Governor Dennis Daugaard might want to reallocate $20 million in his budget address next week. 35 Chinese EB-5 investors are suing the State of South Dakota and Joop Bollen for $18,550,000.
In an action filed in Hughes County today, these EB-5 investors claim that in 2010, Mike Rounds’s Department of Tourism and State Development (now the Governor’s Office of Economic Development) and Mike Rounds’s EB-5 visa investment czar Joop Bollen lured them into investing $500,000 plus $30,000 in fees each in SDIF Limited Partnership 6, a shell corporation created by Bollen to pool money for investment in the ill-fated Northern Beef Packers slaughterhouse in Aberdeen, with “material misrepresentations and omissions of material facts.”
To keep it simple, let’s just say the Chinese investors feel the state and Bollen lied to them. What lies did the state and Bollen tell?
- the NBP facility was substantially complete and that the funding to be provided by LP6 would allow for the completion of remaining construction and the operation of the facility;
- the Project was competitive and had a sustainable business model;
- the Project was sufficiently capitalized to generate revenue from operations commencing upon the investment(s) being made;
- the Project would meet or exceed the minimum number of jobs required under the EB5 Program;
- Defendants had carefully reviewed the financial information of the Project and recommended it as sufficiently sound to generate jobs and repay the loan from the investors;
- the Project had a competitive advantage over other major competitors in the beef packing industry;
- the investors were protected because the loan being made to the Project would be secured by security interests on equipment, a corporate guarantee, and a mortgage on the property;
- NBP will be locally owned and led by recognized beef industry experts [LP6 Claimants v. South Dakota Department of Tourism and State Development…, SDRC Inc., SD Investment Fund LLC 6, and Joop Bollen, 32CIV15-000312, Complaint, 2015.12.02].
The Chinese investors say those statements were hogwash because…
- the Project did not have adequate financing to achieve sufficient revenue to create the required jobs or repay loans or support any refinancing;
- given the poor financial condition of the Project the investors could not be adequately secured;
- the Project did not have any favorable or competitive position and did not have sufficient capital to commence operations and generate revenue;
- the Project was owned by foreign investors and not run by beef industry
- that the project was already plagued by years of delays and was already in need of additional financing [Complaint, 2015.12.02].
Furthermore, the investors contend that the state and Bollen failed to inform them of several details that might have affected their decision to trust Bollen and Northern Beef Packers with their money, such as that…
- NBP had been unable to sell tax increment financing bonds to finance the Project;
- the Project had experienced financial difficulties and the initial foreign EB 5 investors had ousted NBP’s management and had become the managers and owners of NBP;
- additional investments or loans of at least $30 million would be required for the Project to begin operations;
- NBP had itself acknowledged that loans to the Project were extraordinarily high-risk because the Project was undercapitalized and its assets were not sufficient to repay or secure any loan;
- substantial liens had been filed against the Project;
- NBP was unable to pay, or was delinquent on, property taxes due and owing;
- other EB-5 investors had lost their money in a similar project promoted and administered by Defendants relating to the Veblen East Dairy in South Dakota;
- the Project’s business was subject to legally imposed restrictions and obligations that placed it at a disadvantage [Complaint, 2015.12.02].
The plaintiffs lost their money because Northern Beef Packers didn’t open until October 2012 and only operated for nine months before going bankrupt in July 2013. The investors are thus calling fraud and breach of fiduciary duty and demanding their money back. In a count titled “Pierce the Corporate Veil,” they further argue that a Hughes County judge and jury should not be fooled by the corporate shell game Bollen played with his “SDRC Inc.” and “SDIF LP 6” to shield himself and the state from liability for such malfeasance.
The investors are maintaining their own corporate veil: they are suing not under their own names but under the name of “LP6 Claimants LLC,” a corporation formed to pursue this litigation. The New York Division of Corporations shows that LP6 Claimants LLC was incorporated on October 14, 2014. Its designated contact is Ezio Scaldaferri, Esq., of Feder Kaszovitz LLP, 845 Third Avenue, New York, New York. Without names, I cannot verify that these litigants are the same investors who were reportedly organizing to sue South Dakota over their EB-5 losses in September 2014.* The attorney listed on the complaint is Steven Sandven of Sioux Falls.
But here they are, and they are going to be able to make a pretty good case that Bollen and the state bamboozled them into investing in one of the biggest economic development boondoggles in South Dakota in this century. Plus, they are tackling co-defendants who aren’t terribly inclined to work together, given the state’s and Bollen’s pending countersuits over EB-5 mischief. To make matters worse, the plaintiffs come shouting Fraud! just a couple months after the USCIS came shouting Corruption! and served South Dakota with its Notice of Intent to Terminate our EB-5 designation.
To top it off, Governor Daugaard walks into the Legislature next week Tuesday to lay out his plans for the FY2017 budget. On top of explaining how to pay for Medicaid expansion and the Blue Ribbon K-12 panel’s teacher pay package, the Governor has to decide whether he should recommend that the Legislature set aside $20 million (don’t forget, we’ve got lawyers to pay!) in case we lose or (gulp!) settle the LP6 Claimants LLC suit. The state’s Extraordinary Litigation Fund doesn’t have $20 million. The indemnification fund Bollen was supposed to hang onto for the state has maybe just a million. And Mike Rounds only has $160,399.10 left in his state campaign warchest that he could convert for personal use.
What do you think, Governor? Can we win this one? Or is the EB-5 scandal about to cost the taxpayers $20 million?
Update 16:19 CST: The EB-5 lawsuit is all over the media:
- Jonathan Ellis, “State Sued for Millions in EB-5 Suit,” that Sioux Falls paper, 2015.12.02.
- Dirk Lammers, “Investors Sue State Over Failed Beef Plant Investment,” AP via Pierre Capital Journal, 2015.12.05.
- Minutes before the lawsuit hit the press, Rep. Kristi Noem issued a statement saying she hasn’t read the proposed reforms of the EB-5 program yet (what, too busy putting up Christmas decorations?) but she will vote against renewing the EB-5 visa investment program without reforms.
Update 18:18 CST: Always keep reading…. As I page through the exhibits, I get to Exhibit 2, which does indeed list the 35 investors who want their money back from South Dakota and Joop Bollen. None appear to be those mentioned in my September 2014 report about possible litigation:
The SDDP lost another 1,119 registered voters last month effective 12/01/2015 from the SD SoS office continuing their longtime monthly slide so with EB-5 and other issues it sure doesn’t look like the SDDP will be the vehicle for change here in SD for at least a few election cycles.
Lynn would like a picture of the above in some big Newspapers that would beawesome.
There many shoes left to drop before any statewide votes are cast making the legislative session ripe for revolution.
It isn’t making much of a difference and the people we have been talking with are more concerned about other things right now with the upcoming election. Those numbers have been dropping for quite some time with a faster rate expected to drop prior to the election.
As long as the earth hater party is the only one holding primaries it’s ridiculous for any Democrat not a candidate, holding an office or being a delegate to be registered in the SDDP.
Besides that photo was on TV and print ads prior to the last election and it was still a disastrous election for the SDDP.
Why aren’t they suing Richard Benda? He did it.
It will never go to court. Expect a settlement for an undisclosed amount.
This is a case just begging for a change of venue-say China. Where coyotes cry and defendents die-deep in the heart of China.
South Dakota/Netherlands beans sure work up a blow.
As of 12/1/2015 the SDDP has lost 36,761 registered voters since 2009. EB-5, what happened in Platte, teacher pay, and whatever else has had no effect to reverse the decline in registered voters, fundraising or those elected to office.
It never seems to enter the conversation that the decline in Democratic registrations is not a failure of the party but a matter of people leaving the state, physically and mentally, for the same reason their ancestors left the Old World to come to South Dakota. Or that Syrians are becoming refugees from their homeland. The state is so hopelessly corrupt–with the full support of many of its people–that people do not invest their lives and their minds in the place, but focus on escape. Review the above points in the law suit and see they represent how predominantly business is done in South Dakota.
Joop Bollen -SDs Corporate Welfare King, courtesy of the SD GOP, Governor Mike Rounds and the SD tax payer.
Welcome back Jenny!
Who’s on suicide watch now?
Dr. Newquist there are other factors contributing to the decline of the party. Shooting oneself in the foot certainly does not help the party.
How did these voters “leave the Democratic Party”? Did they send in a request to be removed from the ranks? Does membership need to be renewed? Did these voters move away out of state or to a new county? Did they change to registered Republicans and can you verify any of the above?
I changed my affiliation when I moved to a new county from Democrat to Unaffiliated because I now don’t get solicitation for donations and get to take part in a lot of polls. Pollsters love unaffiliated voters aka UA. Colorado is a third Repub, a third Dem and a third UA.
So, Lynn… tell us how all those voters left the party.
PS… and while you’re at it, explain what change you are referring to. Be specific in what is in the trunk of your “vehicle for change”.
Whoa. This post is not about voter registration numbers. This post is about a lawsuit brought by EB-5 investors against the state and Joop Bollen that could cost taxpayers $20 million. I didn’t say a word about political implications for either party, beyond suggesting that Mike Rounds, as the Governor who brought us the EB-5 mess, might want to consider contributing toward the settlement or verdict with some of his leftover state campaign funds.
But I think I get Lynn’s MO. She sees an issue that could be politically devastating to the SDGOP (not just the complicated allegations we were laying in the 2014 election, but a lawsuit for fraud that, alongside the USCIS Notice of Intent to Terminate, affirms the allegations that Patrick Duffy, Democratic legislators, and I have been laying out since Richard Benda’s death in October 2013) and realizes she must immediately divert attention with some side issue. Next she’ll probably dig up information that the plaintiffs smoke pot.
That’s not happening here. Let’s talk about the merits of the lawsuit. Let’s talk about the allegations of fraud and breach of fiduciary duty. Let’s talk about the budget impacts.
As for political implications, well, we’ll cross that bridge with the voters when we get there. Go make your calls, Lynn. I’ll start making mine, and we’ll see how well the EB-5/GEAR UP corruption message plays in what is shaping up to be a very different election year from 2014.
Please continue. I look forward to the SoS January voter registration report and we can see what happens at the polls again. If the SDDP gets trounced again it’s gotta be the ole corruption right? :)
Hear, hear Mr. Heidelberger. I for one was just sick of her diversionary tactics and realize the only way to stop her is to demand facts and answers. The facts and answers never come and she’s gone…for a minute any way.
This lawsuit is, as Don Trump would say, HUGE. There’s not a rug in USA big enough to sweep this under and this New York law firm is going to shred South Dakota like the low grade mozzarella cheese the state is forever promoting and pedaling.
Maybe Jackley will have to divulge insider information in his defense of the perpetrators of these frauds. Jackley can toss the whole bunch under the bus and become the hero and ride off into the sunset with the girl to become governor by proxy.
Thank you Cory, I appreciate your efforts to avoid another irritating distraction.
Note that Kristi is not backing reauthorization of funding EB5 just like she jumped on the human trafficking bandwagon after Rich Benda entered his contract with shotgun. There is still much to know.
mike – Too late now for Jackley. That bus left the station when this suit got filed. He’s now on the ropes to keep defending his pals. He can kiss that governor campaign goodbye!
I don’t think this is going to quietly settle with state government being tapped for nearly $20 million. It is interesting that some other names were not added to the list for failing in their roles to protect the public and the state’s best interests (believe it or not, it isn’t in the state’s best interests to screw 30 people out of millions of their money). Namely, Attorney General Marty Jackley and the members of the House and Senate Government Operations & Audit Committee. Jackley wouldn’t do his job to bring charges against Bollen, Rounds and the other racketeers. The GOAC refused to put Daugaard, Rounds and Bollen under oath and provided more whitewash to help the crooks evade justice and accountability to the cheated investors.
As Cory points out, the operative word here is F-R-A-U-D, which is in the first sentence of the complaint. The next stop is a criminal complaint. I’m sticking to my guns that this is a classic RICO case in the making. Look it up.
Is this a situation where Jackley might want another attorney to represent the state? This looks like a slam dunk to me.
Just like the 80 mile an hour was slipped into the final days of the 2015 session there will be $15 million inserted into the final budget to pay this settlement that never went to court.
A Republican might console his party by thinking, “It’s the Chinese own fault for investing in a state that’s rated as USA’s most corrupt. This deal was just horse tradin'” However when those claims were made to inflate the value of the investment and those claims were knowingly false there’s no other description than fraud…except maybe just theft.
Chinese justice is swift and merciless.them not having a bill of rights worth a darn.
96,I hope Jackley is through for the sake of all South Dakotans who have had to suffer through these decades in need of regime change. Maybe now is the time it happens.
Besides what Cory cribbed from the complaint, those Chinese investors put their money in because they were dealing with the government of South Dakota. Bollen’s outfit was affiliated with the government of South Dakota. The governor himself was taking pictures with Chinese investors. They thought if this is a government backed project it has to be legitimate.
Their money got siphoned away in a shell game. Their money got handed to some foreign shell companies to be divvied up among crooks rather than invested as intended. Middlemen like the governor’s brother were paid handsome fees for facilitating these shell games with the investors’ money.
These investors will follow the money where it leads. Things are about to get interesting for the Joopster, his shorter brother by another mother, and the corrupt party politicians who blamed it all on the dead guy. This lawsuit and the USCIS investigation promise to continue producing revelations throughout the 2016 election year. Somewhere in the ether Richard Benda is smiling.
Well, at least now some are getting why Mike Rounds needed to raise $9 million.
Recall that Brendan Johnson said the US Attorney for the District of South Dakota seldom pursues charges against candidates.
All of a sudden it makes a weak candidate like Rick Weiland look like a plant, init?
If the Clintons can buy Trump why can’t Denny Sanford buy Weiland?
Businesses in Rapid City’s Main Street Square are dying like flies. Anyone? Dr. Weiland?
I just checked the press release blog. They apparently haven’t heard of this news. Maybe Lynn can break it to them.
Jeff Barth, so astute. While we’re asking folks for facts, someone please remind me exactly what crime Rich Benda has been accused of committing and the details of when/where this crime was carried out. (Remember, collecting your paycheck does not constitute a crime.)
Porter Lansing, “not a rug big enough” … classic.
The eye-popping, hair-curling nefarious graft that will be revealed as these lawsuits play out have the very real potential to change the SD political landscape for decades to come. (Lynn can count voter registrations. I’ll talk to the folks around town, eavesdrop at cafes and count traffic to news stories to take the electorate’s temperature.)
Fellow readers, this is history in the making. As career-ending as Bill Janklow driving into a motorcycle, as indelible as the faces on Mount Rushmore, as ghetto, ultimately, as a Cops rerun.
Gawd, it’s tragic that Pat Duffy did not live to see this.
In honor of his memory, someone out to initiate a measure that would prohibit any overstuffed state lawyer settling this suit. Is there any way voters could make sure this goes to trial? (I know 2016’s all set, but by this time next year this will suit just be getting interesting.)
No one in state government cared about the investors. And I thought they were capitalists. They just wanted a cheap packing plant to have jobs and let that be their legacy.
When they sold the plant for less cash than the liens of local contractors they did not care that they would bankrupt those good South Dakota businesses. So they for sure did not care about being fair to foreign investors. They talk South Dakota values but who would want to invest here unless it was their own business and they been here forever so they do not see the stagnation. This whole project was a pie in the ski deal that did not fit a beef cow feeder cattle state. ‘Where’s the beef’ is a good question. Lack of fat cattle was a major problem here. Those foriegners had no clue how bad this idea was.
Lynn, I registered Republican in 2010, so that I would have a vote in the many Republican primaries. I changed my registration back to Independent this year, because I could no longer stand the stench from the Republican party. I will bet that the Republican numbers have gone down as well.
You Republicans are so died in the wool loyal to your party, that in spite of the fact that your candidate for Senate only had 27% of the vote in the primary and you still had three other choices in the general, two of which were also Republicans, you gave the possible jailbird 52% in the general. We could run a dead Jackrabbit as a Republican in this state and he or she would get elected.
One other thing that has not been mentioned yet. If these folks don’t get justice in Court, they will probably and still might get it in other ways. Another thing that will probably happen is that there will be other deals come forward for this and other lawsuits. I wonder how much Joop’s Egyptian artifacts are worth and if he can get back some of the ones he donated.
You make my point, Elgersma. You have more excuses than Carter’s has liver pills.
I was a Democrat all my life until this past year. Voted Democratic in national and state elections where I lived. Caucused as a delegate for Al Franken in his slim 100 vote victory over Norm Coleman when I lived in the Twin Cities. I grew up seeing George McGovern periodically since my grandparents from Mitchell were friends with him and volunteered including that side of the family for his and SDDP candidates but there is no way others and I will support the SDDP and on a couple of critical issues which are very misguided and will have long term negative consequences that outweigh all of this.
If the party wants to go on a self destructive path along with some crazies than so be it. I’ll do what I can using my skills and experience to prevent some of this happening. Hey! I could be totally wrong and there could be a total revolution with a total sweep across the state or the party’s brand is so damaged it is never relevant again but exists in name only as the party of extremists and those who are now basically independent minded are either working within the dominant party for positive change or a new alternative emerges. Time will tell.
Lanny, i was a unicorn all my life until the Westerhuis goose chase turned into a snipe hunt.
Larry, did the ex-wives all find other men? Is that why you’re so cruel? Man, you gotta mellow out. Go outside and have a cigarette. You’d think the weed would mellow you out like it does most people. Lynn is not the enemy.
And yet Bill Janklow was DSU’s first co-inductee to our hall of fame post humorously.
What is extreme about calling crooks, crooks? Why is it extreme to be p/o’d because the party in power wasn’t happy having an overwhelming majority, they had to gerrymander out some more Democrats? What is extreme about being thoroughly disgusted with a political party that would railroad out one from the other party who called for investigation into this mess by the legislature in Nov/Dec 2013 before the 2014 session started so that we wouldn’t be having to face the feds now?
Sorry but your story does not hold water. My parents both worked for McGovern in the 50s already. It is specifically because the Dems allow themselves to be cowed by the right, that they are less viable than they should be. The Dems have moved so far right that the last three Democrat presidents are to the right of Richard Nixon.
If you think that the dems or anyone else should hide from this EB-5 mess, I remind you that the most conservative Republican in the Senate primary last year, Stace Nelson, was all over this issue like stink on crap. There are some people with courage enough to call a spade a spade. Others will suggest that we should look the other way. I think not.
Dang! You don’t suppose the Chinese will end up owning the packing plant?
In typical fashion, the Rapid City Journal hasn’t published a word about this on their homepage, I emailed Cory’s post to Seth Tupper, we’ll see how down plays it.
Pat Powers is the Tariq Aziz of the SDGOP.
Don’t let Larry get under your skin. Maybe his purpose on earth is to test our sanity. Calm heads prevail.
Someone please explain why this is not in Federal court. Please and Thank you
Hope you buy my book, Jenny. Should be out any decade now.
Roger that deal is done regarding the packing plant and has had new owners for some time now.
Everyone has a special purpose. What you gonna name your book Larry?
The SDDP just does not hold much power and is nearly powerless. Remind us of Stace’s primary results where he hammered on EB-5 during his campaign? What happened to the SDDP candidates? You can only go so far in blaming corruption.
What is more effective? Being vile, extremely offensive, blowing things way out of proportion sometimes with unsubstantiated claims or being tactful, respectful and trying to reach common ground knowing that in some instances and politely letting them know as a last resort which no one wants that the actions they take are harmful and would most likely be legally challenged.
I keep thinking that maybe just maybe the autopsy report on Benda may just have to be surfaced in this with the money we are now talking about. We have not even spoken of the the money Kathy Tyler brought up. One way or another, Mike Rounds is done and so is Daugaard along with Jackley. That means that some guy who just stood up and gave the finger to the whole crooked crowd may just have a shot at the brass ring. I am talking about Gary Hanson.
I’m not saying Stace was vile or anywhere close. I liked and like Stace but there is one huge liability for the SDDP that uses those tactics for example.
Doggone it Larry, don’t insult Tariq Aziz. He tried to keep us out of the war but we knew better. To compare him with Pat Powers is an insult to Aziz.
Sometimes we just have to laugh a little bit more, Larry you jerk:
Lynn, who cares about the SDDP regarding this? I certainly do not. This is about some boys that might just get a thrashing over this corruption. That is all that matters. Party stuff is for tailgating regarding this, this is all about RICO, Mail Fraud and the list goes on. Go make some phone calls, call Jenny.
Stick your head in the sand if you like, Lynn. I am sure that if this turns out differently than you think, no one here will say, “I told you so.”
Lanny, We can agree to disagree. As I’ve said before time will tell as to what happens. Back to those phone calls. :)
Those charges listed are also covered by SEC laws and rules.
You were never a Democrat. You may have been registered to the party but there’s no criteria for membership. You’re way to selfish to be a part of such a fine group of Americans. You need things your way, have no tolerance for others and can’t get along socially. You’re not even a Republican. Just an angry old lady with more baggage than the Samsonite factory.
Will Joop Bollen get this case transferred to Aberdeen? If this case goes bad for the Regents, will that have an effect on the Regents trying to salvage Gear Up? Perhaps a case should be brought against Supt. Graves for gross violation of his Mitchell School Board contracts and ask for the return of money paid to him.
And what is it with people wearing suits and sports coats with dress shirts open at the collar, and no neckties? Is that supposed to connote “I’m a cool guy. Just like you.”?
Just so you know, it doesn’t connote that. It suggests instead; “I am an asshole who is trying to be a cool guy, just like you.”
I know you won’t get this, Lynn.
Rounds and the others used the good name of this state of South Dakota under the guise of their government connections to lure the money. These 35 suing may be the tip of the iceberg of the suits yet to come,eh?
Hey Larry, I just talked to Moses. He said that I am a zebra. So I asked him if I was a black and white zebra or a white and black zebra. He said, “you are what you are.” I said that I must be a white and black zebra. He said “how do you figure that?” I said, if I was a black and white zebra, you would have said “you is what you is.”
The good news is that we have 220 million in a rainy day fund. Looks kind of cloudy on the horizon, maybe the Chinese will slap a lien on it.
Lynn says: ” I’ll do what I can using my skills and experience to prevent some of this happening.”
Now she’s threatening to use her skills and experience. (Pause, while we think about this.)
A question arises. If this Lynn person has any skills and/or experience at anything of value why is she/he/it not leveraging said skills and experience somewhere?
I wouldn’t even bother bringing up the question except that I am a person with no skills and/or experience who has repeatedly been insulted by this skilled and experienced cow.
Oh thanks for the racist joke, really appreciated here, not
Wow….these comments are better than the Gillette Saturday night fights. Keep it up folks…maybe someone will land a ‘Relevancy’ punch!
I apologize. I did not mean to be offensive to anyone.
ok…back on track….take a look at what our neighbors to the north have to say about our ethics in SD.
Cory, your blog is really, really, going downhill because of a few obnoxious primates on here that run the show.
Jenny, quick, grab the mirror and look….see the primate?
Damn! Another one of Cory’s excellent posts shot to hell!
Let me know when the squabble is over and back on topic.
Wow, North Dakota is even tossing us under the bus. What an embarrassment. The emperor has no clothes.
BOHICA, whatever you do, don’t let Lynn read that article.
I haven’t harassed anyone one here like you, Kurtz, and Newland, Jerry. It feels like I’m back in grade school when I’m on here, Cory. Your boys just won’t behave. Bye, I’m outta here, much better things to do then this.
Wow, I go down to eat some chicken wings and everything goes to h e double ll. Finally it’s confirmed I’m the only sane one. I mean lighten up. Even Larry can’t figure this one out. Laugh it off you freaks you take yourselves way too seriously.
Lanny et. al.
Here is how I see the world…it is mathematical folks… D+R+I= 100%
The theory is…not all D’s, R’s and I’s are idiots…all act independently and make rationale decisions on issues, topics, and vote according to how they feel about individual topics and issues.
Ok…5% or so of D’s and R’s are idiots and vote straight ticket.
Some D’s vote for R’s…and some R’s vote for D’s….I’s vote for both D and R’s.
It takes 51% to win an election.
So…someone has to be more convincing on each issue to win. In order to be more convincing to win the 51%…the arguments on any issue or candidate need to be provided to the biggest portion of the voting populace as possible.
Only some of the D’s, R’s, and I’s read these types of blogs. If these readers want to impact the bulk of the voting population, the word needs to be spread through multiple media sources.
How do you level the voting playing field? Let everyone vote on every issue or candidate.
To me, this is such a simple solution. One person…One vote…One level playing field….The local PTA’s make it work…
Now I got off the topic Cory had for this post…Sorry Cory…but the comments on this story reminded me of a herd of cats fighting over a mouse….and the mouse escaped during the fight.
This is merely one SDRC investment project. Do we have any idea how many other lawsuits could be coming or how many $ 500,000 investors there actually are tied to the SDRC, which the state could be on the hook for?
Has the media in this state tried to reach Morrie Berez? He wrote the rules and worked for the SDRC after leaving his federal post, where he wrote the rules for the EB-5 program before coming to South Dakota. How could this happen Morrie?……Angela, you need to track him down and ask him that question!
When you track him down, ask him about the liberal job creation multipliers he granted to SDIBI and SDRC investments. He allowed a casino EB-5 out in the Black Hills to have a multiplier of 29, when the national average was less than 3 for EB-5 programs. What does a multiplier of 29 mean, well it means that if a casino is started with EB-5 investments (I believe they only need to be 20% of the total investments involved for a project) and eventually hires, lets say a 100 employees, then actually it created 2900 direct/indirect jobs (indirect jobs count here). Now, a $ 500,000 investment needs to be responsible for 10 jobs I believe in two years time to get a green card, which means the casino program could conceivably have the State on the hook for say, $ 145 million (2900 divided by 10, times $ 500,000) based on an unregulated sales pitch in China by the SDRC and South Dakota representatives who assumed or claimed the casino was going to happen to begin with…… And who knows, maybe they told the potential Chinese investors that it would create 200 jobs, which means a $ 290 million bill potentially for the state or 300 jobs or 400. I think you know where I am going with this…
Then you consider the other mystery EB-5 programs and their liberal multipliers and you are starting to talk about the State going into bankruptcy or definitely draining its reserve funds….. Sorry teachers and the working poor who are weighing for their Medicaid, I guess in todays post Cold War world, communists get paid before South Dakotans thanks to 40 years of one Party rule…..
Mr. Newland, Mr. Joop may not buy his sports coats at the same thrift stores you do but he also doesn’t come close to your hat sporting style.
Larry is the only sane one I’ve decided. Minus a couple maybe.
Lar is saner than most.
Francis is right; this case has no business being in state court. The plaintiff’s increased their risk to lose twice – for every first year law student allegedly hears that one receives ‘better justice’ in federal court. And really, only 18.5 million; what about ‘investment backed expectations’ and other the other right-wing cockamamie right wing economic-judicial theories?
BAH. They’ll toss this case aside like the trash it is and then fine Mr. Joop the full 18 big ones.
Bollen is laughing to the bank, still.
James Park is gloating in his gang-nam law firm. Pyush Patel is counting his spoils.
All this political fog is just an embarrassing distraction.
Love the comments. Cory, help me out a bit. This is not the first lawsuit SD has entertained from the EB5 investors. We had one that was dropped after 2 years (before 2014?) and shortly afterwards we sold John Morrels to the Chinese. You seem to be the research King…..how do we find out how many law suits the State is embroiled in?
Can someone translate this site?
Looks like Joop Bollen and James Park are pitching their snake oil.
We will see if the people of South Dakota have a smart, big and/or strong enough government to protect themselves from crooks and suave international business men. Every election though, it seems, most of the voters here nowadays just want a continuously smaller, neutered, weak, and quasi victimized government. Unfortunately, for us, you tend to get what you pay for.
Current position: Home >> American Immigration >> Project Seminar >> Text 4.23 overseas success of US investment immigration official briefing 2008 Keywords: success of US investment immigration official briefing Date: June 5, 2008 Source: Transocean immigrant click:
Qingdao overseas US investment immigration official described the scene
The evening of April 23, the company in Qingdao Daily Press Group successfully held the third floor conference room South Dakota Investment Immigration official briefings. Scene of the guests were the United States, South Dakota International Business Affairs, Mr. Joop Bollen, the US law firm Hanno chief counsel, Mr. James Park, and Solicitor Mr. turkey Dakota US food company CEO Jeff Sveen, SDRC Inc. director of marketing in China Joe Mr. Kim. Qingdao overseas immigration Services Ltd. General Manager Peter spoke first, expressing attended South Dakota Immigrant Investor Program relevant person in charge guests a warm welcome. He said I had several visits throughout the United States, the selection of US investment immigration program, in line with the majority of customers and responsible attitude, after careful consideration chose the United States Agency for South Dakota Immigrant Investor Program.
South Dakota International Business Affairs, Mr. Joop Bollen
Visit the venue of the United States, South Dakota International Business Affairs, Mr. Joop Bollen from many different sides investment environment, regional centers and investment policy for South Dakota a brief introduction;
US EB-5 senior immigration attorney Mr. James Park Hanno US law firm on behalf of counsel, Mr. James Park from the aspects of US immigration types, EB-5 immigration law is based, South Dakota regional centers are described in detail;
Marketing Director SDRC Inc. Mr. Joe Kim in China Marketing Director SDRC Inc. Mr. Joe Kim is in China for the first 14 Dakota turkey food company made a business analysis; Click here to view pictures in a new window Dakota turkey food company CEO and Solicitor Mr. Jeff Sveen Dakota turkey food companies and Solicitor Mr. CEO Jeff Sveen is to Dakota turkey food company briefly introduced the company’s processes. Visitors are invited to join it personal briefing about the US investment immigration program questions with the company US investment immigration in Southern states project leader on-site exchange, warm atmosphere.
– US investment immigration assessment form – Welcome overseas investment immigration evaluation system, our immigration consultants will provide you with free investment immigration assessment. To ensure the accuracy of the evaluation, we strongly recommend that you provide detailed information as possible. At the same time, we as a professional immigration consultant to ensure that all information you provide strictly confidential! I wish you a speedy success overseas immigration! ! Basic information: Name * Sex Male Female * Date of birth Tel: * Work (residence) place * Email: * Fax: QQ / MSN: Whether or spouse before I visited the United States? Ever been refused a visa? No yes yes, please give details. Or spouse before I ever had a criminal record? No Yes * Net assets (you and your spouse together under the name of all the assets) and cash deposits: RMB (million) home equity (present value minus mortgage payments): RMB (million) Securities market value: RMB (million) net equity company or enterprise assets: RMB (million) Total Net Assets: * RMB (million)
The right side column translated from Mandarin:
Popular American Immigration Ranking 4.23 overseas success of US investment immigration officer 2008 Site Map
US Immigration Maryland Immigration Project Resettlement Project Vermont US employment development lending center in South Dakota, Idaho Immigrant Investor Program California Investment Immigration Immigration Immigrant Investor program reader understand the immigration process introduces US investment immigration immigration story emigrated to the US project briefing Transocean News US investment immigration News Overseas News US News Careers visa immigration news media reported news service News Overseas study Investigation notify US Immigration study (July 2011) Immigration Investigation Investigation Service Emigrants Hong Kong immigrants learn about Canadian Immigration New Zealand Immigration Canada Immigration Introduction Immigration Canada Immigration Transocean Dating Westerners understand foreign marriage visa before marriage canon international marriage counseling United States Internship United States United States Co-op internship programs FAQ Home teachers (Homestay) Chinese Home resume foreign friends home teacher Qingdao Qingdao Homestay Service Service About Transocean Announcement About Winter Camp translation Expert advice Transocean Tips
Visa & Passport Tourist visa Business visa student visa passport services Forms for visa visa Spain Ireland Germany UK visa visa visa visa visa – France New Zealand visa Australia visa service Visa Canada US visa
14. and 15. are Zhang. Could be “Smith” for all i know, or somebody’s parents, but…:
Feng Zhang (born 1982) is the W. M. Keck Career Development Professor of Biomedical Engineering in the departments of Brain and Cognitive Sciences and Biological Engineering at the Massachusetts Institute of Technology. He also has appointments with the Broad Institute of MIT and Harvard (where he is a core member) and the McGovern Institute for Brain Research. He is most well known for playing a central role in the development of optogenetics and CRISPR technologies.
Genomics is well on its way to smashing cancer. but SDGOP is all about …well, now we are starting to know….
Lora, you are thinking of Zhen, Wei, Yirong, and Ping v SDRC, SDIF LLC6, and Bollen, 2011. See my notes here:
Note that suit took place in federal court, got almost zero press, and was settled out of court before Northern Beef Packers opened.
The story has been out for 16 hours, and Pat Powers hasn’t touched it. He has had time to celebrate John Thune’s ability to increase government spending for South Dakota by $133 million… which is about the amount Rep. Kathy Tyler was telling us Bollen and Benda’s EB-5 machinations had cost the state of South Dakota.
Speaking of Benda—Jeff, I appreciate your reminder of Benda’s role in all this. I’ll bet Benda’s estate will never be included in a lawsuit because there’s nothing left to be gotten by ambitious plaintiffs.
Notice Jeff Sveen’s picture in the Chinese website Jane provides. He was in China with Joop, James Park, and Joe Kim in April 2008 promoting EB-5 investment in his Huron turkey plant.
Will this lawsuit be enough for the people of South Dakota to call for the resignation of Mike Rounds? Clearly, the Feds and the Defendants in the lawsuit believe Rounds holds enormous accountability for the EB-5 scandal. What about the resignation of Daugaard? Let’s not forget that the state already has a huge lawsuit against it regarding the Indian Child Welfare Act and the millions of dollars made off taking Lakota children into state custody and ignoring the federal law. This could potentially cost the state millions of dollars as well. If there is no recall by the citizens of South Dakota on these matters, South Dakota is probably doomed to have more and more corruption and fraud from it’s elected and appointed officials.
I think the reason nobody really wanted to stay on the merits is they likely had no competence to comment
As one because of what I do for a living, I am easily in the top 1% (8,000) to have some experience and knowledge to comment. This experience COULD LEAD to comments like:
All of the things you list as their primary cause for claim appear to be the stuff of standard due diligence to which the principle of “let the buyer (investor) beware even if the offering were subject to securities law and they have a duty to discern the reality of these statements. These are items which a reasonable accredited investor (which by definition these investors are likely deemed accredited) could confirm or not via a cursory investigation. If this is the best they got, the State’s only exposure is a settlement to avoid the costs to defend (nuisance settlement). However, I don’t know if the case is stronger or weaker as these offerings may have been exempt from securities law.
Then, our friend, the late Pat Duffy (who I would guess would be in the top 500 most competent people to entertain your question which is .0625% of the state) would point out what is wrong and right with my comments and add other items. But then, Pat would conclude but there are maybe 100 people who really can answer your question.
And, if one of the 100 people were to post, they’d have a few comments to correct and/or add to Pat’s and then probably say they could only answer your question after an investigation of to what was said by who and read all the documents in light of where legal culpability falls under the law.
In short, I know enough to know the magnitude of what I don’t know to offer an informed opinion. I feel more competent to debate the viability we will ever be able to beam people up to the Starship Enterprise.
Troy is right: Republicans see Bendagate as just another party success story. Get over it, Democrats.
P.S. David, I think these offerings are specifically exempt from SEC rules. The reason I think so is I think making these offerings subject to securities laws are part of the reforms Obama said he supported several years ago. He also suggested moving this part of the EB-5 program from Customs to Commerce. With just some minor differences, in general I support Obama’s announced reforms.
Hindsight is 12 gauge: right, Troy?
EB5 fraudsters assets frozen by SEC in seattle last month
For Gods sake Troy. Do you ever say anything besides, “Nothing to see here. Move along.”? You’re like a broken record.
So making false statements as an advisor is only cause to switch advisors? No fraud involved in that? I guess we all need to get those rules changed. So Jeff did not have to reveal his position as partner in the turkey plant in Huron to potential investors? It may be legal but sure seems wrong to me as a citizen and taxpayer in South Dakota.
If there’s any justice here, Joop Bollen will be indicted. If that doesn’t happen we need to install some people who will enforce the laws.
A Hughes County judge? Why wasn’t this case filed in federal court?
Francis, Fraud under securities laws and general fraud are different matters and I am not sure where this falls or how the different standards apply with regard to these claims and associated remedies.
Rorschach, nothing I said was to imply there is nothing there. My point is I think only a few people have the level of knowledge to speak to CH’s question on the merits of this particular lawsuit or exposure by he state.
Leslie, I didn’t see that. I was just commenting based on my memory of Obama’s proposed reforms. I have said for years the SEC has the greatest capabilities to investigate past wrongs and more specifically prevent a future recurrence. It is why I support the generalities Of Obama’s reforms. The degree the SEC has authority is good and I hope they exercise that authority. Unless there is more information, I stand by my current impression the SEC’s scope may be insufficient both for pursuit of the past and protections going forward.
One more comment: 7 years ago, we had the financial meltdown. Obama promised to pursue wrong-doers vigorously yet there have been very few prosecutions and fewer convictions. One of the following is true:
1). Few people actually did anything wrong.
2). He was lying when he said he would pursue wrong-doing.
3). Prosecution is hard, takes time, and is hard to prove.
Personally, I think it is #3.
EB-5 and State Dem numbers may be related as we Voters are expected to believe that State Democrats have absolutely no knowledge, nor culpability in the corrupt goings on of SD Government, so they have nothing to report. Maybe the Dems numbers are declining as the voters aren’t buying into this nonsense.
It is the young of any society that institutes change. Change here would have to come from a Party other than the Republican Party, but that is not going to happen, so the young flee. They can see the truly “liberal” point that it is wrong to let babies die of seizures and to incarcerate rather than legalize medical marijuana, which is only one of many Liberal positions that appear set in stone. They will move elsewhere and wait for the baby boomers to die off, then maybe return. I fear the percentages will remain the same, as will the status quo.
It could be that Voters are smart enough to see they will find the only small bit of influence by registering in the Party that runs everything. There is one problem with that plan: I registered Republican ( from Whig, which I thought was a fun word ) to vote against Janklow in the Primary, but the system has always been rigged and I never got to do it, not once. Now if only Democrat candidates could see the wisdom of registering as a Republican, there would be no more Straight Ticket voting.
I disagree Cory with your assessment that Benda’s estate has no money. Were we not told by the powers to be that the dead guy (Benda) did all the misdeeds of the EB-5 and if you follow him you will find the money? By going after Benda and Benda’s estate, we may find many truths, like how he did it both in the cornfield and off the cornfield along with much detail.
This case will never go to court. Expect Marty to gag the evidence and negotiate a settlement for an undisclosed amount.
“The flurry of federal suits filed by the U.S. Securities and Exchange Commission (SEC) in the past few months against several companies and individuals for alleged fraud and false statements in soliciting foreign investors under the EB-5 Immigrant Investor Program shows that the government is taking a tougher approach to enforcement in the EB-5 space. Recent SEC suits include SEC v. Luca International Group, LLC, SEC v. Path America, LLC, SEC v. EB5 Asset Manager, LLC and SEC v. Robert Yang et al. Although the SEC’s complaints in these cases describe extreme situations involving the defendants’ misuse of investor funds to fund their own personal purchases, the securities laws invoked by the SEC have broad coverage and can be used to sanction less egregious conduct. Indeed, in some cases merely negligent misstatements to investors can trigger liability.”
Troy you naturally left out the most obvious and most likely true case-that being wingnuts have prevented Obama from pursuing wrong doers by blocking him or by defunding SEC so they have no monies for investigations/prosecutions.
And actually, that same year, in 2007, the FBI forms what it calls a partnership with the Mortgage Bankers Association — the trade association of the perps. The Mortgage Bankers Association set out — imagine the audacity — to con the FBI, and they succeeded! They ginned up this fake definition of mortgage fraud under which the lending institution was always the victim and never a perpetrator. The FBI bought into this hook, line, sinker and the boat they rode out in.
David, thanks. I am glad to know it. After the fact powers is good. To beat a dead horse, I still think these EB-5 linked “securities” need to have the quotations removed and be required to be appropriately securities under the law. Even exempt (specific legal term) securities are required to have certain standards to be offered. It is my understanding these “securities” (technically not securities by the legal definition which triggers State or Federal Securities regulatory oversight) didn’t have such an obligation to meet even minimal disclosure standards.
Several years back the SEC was claiming it was outgunned by the institutions corporate attorneys. If that’s the case, we know we are outgunned in SD.
Obligation to meet even minimal disclosure standards. So could someone in the our South Dakota government have set their own standards of disclosure and have those standards be more in line with what the SEC requires? If not, why not? Is so, why wasn’t it done?
And no-Obama didn’t try very hard to investigate Wall Street bankers. According to some members of congress,bankers own the place.
You are asking a question those 100 experts (if it is really as high as 100 in the state) I refenced above can answer. I only know enough to know I can’t hazard an assessment or even a slightly informed opinion. While securities law isn’t really complex, it does require both information on the specifics of the transaction and an understanding of the specifics of the law I don’t have.
I have heard of White Priveledge
( Bill O’Reilly though he experiences it
doesn’t believe in it)
I have seen Rebublican Priveledge
For those that don’t understand what
that is – Simply If a Democrat would do it they would be skewered
If a Republican does the same thing
it’s an Opps, small misjudgment !
( Does Gant and Assoc. fit here?
Does the “Platte Afair” fit here?
Does the the A G wearing a blind
fold but peeking with one eye fit
There used to be a TV program called
Who Do You Trust?
Today it seems Very Few!
Will the presiding Hughes county judge be a Mike Rounds appointee?
This was Rounds’ crown jewel of his administration, he was responsible for it, he touted it as a great success, and not one mention of him in any of the articles but here?! This is why we have such rampant corruption in SD. To few political reporters, and too little attention given to political issues in SD’s mainstream media.
Larry, that’s a good question about the choice of state court over federal court. The 2011 lawsuit went to federal court; maybe the litigants want to take this shot in a different venue?
I’d say they realize an out of court settlement is more likely in state court.
Troy, I can see some utility in the “buyer beware” argument, but, as with any consumer purchase, if the dealer lies to me about his product, am I not entitled to some compensation for being tricked into buying an inferior product?
Is that the only defense to which the state will be able to resort? If so, that’s an awfully thin defense. It doesn’t refute any of the statements the plaintiffs make indicting the wisdom of the entire Northern Beef Packers venture. Their arguments seem not only to indict Bollen’s interference with and poor management of NBP but also to suggest that the beef plant is still an economic boondoggle and that the current owners don’t have much more chance of making it profitable. That would undermine one of the defenses Mike Rounds and Dennis Daugaard offered in the campaign last year and continue to offer, that EB-5 investment created a valuable asset in Brown County that will someday pay off in jobs and tax revenues.
Now sure, I’m going beyond the merits of the lawsuit to the political implications, but that matters here. The plaintiffs are saying not only that the state lied to them but that the state continues to lie to us today. That’s why I wonder if the state could afford to rely on the “buyer beware” argument and instead, to save face not just in courtroom but at the polls, will have to come up with a better argument or a really quiet settlement.
Anyone know whether Larry Piersol could file a friend of the the court brief in this case?
Bret, good judge question! I would think the plaintiffs would file some recusal motions to keep Rounds appointees off the bench… but who would be left? Here’s the Sixth Circuit roster:
Troy’s analysis here is pretty much saying to the rest of us that we aren’t qualified to discuss EB-5 and that only he and handful of others are.
Therefore, Pat Powers at the Dump Site isn’t qualified either and shouldn’t write a word about the Mike Rounds Corruption Scandal
Tim Johns’ opinion is conspicuously absent from this discussion: anyone know why?
The question I was attempting to ask but so miserable failed with is this: Can an organization in disclosing information exceed the minimum requirements? Is it against the law to exceed SEC requirements when disclosing information to an investor? Your response indicates that only about 100 people in SD have the qualifications to make this determination. If an investor requests additional information on a company is that advisor required to provide this information?
Hey Mike, is the Senate seat getting “hot?
robin-the only way a lawsuit is won is 1)if the state/feds/prosecutor have the horsepower to win, or 2) the parties can afford to litigate. joop and the state have unlimited resources. unless the chinese have experienced lawyers, this may go nowhere that joop and dennis don’t want it to go. imo. the judge just sits and watches, generally, and the savvy lawyers run things. sveen is savvy. venue/jurisdiction (state v. fed ct.) was likely carefully considered by plaintiffs prior to filing. why a sx falls lawyer was picked to front the case in pierre “remains a mystery”(C) but likely nobody is left in pierre plaintiffs felt they could trust.
experience, experience, experience.
it is funny plaintiffs formed a corp to bring their case…kind of a play on words in that SDRC, Inc. is such a plaything, a fiction for joop and sveen.
I can see wingnuts in the sinate tossing Rounds under the bus. After all,if he gets the boot,another wingnut will be appointed to replace him from South Dakota. No net loss for the Giant Oil Party.
via a twitter exchange with an appellate attorney I just learned that federal judges usually order amicus briefs, not file them.
leslie – I wonder if the Sioux Falls lawyer is simply acting as local counsel for an out of state pro hace vice big gun lawyer?
troy, cory has been talking about the SEC for quite awhile.
cory can’t do it all for us. we have to stand up and take this thing away from SDGOP. why not leave the dark side? at least you come here and take the flak. it shows a malcontent in a red state?
rounds, thune, noem, daugaard, jackley, Regents and malingerers we all know, do not represent our best interests and those of our families. only those of the elites of SD are represented. Republicans couldn’t be more wrong in so many ways. more and more is the recognition in the nation that GOP is going down in flames.
if dems succeed in 2016, assuredly we have to produce in our new majority, and manage this clumsy “tanker” about in rising seas in a moral, ethical manner in the world. solving complex problems is difficult but that is the game. solving problems using guns went out with Harney’s massacre at the Blue Water, and we need to stand up to NRA, Wall Street and prosecute and legislate where possible. Citizen’s United, taking away the right to vote, racism, and fossil fuels must be eliminated for the greater good. one only need listen to rush limbaugh today for his juevinile reaction to San Bernadino to understand how foolish republican judgment has become in their struggle to maintain their stranglehold on the world.
SEC, USCIS, SDAG’s office, USA’s office, FBI, DCI have all been manipulated by misfunding and misdirecting the systems designed to protect us from the elite abuse of the system.
I thought the last election was important. This one is more so. The opposition keeps getting bigger. Kochs. RAGA (republican attoneys general). EXXON fossil fuel denial, SHELL, BP. GOP climate denial.
Obama is the best thing that ever happened to us, at the right time. I think Hillary would have done about the same job. But his team can barely deflect the republican machine.
Donald Trump is the most frightening individual I have every seen, and there are a lot of them, like Scalia. Like Trey Gowdy. Paul Ryan wants to demonize mental health to spare, again, NRA. With 99 % of the worlds assets, the bad guys can win.
Stomp republican’s into the dirt before it is too late. now, and often.
and then, on inauguration evening if republican wisdom deems political cooperation a virtue, we can give it another, reserved, watchful try.
leslie, Scalia is very smart but a bit hypocritical – meanwhile Alito and Thomas make me think of the double “f” word, “frighteningly fascist.”
Roger, I am saying there are very few people (and I am not in that group by a long ways) can answer Corey’s question on if this lawsuit creates any liability to the state. You can talk all you want about EB-5.
You asked the question well. As you can see from the responses above, a lot gets read into what I say beyond what I intend making me even more cautious. This is above my pay grade, even more so with your expanded questions. Security law is a subject non-security lawyers are cautious to give answers similar to an audit accountant defers to a tax accountant on tax advice.
shorter troy: never mind.
Rehnquist’s apostasy provoked one of Justice Antonin Scalia’s most vitriolic dissenting opinions. Joined by Justice Clarence Thomas, Scalia declared, “Today’s judgment converts Miranda from a milestone of judicial overreaching into the very Cheops’ Pyramid (or perhaps the Sphinx would be a better analogue) of judicial arrogance.”
Rehnquist’s evolution from Miranda’s leading critic to its improbable savior infuriated conservatives and confused liberals…wiki
scarily, Ted “Crazy” Cruz was Rehnquist’s clerk in ’96, and Scalia supposedly adored the chief justice before turning on him. what is he, Scalia, a constitutional texturalist-he reads the words as if he was alive at that time”. now that’s a legal fiction if i’ve ever heard one:) i am no const’l scholar.
was sitting there one day twiddling my thumbs as pro hac vice was disqualified and kornmann said at trial, “hey buddy, take over”. hadn’t even read the file.
These are just some common folks with some pretty interesting statements. N of course some silly ones.
I beg to differ that Troy is one of 8000 that has the expertise to say basically “buyer beware” in this case . Pretty obvious even to us common folk out on the Prairie that is the investment standard statement for wealthy investors such as these. It’s called who can screw who.
Because of your expertise in this field…it might be prudent to save the rhetorical paragraph that is beyond our ability to pontificate and just say “buyer beware”
We don’t have all the facts nor are seeking a legal opinion without them.
I too knew Pat Duffy and of course his response would have been qualified… but his “real” opinion probably wouldn’t have been printable.
But I do appreciate Troy comments. He adds a certain flair to the conversation that reflects some harsh truths.
I doubt any of these common folk here would have put a dollar into a meat packing plant investment in Aberdeen. A big draw casino in Deadwood?…hey THATS worth a shot. They must be pretty wise after all n qualified to opine here in MHO.
When it gets unique n and strange in my humble opinion. ..selling of citizenship. N the crazy stuff Joop did legal or not.
Troy, as Leslie and David aptly note, the SEC is taking action against EB-5 fraudsters. See also my November 7 post on such SEC actions:
…which would seem to lay precedent for the SEC to join the LP6 Claimants in boxing Bollen’s ears.
That said, I’m with Spike: I appreciate Troy’s cautions. We could use more faithful Republicans dropping by to offer their observations and keep us on our toes. There’s no need to dismiss everything Troy says as political flak; it’s more fun to refute it with facts and counterexamples. :-)
i like spike.
I believe the action pursued by the Chinese investors is a civil action, not a criminal proceeding, to get their money back from people who grossly misrepresented their project and their intentions. They claim fraud was committed. There are several flavors of fraud on state and federal law books. The crooks in the Governor’s office for are in very deep doo doo because the cheated investors have a very tight, well-documented case. The protected class in South Dakota are going to have their tree shook very hard, and it won’t be the last time.
The Racketeer Influenced and Corrupt Organizations Act has been applied to many categories of offenses over the years. The EB-5 fleecers in South Dakota and other states will surely be the next target for this valuable law enforcement tool. Here’s a good description and history of its effectiveness to go after criminal networks.
The Rounds Racketeering network has been visible for quite a while, but nobody in the Attorney General’s office is motivated to act on anything other than small potato offenders like the kid who stole the state flag and silly candidates who break the law with their nomination petitions. The case brought by the investors will blow the doors off the safe for all to see.
The SDGOP strategy is to keep you jumping in and out of rabbit holes to convince you that you are either not qualified to think or discuss these violators, or it’s too complicated for the average bear. You don’t have to play their game.
Cory’s summary at 12:51 is right on the money. Just sit back folks and watch. Call and leave Denny Daugaard a message to set aside $12 million for restitution and court costs in his budget address. The Chinese investors don’t cotton to crooks and hicks like the SDGOP must. As Warren Zevon said, the shit has hit the fan.
I’m not saying buyer beware is the only defense. My point is if that is their only list of justification for claim (your top list), it might be all that is needed. Example: “Defendants had carefully reviewed the financial information of the Project and recommended it as sufficiently sound to generate jobs and repay the loan from the investors.”
1) I’m not sure one can claim they made an investment based on such a representation from the CEO or CFO and get relief. But, I’m pretty sure you aren’t going to get relief by believing anyone else.
2) More importantly, this is exactly something that is put on the shoulder of accredited investors- assess the financial information and determine if supports repayment, etc.
On your list, in my opinion, the strongest on the list is the first half of the first one because it could come down to what is “substantially” complete. The rest probably fall under #1 (maybe CEO/CFO) and #2 (this is the investors responsibility to make those determinations).
Troy, who in the Daugaard administration actually wants this to go to court?
I have not seen the entire complaint or prayer for relief, but if the Plaintiffs actually prove fraud, I believe they can recover more than their investments – they should be awarded punitive damages on top of actual losses.
And if they show actual losses of about $20 million dollars, an award of punitive damages could be as high as $200 million dollars under current SCOTUS jurisprudence. If the complaint has not yet sought punitive damages, I think the complaint can be amended to add punitive damages, especially if discovery supports the fraud allegation. Danger looms for South Dakota and Joop Bollen
bcb-meant to say-saw a 59 melodymkr at chris. U “got anymore?” (C) “Hey Bulldog”, Beatles (last 5 seconds:)
Republicans are always trying to “get over”. Once a third of their group realizes it, we’ve got a horse race.
Oooo, bat: talk more about that?
Santa Fe…..Harrys Roadhouse or the Plaza Café
That’s living…. take Mr. Bat with you.. get some nourishment. this is gonna be a long haul.
I still would like to see mail fraud and wire fraud tied into these crooked dealings. http://www.law360.com/articles/571951/man-indicted-for-160m-hotel-scam-tied-to-visa-program
Mr. Spike, are you suggesting some sort of road trip with Lar and Mr. bat eating at roadhouses along the way? Could somebody make a spot for me and make sure we eat heavily at all the greasy spoons my friend Bob can give us on a list?
PS: I need regular stops. Lar understands. 2 hour intervals.
He will probably take away from the schools
Mr. Les, where do we sit in respect to where Lar sits with the counts of bloggings, versus the counts of Lar’s listens to his little ipod thing while he marches at the gym there in New Mexico? Mexico. Heh.
$200 million, Bearcreekbat? Holy cow—that wouldn’t just take away from schools; that would hit everything in the budget. Senator Thune better send us more highway funding.
Cory, if you look at pages 10 (“diversion of funds”) and 17-18 (“material misrepresentations”) of the Notice of Intent to Terminate, you’ll see a lot of specificity regarding diversion of LP6 investor funds and misrepresentation to LP6 investors. I have no idea if this rises (maybe descends is a better word) to the level of “fraud” as defined by South Dakota law, but at first glance it sure makes me sympathetic to the complainants.
Daugaard will announce the Medicaid Expansion now to stop the hemorrhaging.
What are you doing up at that time of the night Grudz? Someone “spike” your prune juice?
Jerry, there is so much wrong with our system in SD, hemoraging is the least of their worries. It’s the aneurism that concerns them.
I doubt the Medicare expansion is coming either. Most of the folks that could use it are not who is obvsly being catered to.
Daugaard could give a damn about the working poor. What his eyes are going to be looking at is the huge influx of moolah to the state. He is gonna need it as the Chinese are flanking him to the right with the rest of the scandals flaking him to the left. As Wellington may well have said “he will meet his Waterloo” and that ain’t Iowa.
Given Mike Rounds’ unique position as EB-5 cheerleader when gov, and now as EB-5 judge in the US Senate, there is a juicy national story here waiting for an enterprising reporter. Or should I say a series. It would all be too much for anybody to take in a single dose.
Troy, anyone: who in the Daugaard administration actually wants this to go to court?
The question of punitive damages in fraud cases raises several considerations. Joop Bollen or other individual defendants would be subject to such damages for acts in his or her private capacity that fall outside the scope of his employment by the State.
As for the State as a defendant, SD Statutes provide that the state waives sovereign immunity “to the extent such liability insurance is purchased pursuant to § 21-32-15 and to the extent coverage is afforded thereunder…” S.D.C.L § 21-32-16 (2010).
Under SD state law, however, it appears that insurance cannot cover punitive damages as a matter of public policy. This rule has been applied by the SD Division of Insurance, so it appears that the State may be off the hook for punitive damages if state law applies to the case.
Things might have been different has the Plaintiffs sued in federal court and alleged a violation of federal law. But here the Plaintiffs appear to be relying on SD law for their claim against the State, thus my initial speculation about the availability of $200 million in punitive damages against the State appears incorrect.
jerry-there is a Wellington sub-division in Cedar Rapids which isn’t that far from Waterloo. If Napoleon had Chevys(French) back then they could have invaded Waterloo in about an hour. Go up I-380 to US Hiway 20 and go west about five miles. 65-75 mph all the way.
You are correct mfi. I am going to have to be more careful with my blind usage of metaphors and fives.
Is this one of those things I remember inaccurately or not? My recollection (not an attorney):
Except for maybe constitutional violations, I think the only way a State can be sued is in that State’s court. Federal court just says “sovereign immunity” and won’t hear it. Is this correct?
Troy, that is a good point. Typically suits against a State in federal courts are permitted to enforce federal rights through declaratory and injunctive relief, but the 11th Amendment limits the right of a “citizen to sue a State in federal court seeking retroactive damages. In this case, it appears that Plaintiffs are seeking retroactive damages, hence they had to proceed in State court. (The idea that someone can sue for injunctive relief seems odd, given the explicit language of the 11th Amendment prohibiting suits “In law or equity.”)
Heck,Napoleon could’ve cut up the Cedr Valley Bike trail and trimmed the distance considerably,but, horses aren’t allowed on bike trails(paved).
These are just the Chinese investors. These SD EB-5 SDRC gang lured in investors from Canada, Korea, and India. Joop Bollen and James Park were at this from far earlier that 2007. Follow their asset accumulation and it should be very obvious.
BCB, thank you for those legal details. The state opens itself to lawsuits to the extent of its liability coverage, but insurance can’t cover punitive damages, so the plaintiffs can’t squeeze the state punitive damages. Fascinating!
The 1997 DOI document you cite says the purpose of punitive damages is to “deter wrongful conduct and to punish the wrongdoer.” Is simply getting the investors’ money back enough to deter wrongful conduct and punish GOED? Do we need some additional mechanism by which the court could punish the state? Or is the real punitive damage up to us, electing legislators and a new Governor who will fire everyone left who got us into this mess and defund GOED?
Nothing in that DOI guidance stops the plaintiffs from going after private subcontractor Joop Bollen for punitive damages, does it?
lynn should be banned. this article says nothing about SDDP yet the very 1st post (hers) comes out of the gate slamming state statistics.
can someone reveal why lynn is butt hurt and tries to damage and belittle SDDP brand? much like the immature low knowledge sara palin, imo. both function as trolls.