Bob Mercer did fine work over the weekend summarizing the main findings in the 18-page letter USCIS sent the Governor’s Office of Economic Development on September 28, 2015, informing GOED that South Dakota is too corrupt to keep the Regional Center designation necessary to continue participating in the EB-5 visa investment program.
Now you can read that letter yourself.
USCIS says we can’t have an EB-5 Regional Center anymore because the state—not just self-privatized EB-5 czar Joop Bollen, but the Governor’s Office of Economic Development as well—”provided inaccurate or incomplete information to USCIS on its annual Form I-924A filings for fiscal years 2010, 2011, 2012, 2013 and 2014″ [USCIS to SD GOED, “Notice of Intent to Terminate,” 2015.09.28, p. 6]. Joop Bollen would have filed the reports for 2010–2012; after the state canceled Bollen’s EB-5 contract in September 2013, completing the 2013 and 2014 reports fell on GOED’s Hunter Roberts.
Perhaps more importantly, USCIS says South Dakota lacks credibility to use EB-5 visa investment for its intended purpose of creating jobs. USCIS says that Bollen and his GOED/NBP comrade Richard Benda diverted EB-5 investment dollars to expenses that had nothing to do with creating jobs or fulfilling any part of any business plan filed for the business supported by these foreign investments. USCIS lists several draw requests made by Bollen and Benda in 2011 and 2012 from funds designated for Northern Beef Packers:
- $550,000 SDCI Summary Judgment Settlement Payment
- $70,000 Young Family Settlement payment
- $150,000 Blake Witkin S/T Loan [what?! Blake Witkin, Canadian angel investor? Nah, couldn’t be….]
- $1,390,000 Loan repayment to Song…
- $727,000 Agent fees
- $52,000 Korean Meal Expenses and Housing Expenses (from 7/31/2012–8/22/2012), this was listed under “plant operating costs”
- $43,000 Korean Labor, listed under “construction hard costs”
- $200,000 SDRC legal costs [USCIS to SD GOED, 2015.09.28, p. 11]
USCIS concludes that “This diversion of EB-5 funds away from job creating purposes casts considerable doubt on the Regional Center’s ability to promote economic growth.”
USCIS finds further evidence of this untrustworthy and EB-5 violative diversion of funds in Northern Beef Packers’ inexplicable transfer of money to Cyprus-based Ultracare Holdings Limited. Recall my November 14, 2013 report:
During the first year of construction, Northern Beef Packers made at least three wire transfers to an offshore account held by Ultracare Holdings Inc. at P.O. Box 957, Offshore Incorporations Centre Road, Tortole, British Virgin Islands. NBP bank statements list what looks like a $504,350 wire transfer to Ultracare in December, 2007; $308,500 on January 4, 2008; and $687,225* on April 21, 2008.
Ultracare Holdings Limited is based in Cyprus. It is a subsidiary of Globaltrans Investment Inc., a freight rail company in Russia [CAH, “Northern Beef Packers Dealt with Russian Rail Offshore Subsidiary in 2007-2008,” Madville Times, 2013.11.14].
USCIS disagrees with my reading of the third bank statement, contending the April 2008 transfer was $887K, not $687K. But USCIS agrees with me that investing in an offshore branch of a Russian rail company has darn little to do with creating jobs in an Aberdeen beef plant:
It is unclear from the evidence presented to USCIS, including the business plan, how Russian rail transportation, railcar leasing and the repair and maintenance of rolling stock relates to the NBP, LP state business plan of constructing and operations a meat packing plant, and the promote of economic growth within the Regional Center’s geographic area. Rather it appears that Northern Beef Packers used EB-5 funds to invest in a holding company which was a deviation from the business plan and diverted EB-5 funds away from job creation The diversion of EB-5 funds by an NCE [New Commercial Enterprise] sponsored by the Regional Center casts considerable doubt on the Regional Center’s ability to promote economic growth [USCIS to SD GOED, 2015.09.28, p. 12].
More details in the letter support what the above items lay out quite clearly: Joop Bollen, Richard Benda, and the Governor’s Office of Economic Development broke the rules of EB-5. They didn’t file accurate reports, and they used money in ways it was not supposed to be used. South Dakota now gets a grave black eye as the only state in the Union banished from participating in EB-5 visa investment.