Plus: Jackley’s Post-Plea Press Conference!
Joop Bollen pled guilty this morning to one of five felony charges of mishandling funds related to his administration of South Dakota’s EB-5 program. Judge Portra gave Bollen a suspended imposition of sentence with two years of probation, a $2,000 fine, $104 in court costs.
Six days before Bollen’s scheduled trial, Attorney General Marty Jackley appeared in the Brown County courtroom of Judge Tony Portra to read a plea agreement freshly signed by the state and Bollen. In the plea agreement, Bollen admits that, on February 17, 2012, he took $300,000 from a fund that his corporation SDRC Inc. was supposed to hold to indemnify the state in case of lawsuits arising from the EB-5 visa investment program. Bollen purchased Tax Increment Finance bonds on Northern Beef Packers, the beef plant that EB-5 investment helped build on the south edge of Aberdeen. By taking that money, Bollen violated SDCL 44-1-12, a Class 6 felony. Judge Portra asked Bollen if he agreed the Attorney General’s statement; Bollen answered, “Yes, Your Honor.”
Under the plea agreement, the state dropped the other four charges, which included $944,000 in unauthorized withdrawals from funds Bollen/SDRC Inc. were supposed to hold for the state, money that Bollen allegedly converted to personal use. Those other funds and uses were not mentioned in today’s hearing. The state also agreed not to pursue any further charges against Bollen on this matter, to remain silent on sentencing, and not to use this plea against Bollen in pending civil litigation. In addition to his plea today, Bollen agrees to testify fully future proceedings.
Judge Portra asked Bollen a series of questions about his understanding of the plea agreement and his rights. Bollen answered, subdued but sure, “Yes, Your Honor… I do… I have… I am.” Judge Portra asked if Bollen had received any other promises to secure his plea. After a brief querying glance at his attorney, Reed Rasmussen, Bollen said, “No, sir.” Any force, need more time—“No… No, Your Honor.”
What is your plea—“Guilty.”
The defense waived Bollen’s right to pre-sentencing hearing and asked the court to render sentence immediately. Judge Portra asked the state for comment. Attorney General Jackley reiterated the position stated in the plea agreement, that the state would leave sentencing to the court. A.G. Jackley did note that the Legislature has dictated, per the 2013 criminal justice reform bill, that defendants in Class 6 felony cases like this should receive probation, not prison, and that he knew of no aggravating factors to override that presumption of probation. A.G. Jackley also noted that the defendant’s plea had averted the need for a trial.
Rasmussen acknowledged that Bollen had taken the $300,000 and, perhaps extraneously to the charge at hand, had violated his contract with the state to have $1,000,000 in that indemnification fund by the end of December 2011. Still, Rasmussen said, Bollen returned the $300,000 to the bank account within four days of the illegal withdrawal. The only victim of the crime was the state, and no money (including $2.5 million in state money still held in SDRC Inc. accounts) is missing.
Rasmussen recited the benefits of the EB-5 program that Bollen ran for the state: $400 million in foreign investment brought to South Dakota, creating over 5,000 jobs (a variation of the disputed claims former Governor, then candidate, now Senator Mike Rounds made during the 2014 campaign to defend his approval of Bollen’s operation of EB-5 in South Dakota).
Rasmussen said Bollen has already been punished with three years of the media dragging his name through the mud. “I don’t do blogs or Facebook or whatever,” said Rasmussen, but he has heard there are some terrible things out there.
Given Bollen’s lack of criminal record and good conduct since his arrest (he traveled to Europe while on bond), Rasmussen asked for suspended imposition of sentence with little or no probation.
Asked by Judge Portra if he wished to address the court, Bollen said, “I’m fine, thank you.”
Judge Portra said he found Bollen “eligible and a good candidate” for suspended imposition of sentence. Judge Portra said he has given suspended imposition to offenders with “much lesser prospects for rehabilitation.”
Alluding to the defense’s statement about media mud-dragging, Judge Portra said he was choosing his sentence in part to make clear that this case is “far less juicy and salacious” than is otherwise believed. “Benda” and “EB-5” get a lot of press, said Judge Portra, but this crime and this plea are not about Benda or EB-5.
Judge Portra also noted this morning’s local headline story that the Brown County Jail, built for 48 inmates, in holding 72.
Judge Portra thus declared jail not appropriate. Bollen could have faced two years in prison and a $4,000 fine. Instead, Bollen pays $2,104 and walks home mostly free. Judge Portra imposed two years probation, but without any restriction on drinking alcohol. Judge Portra imposed no travel restriction but noted that Bollen will need to check with the probation officer about limits on travel that may be imposed by the interstate compact on probation rules that South Dakota observes.
Court adjourned. Bollen left, making no comment to the press (even though I asked nicely).
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Attorney General Marty Jackley held a press conference following the hearing (see full video from Aberdeen American News on Facebook). One theme that emerged from his statements to the assembled journalists was that A.G. Jackley views today’s plea deal as an achievement distinguishing his office from federla investigators. He noted that the Department of Justice, FBI, and U.S. Attorney had all failed to find anything in South Dakota’s EB-5 program on which to bring charges. Only his office has brought pursued indictments against EB-5 players—first Richard Benda in 2013, an arrest and prosecution averted by Benda’s untimely death; and now Bollen. Jackley said that contrast shows that the feds have failed to exercise due oversight over EB-5 and that it is up to state authorities to fill the gap with measures like his proposed conflict-of-interest measure, Senate Bill 27 (which would not appear to pertain to the activities for which he prosecuted Bollen, but hey, Jackley is also campaigning on a couple of fronts, so cut him some slack).
A.G. Jackley used this assertion of the superior performance of his office over the feds to avoid my question about whether this investigation has led him to findings or actions against any accomplices, like Bollen’s Georgia business partner Pyush Patel. A.G. Jackley gave no indication that other participants in Bollen’s mishandling of funds have been identified or investigated.
The Attorney General did not mention the oversight USCIS exercised by revoking South Dakota’s authorization to participate in the EB-5 program. When I asked whether today’s plea would help the state make the case to USCIS to reinstate South Dakota’s EB-5 status, A.G. Jackley said that’s a question for the Governor and his Office of Economic Development. He did acknowledge the positive economic impact EB-5 had on several communities.
I asked why the state had chosen to leave the indemnification funds in private accounts that an operator like Bollen could so easily access. A.G. Jackley said he did not advise the Governor’s Office of Economic Development on the December 2009 contract it signed with Bollen to run EB-5 privately and create the indemnification funds. He said such funds are a “common legal practice” and that the state doesn’t “own” the money but has a security interest in it, but he did not draft these indemnification funds.
I asked whether other private entities are holding indemnification funds for the state and whether the discovery of Bollen’s mishandling of secured funds had prompted a review of other funds to make sure no one else was turning such funds into personal ATMs. A.G. Jackley mentioned no other such investigations and said that question should go to the Legislature and the Governor.
I asked A.G. Jackley if the requirement that Bollen “cooperate and testify truthfully” differs at all from the obligation an un-pled Bollen would have had to respond to a subpoena and testify in EB-5 matters. A.G. Jackley said “If there are any future proceedings” (again, no indication of anything in the pipeline), and if Bollen failed to testify truthfully, that action could revoke the plea agreement and subject Bollen to trial. But playing nice, A.G. Jackley said he anticipates no problems with Bollen’s complying with the agreement he signed.