GOED Blaming Bollen; Begging USCIS Not to Kick South Dakota out of EB-5

Senator Mike Rounds may be afraid to lobby to save South Dakota’s access to the EB-5 visa investment program that went corrupt on his watch, but the State of South Dakota is fighting to keep EB-5 alive here. The Governor’s Office of Economic Development has responded to USCIS’s Notice of Intent to Terminate the Regional Center status that allows us to recruit EB-5 immigrant investors with 113 pages of argument and exhibits, the central claim of which is, “We didn’t screw up: Joop Bollen did!”

Among the key points in the state’s October 29, 2015, response to USCIS:

1. GOED has hired Tennessee lawyer Robert C. Divine to navigate South Dakota to EB-5 salvation. President George W. Bush appointed Divine chief counsel for USCIS from July 2004 to November 2006; Divine briefly served as USCIS Acting Director. He is also vice-president of EB-5 Regional Center “industry trade association” IIUSA. Remember, EB-5 isn’t just an immigration program; it’s big business.

2. The state has filed two lawsuits against Joop Bollen this year. On January 16, 2015, the state engaged Pierre attorney Tim Engel to file suit against SDRC Inc., the corporation Bollen formed in January 2008 to privatize his state job, to recover $521,338.91 in legal costs incurred defending the state from the Darley lawsuit that Bollen caused and concealed from the state. The January complaint says that SDRC Inc. didn’t pay one cent to help the state litigate Darley. The state tried for nine months to negotiate a settlement with Bollen and his Aberdeen lawyer, Jeffrey T. Sveen. On October 13, the state gave up:

Tim Engel to Jeff Sveen, 2015.10.13
Tim Engel to Jeff Sveen, 2015.10.13

The state filed its second lawsuit against Bollen’s SDRC Inc. on October 16, expanding its claim to demand EB-5-related documents along with the disputed legal fees.

3. The Daugaard Administration has not forsaken EB-5 investment. South Dakota wants to get back in the EB-5 game. However, since canceling SDRC Inc.’s contract to run EB-5 in September 2013, GOED contends to USCIS that it “has focused its resources on resolving issues arising from prior activity and SDRC’s Inc.’s [sic] administration of the regional center.” In other words, the state’s official position is that it has to clean up Joop Bollen’s mess before it resume recruiting EB-5 investors.

4. GOED claims that some of USCIS’s findings on diversion of EB-5 money to non-job-creating activities is news to GOED. Consider GOED’s response to USCIS’s finding that EB-5 money was diverted to Ultracare Holdings, a Cyprus-based entity owned by a Russian rail company:

Aaron P. Schiebe, GOED, to USCIS, 2015.10.28, p.5
Aaron P. Schiebe, GOED, to USCIS, 2015.10.28, p.5
Aaron P. Schiebe, GOED, to USCIS, 2015.10.28, p.6
Aaron P. Schiebe, GOED, to USCIS, 2015.10.28, p.6

GOED’s claim here is bogus: the strange transfers of cash from Northern Beef Packers to offshore accounts in 2007 and 2008 received press attention on November 14, 2013. It is also important to note that those offshore transfers occurred not only prior to the termination of SDRC Inc’s contract with GOED but prior to the existence of that contract, which was not inked until December 22, 2009.

5. GOED is willing to blow smoke for the other major unexplained diversion of EB-5 funds, the mysterious Epoch Star bridge loan. GOED frowns on the Ultracare offshore transfer, but it offers this game defense of the $30 million dollar loan that USCIS cited as another example of EB-5 money used for something other than job creation:

Schiebe/GOED to USCIS, 2015.10.28, p. 6, on Epoch Star
Schiebe/GOED to USCIS, 2015.10.28, p. 6, on Epoch Star

Recall the convolutions here: Doomed EB-5 project Northern Beef Packers signed for a $30 million loan in 2010 from Hong-Kong-based Epoch Star, a small group of investors who insisted they were not a bank to avoid South Dakota banking regulations. NBP took out less than $3 million in principal, paid more than that to Epoch Star and Maverick Spade in interest and fees, then bought Epoch Star a few months later. USCIS doesn’t think the Epoch Star loan was about job creation. I think it was about moving money into some lucky pals’ pockets.

6. GOED contends that terminating South Dakota’s Regional Center status will hurt the EB-5 program nationwide. If USCIS terminates our Regional Center, 274 EB-5 investors stand to lose their visa. Writes GOED’s Aaron Schiebe:

Terminating the South Dakota Regional Center and the resulting denials would in fact scare investors away from all regional center investments under the program nationwide for fear that some unrelated misdeeds of the regional center entity or its contracted manager could result in denial of all the immigration benefits of all investors sponsored by the center [Schiebe/GOED to USCIS, 2015.10.28, p. 8].

Translation: if EB-5 Regional Centers behave corruptly, you don’t dare hold them accountable in any public fashion, because you’ll scare away investors.

7. The state’s October lawsuit did get Bollen to wipe from his SDRC Inc. website the text and images that USCIS said gave the impression that SDRC Inc. was still authorized to do EB-5 business for South Dakota. GOED demanded such a wipe back in September 2014. SDRC Inc. responded to that demand with an e-mail suggesting that, remarkably, SDRC still had staff:

SDRC Inc. Mary Haar to GOED attorney Tim Engel, 2014.09.08
SDRC Inc. Mary Haar to GOED attorney Tim Engel, 2014.09.08

SDRC Inc. isn’t working for the state any more, but apparently they were doing enough business to have an accountant/office manager and an “IT person.”

South Dakota is begging USCIS for more time and a second chance. The state insists that it is USCIS’s friend and that Bollen is the recalcitrant perp. Bollen responds vigorously via Sveen to the state’s charges; evidently he and Bollen are as ready to pile all blame back on the state as the state is to place all blame on Bollen. You can read Sveen’s responses and exhibits in the second half of the document sent by GOED to USCIS; I’ll have my summary of Bollen’s defense in a subsequent post!


68 Responses to GOED Blaming Bollen; Begging USCIS Not to Kick South Dakota out of EB-5

  1. Keep it alive so some other greedy SOB can siphon a bunch of money out of it.

  2. It’s not over till it’s determined how much EB-5 money found its way into Rounds family pockets, and why GOP state officials covered up for Mike Rounds.

  3. Cory, have you seen ol’ Joop around Aberdeen? You should at least ask him if he wants to sit down for an interview. You could grab a few photo shots of his refusal.

  4. How can GOED now blame everything on Joop when I thought it was all Benda’s fault and Benda worked for GOED?

  5. Dr. Math, stop that line of thinking this instant. You know perfectly well that future governor Jackley had the goods on Benda, he even waived a blank paper for all to see that he had his man. By suggesting what you are suggesting, I think it implies that Benda was innocent all along and that his family should sue Jackley for millions in a wrongful death case. Joop better stay out of the shelter belts and cornfields and stay in an undisclosed location until hunting season is over.

  6. mike from iowa

    The state’s claim they never had access to records is only because the state never tried to get the damn things to begin with. Bollen absconded with them and the state did nothing to get them back. They probably hoped Bollen would shred them all.

    Another thing,Bollen must be dead if the state is blaming this whole mess on him.

  7. owen reitzel

    Jenny brings up a good point Cory. Try and get an interview with Joop (maybe you’ve already tried).
    My guess he doesn’t trust the normal media and maybe he’d trust you. You aren’t necessarily on his side but you’ve proven you aren’t on the state’s side as well. You’d give a fair interview.

  8. If the State wants to re-establish its credibility as having effective ability to root out wrongdoing by contractors and provide effective oversight to the EB-5 projects, then a good beginning would be to launch grand jury and State Bar investigations. The first question to be asked is how the attorney for SDRC, Inc., which is illegally diverting investor funds from their intended purpose, can also be in control of another entity (Dakota Provisions) which receives funds from SDRC, Inc. on excessively favorable terms and still not violate the law or ethical rules.

  9. 90 Schilling

    Amen, Sid. Lawsuit from the state for a pittance is a crock when you’re dealing with 500Mil and other players that allowed this to happen.

  10. tom barnett jr. is bar assn director-seigel barnett is sveen’s firm. both web sites are down

  11. joop will never talk. lawyered up. cory and other sd news reporters are to be congratulated for finally cracking this thing open. it leads to the top and rounds is going to spend lots of money to avoid accountability. daugaard will just do what chris christie did, the state will pay to defend him.

  12. we need to ferret out every republican who obstructed investigation, starting with tidemann. banking commission actions have been very suspect. NSU, Regents, AG lawyers who kept it all on the down low need to be held accountable. jackley of course needs to be questioned. how is sd going to manage this huge effort v. daugaard’s goed lawyers (who are they?) which already managed to put a 100 page response together in 2 weeks. lawyer horsepower in the state of sd, brought to you by the 99%. expensive!!

  13. cory’s para 4 (“bogus”) reminds me of round’s pre-election responses to dem. questions that were so impertinent. when republicans cover-up and make all the information inaccessible to public reveiw, people like parter lansing get to berate dems for failing to penetrate the republican scam.

  14. devine’s plea for fairness and cry that this is the first time goed knew of inconsistencies is pathetic.

  15. saying goec is agressive is like saying state auditors committee (goac?) was thorough before the election.

  16. hilarious. devine says goed manages the regional center. goed let joop take all the regional center documents for himself!!

  17. where the f**k is idiot boswell and who pays him?

  18. who is aaron scheib and who hired him and when, and how much is he getting paid to carry daugaard’s water? fairness-boohoo! equity requires clean hands, why doesn’t daugaard cowboy up. chicken sheit! sdgop chicken sheits. talk about wasting an entire state’s population’s time. kinda fits with jackson county voter suppression, chamberlaine, daugaard’s rejection of reconciliation obstructing harney name change, school board racism. yahdahyahdah.

  19. Who are the members of GOAC? How on earth can’t these people be impeached or at least own up to their ineptness.

    One would think they would have the decency to individually step up and why they botched their jobs so badly.

  20. What’s the record for consecutive comments on this site by one person?

  21. Clearly Ms. leslie was drunk earlier than usual today.

  22. Roger Cornelius

    Curt, I don’t know the record for the most comments by one person, the problem I have his comprehending them.
    Are those comments intentionally full of grammar abuses?

  23. you and your party can’t stand the heat so you a) use humor-doubtful or, b) suggest someone who has lost a son by suicide to addiction and has been sober since ’89 is drunk? more likely.

    the consecutive posts is my simple short hand way to document cory’s intense, document rich, investigative work nearly single handedly taking down a sitting governor and senator of the republican persuasion. consecutive or not, i have been pushing cory and this blog since i awakened to the damage the republicans have done to the state. not that cory needed it, but the rest of the state fell asleep and people like me were pegged with being EB5 obsessive. Classic spencer the science guy, our future in young republican nearsighted educator that he is… amuses me the most.

    grudz is so cute, eh? gremlin!

  24. I, for one, think it would be wonderful if the Governor and Mr. H were in negotiations today to put Mr. H to work overseeing a new E-B5 green card center. It would keep such a thing working, if we need it, and would put a libbie fellow in charge and he could even blog about it all to quell all the rumors and mongering and such. I hope this negotiating is going on right now and if not it would be nice of Mr. H were made Secretary of the Press.

  25. I’ll second that, Grudzie. (oh, yeah, how ’bout that Teddy Bridgewater and Stefon Diggs duo? Go Vikes! Always a good day when my boys win!)

  26. The goed had to go out of state to lawyer up for this. As far as I can determine, it is just South Dakota that got into the corruption mess, what does Tennessee bring to the table? Must be connected in some way of course, the money trail never ends with these South Dakota corrupted republican officials.

  27. Roger Cornelius

    Didn’t Daugaard say earlier last week that he would not fight the USCIS over the EB-5 suspension?

    If so, why did he change his mind?

  28. I think your right Roger, I also think that we should not get another drink at the well until all of this mess is completely cleared up. We now have an innocent dead guy, by there own words of saying that Joop is the culprit), along with investors who were cheated out of their investments from a banking industry that was illegal in all of its makings. I would think that the uscis would be smart to investigate this pronto. Hello US Attorney, where da hell are ya? Put up those donuts and stop drinking the beers, time to act like you are representing the people and earn your keep.

  29. What I would like to see is Marty Jackley’s grand jury request on why they wanted to haul in Benda. I could see a small claims court charge for the double billing, but that does not take a grand jury. Come out come out wherever you are Marty, stand and deliver.

  30. Bob Newland

    Does “any and all prior offers of settlement” confer a greater finality than “any prior offers” or “all prior offers.”

    That bugs me nearly as much as SDPB’s continuous reiteration of the phrase “each and every day.”

  31. Craig & Ronette Guymon

    Where does the “Buck Stop” in SD’s executive branch? Who is making the final SD executive branch decisions? Who is launching the final SD executive branch actions? Is a pack of lawyers calling all the shots?

    In response to the Sept 28, 2015 notice to GOED of USCIS intentions to dropkick South Dakota from continuing to be an approved EB-5 regional center if GOED chose not to respond with rebuttal evidence within 30-days, WNAX Radio broadcast an interview in which Gov Du Gard:

    1. Berated the Investment-For-Visa Program as having no real economic value for South Dakota due to being a high risk business venture capital source.

    2. Dennis claimed there was more than adequate venture capital already available in SD.

    3. During the remainder of Du Gard administration, Dennis state that he saw no reason for SD to ever again pursue participating in the EB-5 Program.

    Over the past week, what “offensive wind” passed from “backsides” behind one-party rule closed doors causing such a 360 degree reversal in the GOED’s desire to continue to participate in the EB-5 Program?

    Team-Guymon, Out!

  32. larry kurtz

    South Dakota: Land of Infinite Vice.

  33. Disgusted Dakotan

    This EB5 program is the opposite of what Republicans claim to believe in. Amazing how they bash Democrats for involving government in the free-market and then jump on such a program when they find out they can run it like Tony Soprano.

  34. Mr. C and Jerry have stated they do not want South Dakota to participate in this E-B5 stuff and I tend to agree with them. We need to just shut the door on this type of promotion and I even go so far as to say we should stop advertising for tourists. I am not kidding here and wish that we would stop inviting people here. I’m with Jerry and Mr. C as being against any and all E-B5 project people coming in.

  35. Jenny, Joop is around town. He consistently refuses comment to the local paper; I suspect I will fare no better.

  36. If you see Mr. Joop at the local market or such you should try and photograph him like you did those fellows pushing for an 18% cap on pay day loan sharks. Go to Joop’s house and ride your bike around the front yard until he comes out to yell at you. Nobody is trying to get his side of the story and you could help him share it here on the blog and then the media would have to pick it up from you. Angela Kennecke might be interviewing you.

  37. Leslie, Aaron Scheibe became GOED Deputy Commissioner in June 2014. He’s a Pierre native. He worked for the State Department, including gigs in Belarus and Azerbaijan… hmmm… maybe he knows the guys who run that Russian rail firm that got EB-5 money from NBP….

  38. You know, Joop Bollen did speak with Madville Times once, in 2010, about the status of the Korean investors in the bankrupt Veblen dairies:

    http://madvilletimes.blogspot.com/2010/09/veblen-dairys-korean-investors-keep.html

    Maybe I could remind him of the good times we’ve had together.

  39. Grudz—press secretary? No way—then I spend all day saying what someone else tells me to say. That’s what Pat Powers does now. Blech.

    I would consider running EB-5. I’m in Aberdeen, where the old headquarters was, so no big shift there. Thanks to my blogging, I am likely among the dozen people in South Dakota with the most knowledge of how EB-5 works and what went wrong last time. My record of holding the state accountable for corruption in its previous incarnation would inspire investor confidence that I would run the ship right. Bob Mercer in his weekend column endorsed an idea that Steve Hickey inspired me to write about last year, applying EB-5 investment to the reservations. I would use that idea to give South Dakota EB-5 some moral credibility.

    Plus, I could make $50K in fees from recruiting just one EB-5 investor. O.K., I have to split those fees with the immigration lawyers, but even if my cut is just $10K per investor, if I got 1,000 investors, I could retire to full-time blogging… and buy an airplane to go to more events statewide! (Actually, I might prefer a helicopter.) Thanks for the suggestion, Grudz!

  40. Jerry, I do understand the out-of-state lawyering: the only experts on EB-5 in state are all Team Joop. If Team Daugaard wants to satisfy USCIS’s concerns and beat the games that Bollen, Sveen, and Hanul Law (H & H law firm in California! Austin Kim! they’re back!), they’ll need some other EB-5 experts. There’s part of the problem: Rounds and Daugaard trusted Bollen fully and had no other experts who could check what Bollen and Benda were doing.

    Speaking of Benda, I’m not sure that any of the issues raised in the USCIS Notice deal specifically with actions Benda took. But in the broad picture, it is interesting to watch the state have to shift from blaming Benda for all EB-5 ills to now blame Benda and Bollen. Hmm, who will be added to the blame list next? Jeff Sveen at Dakota Provisions? (Thanks for that reminder, Sid!) Morrie Berez (he’s back, too!)? Tim Engel (who drew up the GOED–SDRC Inc. contract in 2009)?

    How many more guys will the state need to throw to the wolves to put the EB-5 scandal to rest before it costs someone an election?

  41. Cory has powers ran anything on the flag.

  42. I would like to know which Regent(s) made the decision to privatize? NSU and Regents talked Joop into doing this for some reason-unless it was the other way around–but they have already denied they were in control of Joop afterward, they acted like he was acting on his own.

    Why did NSU and/or Regents think their was a competitive advantage and what was it, and when did rounds know of this and who told him. Regents told him, i’d wager, behind the scenes, knowing full well for some reason, the $45K, that somebody–joop/sveen (?)… were going to get very rich.

    hard to concentrate in the 11th inning….communists!!

  43. well spoken badgers!

  44. jerry-i kinda recall jackley included the 550k diversion of NBP funds as he was getting ready to torpedo benda, according to jackley, but not the details. i think others have pointed this out too, recently

  45. grudz weren’t u in favor of NOT confusing the tourists with the harney name change u gagged on?

  46. To answer the question about why the Regents agreed to hand over total control to Bollen and SDRC, Inc., one only need to know that Harvey Jewett, at that time still mentioned on the Seigel,Barnett and Schutz website as a partner in the firm, was a Regent at all pertinent times. Mr. Jewett, prior to leaving the firm in the 1990’s to become general counsel for Super 8 Motels, was primarily responsible for handling the Hutterite business for the firm. His protege who took over from him when he left was and is Jeff Sveen. As we know, Mr. Sveen is the attorney for Joop Bollen and SDRC, Inc. and in control of a borrower of EB-5 funds loaned by an entity created and controlled by SDRC, Inc. and Mr. Bollen. Further, as we now know, Mr. Sveen and Mr. Jewett have continued to work in tandem on subsequent matters in different capacities which have benefited them both financially. The most recent public example was Mr. Jewett becoming Receiver for a Hutterite Colony and Mr. Sveen submitting bills for work done for one of the factions in that litigation. After all, mutual hand washing is the norm in Aberdeen, South Dakota where conflicts of interest do not exist in the “law.”

  47. jerry, I agree that revisiting the timeline and documents leading up to Jackley’s request for a grand jury investigation of Benda and the felony warrants could reveal the slight of hand Jackley used to bypass the real kingpins of the corruption. From what I can see, the line of communication and command ran between Mike Rounds to Harvey Jewett to Joop Bollen.

    Jackley isolated the scope of his official actions to the double-billing of airfare and the $550,000 check Mike Rounds handed off to Richard Benda as they both were exiting the Governor’s Office. But limiting the charges to peripheral matters are backfiring on the Rounds/Daugaard political narrative: Talk to the dead guy.

    Cory’s done a masterful job of piecing together the information from the recent revelations. The truer picture is coming into focus, and nobody should suffer under the Jackley illusion that this is and always has been about Richard Benda. A far more worthy target of Jackley’s investigation and a grand jury, as Sid seems to indicate, should have been Joop Bollen and his network in the Regents. Mr. Benda was a bit player in a very large scam.

    Blaming everything on the dead guy no longer fools anyone.

  48. i remember becoming aware of how, in small populations (sd lawyers), pretzel making (bending over backwards) had become de rigur because of intense competition for the limited client pool. thus lawyers are sitting on city, county, state boards to get exposure to the next big case or area of expertise. don’t know if that’s still the case, but assume the bar association had to creatively adapt or else sanction all the “important” lawyers (e.g last or next bar presidents?).

  49. rigeuer

  50. kinda close!

  51. mike from iowa

    Did Powers also invent the internet and claim to be the inspiration for Love Story? Maybe he was the swashbuckling 007 before Ian Fleming ever dreamed him up.

  52. 90 Schilling

    Put Jackleys public comments on a timeline for your readers to append, Cory. The distortions will appear.

  53. the noose tightens. just as chris christie lost weight over rachel and NJ dems’ attacks, daugaard and rounds have got to be feeling the heat. oh, i forgot, the cover-up won them SD landslide elections so….

  54. Leslie, Rounds knew Bollen was privatizing EB-5 into SDRC Inc. and approved of that move:

    http://madvilletimes.com/2014/10/rounds-approved-bollen-2009-contract-money-more-important-than-rules/

    The 2009 GOED-SDRC Inc. contract to privatize EB-5 went to Rounds chief of staff Neil Fulton for approval:

    http://madvilletimes.com/2014/11/bollen-rounds-chief-of-staff-involved-in-final-approval-of-sdrc-inc-2009-contract/

  55. mary hartman’s comment 08.18.15 about EB5 used for money laundering drug cash internationally is interesting. sdmagazine september 2013

  56. Thx Cory. I was thinking someone pitched the competitive advantage to Joop. They pitched it to rounds, and/or benda, then joop agreed to the 45K contract under the no-bid rule, joop agreed to take it on and quit his state job, and hmmm, someone convinced joop all he had to do was take care of the Koreans and Californians, and not tell the Regents/NSU’s/AG’s lawyers about that little Darley problem. Joop is either very stupid, didn’t read all the SDRC,Inc./SDIBI owned state documents, or didn’t understand them, or maybe a local lawyer had his back the whole time and the stooge was really Joop and the mastermind might have been Sveen and/or Hanul??

  57. Jack Ward-type lawyer?

  58. Joop Bollen is not stupid.

  59. Not stupid, Cory. Narcissistic perhaps.

  60. A simple US Attorney could have asked Neil when he delivered and briefed the paperwork to Rounds for his approval. I find it interesting that there are hundreds of thousands contracts that are reviewed and signed by and for the governor, but this one had to be approved by Neil to be signed by the governor himself.

  61. We had a simple US attorney, Jerry. There’s plenty of them to go around.

  62. there is the Les i have grown to know and… well, my thesis is he (joop) is stupid; either he educated the lawyers, or they educated him.

    as far as brendan goes, there must have been some interesting conference calls with FBI, USCIS and perhaps SEC lawyers, perhaps involving duffy, and zach crago. somebody decided on an overall strategy, given the election, and we are seeing the hammer come down. they are likely well aware of MCEC now too, and are likely making some other conference calls.

    god this is a great country sometimes, on the dem side anyway. tonto rides again!

  63. i have seen this before. some smart guy says we can get around it with a no-bid contract. everybody smiles and its off to the races.

  64. Logical, Les. Con men must have high opinions of their own abilities to believe they can pull off schemes like South Dakota’s EB-5 program.

  65. mike from iowa

    Seems to be a load of narcissism in South Dakota. Must be the water.Or rock dust from the Black Hills.

  66. Narcissism doesn’t fit the German/Norwegian/Lutheran/Midwestern profile, but there seems to be just enough of it around to propel scandals like EB-5.

  67. mike from iowa

    Seems to be the dominant trait in wingnuts.