On November 20, 2013, I reported that Joop Bollen had run an unlicensed bank and dodged the bank franchise tax in the course of South Dakota’s EB-5 visa investment program.
On September 9, 2014, Brown County Commissioner Tom Fischbach persuaded his fellow commissioners to formally request that the South Dakota Division of Banking investigate the possibility that Bollen’s SDRC Inc. had committed exactly those crimes, defrauding Brown County of $1.76 million.
Today, AP reports that, after an unusually lengthy investigation, the South Dakota Division of Banking received a lending license application from Joop Bollen and agreed that SDRC Inc. needs to carry such a license and pay such bank franchise tax.
But the Division of Banking has kicked the question of what Bollen owes for his SDRC Inc. activities from 2008 to the middle of this month up to the Department of Revenue:
The Revenue Department received notice of the license last week and will collect the tax moving forward. It will also determine whether it can assess and collect taxes from before the license was issued, Jason Evans, property and special taxes deputy director, told The Associated Press.
“From a department perspective, we’re interested in collecting all those taxes that are duly owed to the state and the department,” Evans said, noting that no taxes have been collected yet.
It’s unclear what the firm’s tax burden is moving forward. It’s also not certain how much money is at stake if the department decides to collect potential back taxes, but it will begin examining the issue very soon, he said.
“It’s not something that happens very often,” Evans said. “We don’t very regularly have to collect taxes from prior years” [James Nord, “State Regulators Determine EB-5 Loan Firm Must Pay Bank Tax,” AP, 2015.03.29].
I would love to learn what lending activities Bollen is engaging in now via SDRC Inc. that warrant his finally applying for a lending license. But his activities prior to obtaining a license were clearly lending. SDRC Inc. acted as a bank without a license and collected interest on loans without paying bank franchise tax. Those are two clear, non-trivial crimes committed by a live suspect, right here in Aberdeen, that our state is strangely hesitant to prosecute.