South Dakota.

  11. You did great, Cory. The state is still trying to deny even after you caught them years ago. These overseas financial shenanigans were not done for no reason. People with names we know ended up with a good chunk of that money the Joopster ran through the shell game. And it wasn’t just Joop that got the money. It would not surprise me if the federal government is deep into a RICO case and is asking these questions of the state in furtherance of that case – both to obtain information and to pin the state down in its positions. It would be nice to see indictments before November.

  12. Richard Schriever

    Managerial incompetence in full bloom in Pierre.
    Harvest time in the fall.

  13. I’m just a simple country boy. Off shore holding company in Cyprus?
    12 million to service debt underwritten by a lending company in the British Virgin Islands and then buying that same lending company?
    3 million in unapproved expenses?

    Why isn’t Jackley marching this thru the microscope and spotlight he holds like he does Stacy Phelps credit card payments?

    Bollen filed pleadings on behalf of the state? Geez. Nuts

    Pat Duffy always said on EB-5. …follow the money.

  14. The problems with the EB5 and why it has gone to fallow is that the marks were Asians. As the men who got all the money were white, they see no reason in pursuing interests that could lead some of them or all of them to court. If the marks were also white, there would be the kind of justice that happened in Vermont regarding the EB5. Stacy Phelps is not a white man so there is that. Jackley wants his base to know that he will not pay much attention to white crime, but if you are Native, look out for the Indian fighter. The last thing Jackley or any other law enforcement in the state wants is to bring the spotlight in on a certain senator and his lieutenant governor during that time. To do so would disrupt the corruption gravy train they all feed on. Spike, here is how real law enforcement works to protect and serve the public http://www.pri.org/stories/2016-04-21/massive-financial-scandal-unfolding-vermonts-northeast-kingdom

  15. we have all known this intuitively, since cory exposed EB5 for what it was in SD, … a republican/regents/lawyers slush fund. thinking SDGOP can shift blame to the federal government and democrats because they too use this federal program.

    I was quite disappointed that after disclosures cory made to the public, US Atty Brendan Johnson (D.) would have prosecuted during the then upcoming election. instead rounds got a plum senate seat and daugaard got to be governor again. and rounds and daugaard were primarily responsible for oversight of the $600,000,000 churning that was going on. Instead they let Joop run of with their RECORDS. Regents let $500,000 attys fees get churned up at taxpayer expense to repair Joop’s misdeeds. As said they, law enforcement, Tidemann and GOAC and GOED were satisfied to let the dead guy take the bklame. They, and SDDOE, are doing it again at Platte, … 5 murdered and another suicide to cover financial responsibilities to state republican administration. Hundreds of millions of dollars and lives and education of young people threatened. Do nothing Daugaard

    cory, these guys are lucky you haven’t decided to go after them.

  16. Congrats Cory! Can we now go after Rounds for his involvement?

  17. Paladn, given how long it’s taking the state to prosecute Joop Bollen, the EB-5 scandal will probably still be hot when Rounds runs for re-election in 2020.