For your Tuesday enjoyment, read the complaint filed by the State of South Dakota against SDRC, Inc., the corporation created by Joop Bollen of Aberdeen in 2008 to privatize the EB-5 visa investment recruitment and management he did then as head of the South Dakota International Business Institute:
State of South Dakota v. SDRC Inc. 32CIV15-000270
The state’s complaint addresses none of the documented legal violations Bollen committed in running South Dakota’s EB-5 program, an operation now deemed too corrupt to continue by the United States Citizenship and Immigration Service. Instead, the state goes after Bollen’s corporate shell for failing to comply with the conditions of the 2009 contract between SDRC Inc. and the state’s economic development office (as amended in 2010). Specifically, the state alleges that, in violation of its contract…
- SDRC Inc. has failed to place money into an indemnification fund that should hold hundreds of thousands of dollars.
- SDRC Inc. refuses to execute a Deposit Account Control Agreement that would allow the state to access a second indemnification fund worth at least $1,000,000.
- SDRC Inc. “refuses to provide the State access to all of SDRC Inc.’s books, records and reports.”
- SDRC Inc. has not provided money from the indemnification funds to cover the state’s expenses ($175,000 so far) in responding to federal and state subpoenas in 2013 and litigation arising from SDRC Inc.’s activities.
- SDRC Inc. maintains a website portraying itself via banner and metadata as “South Dakota Regional Center Inc.,” a false claim given that the state canceled SDRC Inc.’s contract to act in that capacity in September 2013.
The state asks the court to make SDRC Inc. fulfill its ongoing contractual obligations (which remain valid despite the state’s cancellation of SDRC Inc.’s EB-5 authority). The documents the state demands will prove particularly interesting, if the judge says yes and Bollen hasn’t shredded them already. Among the items the state wants to see:
- A list of all foreigners who applied for EB-5 visas through SDRC Inc., as well as the amounts they paid to buy their green cards.
- “All books, records, or reports from each LP [Limited Partnership] evidencing the investment or loan of immigrant investor funds to a project, to include bank statements, loan agreements, promissory notes, or other documentation of the uses of investor funds.”
- Loan documents.
- Records of receipts and expenditures.
- “Business records of any and all entitites, LPs and the like in which SDRC Inc. was involved as a general partner, partner, agent or the like which were in any way involved in the receipt or expenditure of immigrant investor funds.”
That last item could be the mother lode for those of us curious about how Bollen and associates made $167 million go poof in the ill-managed Northern Beef Packers slaughterhouse.
The summons issued Friday gives SDRC Inc. thirty days to respond. Keep an eye on the court database on November 16.
South Dakota: Land of Infinite Vainglory.
Why now?
Did Joop forget to pay someone?
Did the Feds do all the work so this is a “me too” effort?
How about the autopsy?
Pretty pitiful plaintive pleading. There is absolutely no reason why Jackoffsley didn’t subpoena and take all records into protective custody back when this first unfolded. The parties will probably strike a deal where Bollen pleads immunity,jackley pleads ineptness,and all wingnuts declare themselves insane, and Bollen agrees to pay a dollar fine,and another in restitution and doesn’t have to serve a single second in jail.
Kabuki theater. Why do I think that the only winners in this lawsuit will be Joop Bollen and the SD Republican Party?
Is there a Federal push behind this recent development ? It has not appeared that the state has been that eager to pursue this previously….
The Justice Department has put Randy Seiler on notice: do something about corruption in South Dakota or get the hell out of the way.
In answer to you question Mr Clanton, the feds are in the process of throwing SD out of the EB-5 program per the RC Journal http://rapidcityjournal.com/news/local/eb–probe-alleges-odd-connections-to-hong-kong-cyprus/article_222670a7-3791-5efc-8b24-c1334581d357.html#utm_source=%5Bdomain%5D&utm_campaign=%2Femail-updates%2Fdaily-headlines%2F&utm_medium=email&utm_content=headline
To Mike’s question, that was my first thought. Is this going to be just like the trillions of dollars of theft by the banks in 2008, when not a single banker or financial guru went to prison?
Would love to see the check ledger from SDRC. Any campaign contributions?
South Dakota-Justice delayed=Business as usual.
I wonder if this is just a diversion. 1. To give the appearance the state is concerned about corruption. 2. To insulate Jackley. Jackley had already “investigated” eb5, now more info is coming out about it possibly putting that investigation in a bad light.
Our state czars are really sensitive to these corruption claims. They all read these blogs and troll Facebook and social media. They just want to collect their checks and not get hassled like most normal people. Except that they are not.
My guess is they have had this suit written up for a while just in case.
It is all Obama’s fault. He personally knew South Dakota’s status as one of the most corrupt states and yet he didn’t order an invasion or drone strikes.
Let’s make them pay back the money that they can’t provide a legitimate paper trail for. Let’s also demand this of the SD Gear Up Scandal. Let’s start by making those who ‘acted’ as consultants PAY BACK THE MONEY THEY DIDN’T EARN. That’s stealing. Let’s see some action here.
This list looks really familiar. I think those same documents were requested awhile back along with a forensic audit. I really hate to get catty, but the state didn’t see anything wrong then, so why now?
Why now? Good question, Jeff. My operating assumption was that the state didn’t prosecute Bollen because he held information that could sink the big GOP players who made his profit-scheme possible. Attack Bollen, and he turns state’s witness.
But consider: the Darley litigation is over. Rounds is safely elected to Senate. The FBI closed its investigation. Perhaps Bollen and his secrets have less leverage now? Or maybe the state considers the harm of USCIS’s determination that we are too corrupt to run EB-5 as a greater liability than anything Bollen can do to them now?
Diversion, Rohr and Dale? Flesh that out: how would this lawsuit, going after Bollen and laying bare SDRC Inc’s books, benefit the state, the SDGOP, and/or Bollen himself?
Rorschach,
Naw..the lawyers will also win..on all sides…I see some big paychecks for them in this mess.
Corey, I appreciate your efforts….amazing how some repubs can come on here and try to blame “the feds” (aka Obama). N say well EB-5 was poorly managed everywhere.
When are they going to recognize the good ol boys system that exists in Pierre. Their votes for the values of the Republican party have resulted in some real problems in Pierre. Their intent as voters may be sincere but their selection of the representation of those values is a joke.
Stace Nelson impressed me as a real sincere gentlemen with the real republican values espoused by SD GOP. N he got 86ed by them.
I hope there are employees in this scandals that are blowing the whistle.
Buresch said we are just whining democrat’s n there are only one or two crooks involved….
Stace Nelson—interesting. If he could organize a serious cadre of voters, I’d be open to forming an anti-corruption coalition government with him. Give us one term where we set aside partisan politics and focus our efforts entirely on reforming state government to root out corruption (…and raise teacher pay? Doh! There goes the coalition! :-D )
CH, I may have missed this, but did Jackley ever make public his arrest warrant for Benda and what the exact charges were? Also, to convene the Grand Jury, what did he have to prove Benda guilty of whatever the charges were? More times than not, when the Grand Jury convenes, they have the goods to make a conviction.
Like I said, the diversion gives them the illusion of going after corruption without doing anything substantive about it. It maintains the status quo and the whole issue fades into the sunset.
SDPB-Radio Midday questioned AG Jackley about E-5 after I called in. I hope a few dozen others did too. Jackley waffled and answered a question not asked..about investigating the gun “suicide”.. He did not touch the fraud and abuse that watched $millions disappear.
will atty sveen represent joop like atty arends representing westrhuis’ corporations? sveen has likely been anticipating this.
I wonder if Senator Rounds has any thoughts on this?
I hope there is a line of people standing on the courthouse steps requesting copies of whatever information Joop relinquishes to its rightful owners, the SD people, at the earliest opportunity. In the meantime, it would be great to have Marty on the record regarding AG action should the information Joop turns over contain any indication of criminal violations.
Jeff,
Rounds is probably busy on two or three different fronts over EB-5.
First he is likely working to restore the program for Joop Bollen or some other state entity.
Second, given that EB-5 has been a national scandal for a few years now, Rounds maybe trying to stop a full congressional hearing into the program.
South Dakota’s suit against Bollen, that should have been filed a year ago, could be a requirement by Immigration Services to restore the program.
In the past couple of days, South Dakota seems to have escaped any real scrutiny by the feds to move Gear Up to the Board of Regents.
Is the state trying to do the same thing with EB-5?
Steve S- if Jackley gets the reams of papers I think it is a sure bet he goes through them and redacts any incriminating evidence before any public release. That is why I hope the feds intervene and safekeep any evidence for future prosecutions.
Jerry, check out Jackley’s draft arrest warrant for Benda here:
http://madvilletimes.com/2014/07/jackley-considered-arresting-benda-for-550k-future-fund-diversion/
Charges: Grand theft and aggravated grand theft by threat. On October 11, 2013, Jackley scheduled the grand jury to convene on October 28, 2013. Benda was found dead at that farm outside Lake Andes on October 22, 2013. The charges were based on Benda’s diversion of Future Fund Grant #1434. I don’t know if we’ve ever seen a specific evidence packet prepared for that grand jury, but it probably looks a lot like the info we’ve pieced together in this blog.
Dale, this is a lot of effort to make to create a diversion. Do they even need a diversion? Is anyone but us paying attention to EB-5? The state hasn’t been using EB-5 since canceling SDRC Inc’s contract. Our reputation in China and elsewhere has been damaged enough that we probably couldn’t get many EB-5 investors for SD projects if we tried. Why not let the feds quietly cancel our participation in the program and go back to business?
Leslie—what?! Arends representing Westerhuis?
I will be very curious to see which lawyer’s name appears at the bottom of Bollen’s response to the lawsuit. Maybe he’ll represent SDRC Inc. himself; he has experience in that area….
Okay, thanks CH. So, if this is illegal and Benda did take the money illegally, what did the state do to try to recover the money? Did they file mechanics liens on his property. attach his bank accounts? A half million is a substantial amount of loose change that they suddenly missed.
boswell, bozworth,… i am confused-sorry cory, and damn, joel…pardon me. he hopes to represent trump- thats the right idiot. now who represented MCEC? some guy in avon? i am not losing it because that happened a long time ago!
trey gowdy has wasted $4.7 million tax payer dollars trying to smear Hillary over the Bengazi deaths. The rounds/daugaard administration’s SDGOP has done the same thing with EB5 economic development money to advance the welfare of the general public of the state, smearing Benda, and covering for the Regents, NSU, AG, GOED, GOAC, rounds’s election and daugaard’s election, saying “nothing happened”.
Remember Whitewater? It was supposed to be a real estate scandal. Hundreds of millions were spent on that and they managed to find out about Monica Lewinski. And her deal occurred in the White House not in Arkansas. Imagine what they would find in South Dakota with that kind of investigative budget!
It seems that Democrats must have a “hands off” policy about South Dakota. No Federal investigation. No candidate vs. John Thune since Daschle. Nobody too tough vs. Noem. Federal money stuffed into the pockets of dead men they look the other way. This must be the plan by the blue blooded Democratic overlords in Washington DC. But then perhaps there is only one political party at that level.
Wow, if this headline from The Dakota Progressive is true, the proverbial shi- is about to hit the fan. Federal immunity to Bollen to testify???
Source: Mike Rounds talking to family about resigning US Senate
Lanny, ignore that headline. It is unsubstantiated rumor, no better than the posts at Dakota War College.
Jerry, I don’t know of any action taken by the state against Benda’s heirs.
http://www.argusleader.com/story/news/politics/2014/08/23/daugaard-considers-suing-recover-eb-money/14520157/
Who tipped Benda to the pending indictment if that’s what actually happened?
$20 says it was Jim Seward.
Corey, Jerry, and all, please remember that those documents Jackley waved around back in July of 2014 had been neither signed nor notarized: they were simply typed. Which means, of course, that they could have been written and typed up that weekend. We only have Jackley’s “word” for it that they were from before Benda’s death, and that they really were going to indict Benda.
Thanks Eve Fisher and mfi. Daugaard, one of the syndicate heads, was going to great lengths to “try” to recover part of the $550,000.00 from Benda while ignoring the $140,000,000.00 that Bollen got away with. Crook Daugaard also declares, the state spent more money hiring a private attorney as he must have felt Jackley was to inept for the job of tracking down himself. That is typical republican action on all fronts. They go after small gnats with a howitzer while letting the pampered elephants graze without danger. The readers of that article are left with the same empty bottle as what Eve Fisher describes, a waiving of the hands and told to take their word for actions they proclaim are true.
Does anybody think that the truth will be forthcoming? Millions are missing and no real effort has been made to find out where and why. That is the result of one party government!
http://madvilletimes.com/2014/07/jackley-considered-arresting-benda-for-550k-future-fund-diversion/
I have a hunch the lawsuit against Bollen is connected to this event, “State attempts to recover Benda’s $550,000” reported Aug. 23, 2014, by Bob Mercer:
PIERRE – The Governor’s Office of Economic Development is paying a private attorney to pursue the possible recovery of $550,000 that allegedly was misappropriated. The $550,000 came from a grant program in 2010 overseen by Richard Benda, a top figure in the administration of then-Gov. Mike Rounds. Criminal investigations conducted secretly last year into Benda’s activities prompted GOED Commissioner Pat Costello to hire Paul Bachand in spring 2013 to represent the state agency.
http://www.aberdeennews.com/news/local/state-attempts-to-recover-benda-s/article_55b1a723-ef93-5fc7-a483-4aba9be9acc6.html
The attempt was to quietly remove the money from Benda’s estate. What was the disposition of that effort?
Daugaard might be trying to recover money that doesn’t belong to criminally-minded individuals, but I don’t like the secrecy of all of this. As with others, I wonder what the real reason why the state is acting now rather than sweat out another investigation from the feds.
Strike that: Neil Fulton either tipped off Rich Benda or alerted Benda’s dispatchers because Fulton was interviewed by the FBI before Seward was.
http://madvilletimes.com/2014/11/bollen-rounds-chief-of-staff-involved-in-final-approval-of-sdrc-inc-2009-contract/
Recall that CIS issued a fraud alert for SDRC nearly simultaneous to Jackley’s alleged penning of Benda’s indictment.
96, I’ve heard no news on the disposition of that effort. Anyone else?
From Madville Times last July 29-In November 2013, South Dakota Attorney General Marty Jackley staked out the public position that there was no prosecutable violation of state law that justified his taking action against Northern Beef Packers, SDRC Inc., Joop Bollen, or anyone else to recover $550,000 diverted from Future Fund Grant #1434. Last January, Governor Dennis Daugaard upheld that position in an interview on SDPB Radio
I fully expect the reasons this is actionable now is the fact that the fed is taking EB-5 away from wingnuts and they don’t want to lose their gravy train. They may just be putting on a show for the feds to make it look like there is some accountability for this grift.
daugaard’s “late show” brought to you by fox news, sponsored by mike rounds.
given SDRC (South Dakota Regional Center) and SDRC, Inc. (joop’s fun wagon) are separate entities (at least i think so based on cory’s work) and that any DFP reader could know this…WHY does special asst. AG Bachand (a former SD Dep. AG in Pierre) sloppily confuse those terms on the 1st page of his complaint, subsec (3), and throughout the rest of the nine page complaint in paras 5., 6., 7. (quoting 4 pages [!!]of the actual contract’s paragraph seven a. through i.), 9., 11., 13., and finally in subparas b. and h.[SIC] of his PRAYER (last two pages)?
….pressure from his boss!!?? The complaint seeks to specifically enforce a 2009 contract in 2015 (six years later, as someone pointed out!) against SDRC Inc., or SDRC, who knows?? And nearly two years after GOED’s termination of the Contract, September 13, 2013? Just getting around to it, eh Daugaard and Jackley???
Maybe its because the contract apparently promised to provide “SDRC” books and records, NOT “SDRC, Inc.” books and records which the complaint (para. 12) hilariously, now, finally, whines “SDRC Inc. …refuses to provide”.
From this possibly sloppy privatized legal work, it is difficult to tell. Time will (tell)!! Judges understand such attention to detail.