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Vermont Wins $163M in Settlements from Financiers in EB-5 Scandal

In another reminder of how much harder Vermont has tackled EB-5 corruption than South Dakota, Vermont Governor Phil Scott held a press conference Thursday to announce that financial firm Raymond James has agreed to pay $150 million to settle charges that it helped Miami businessman Ariel Quiros skim hundreds of millions of dollars from Vermont’s EB-5 program for his personal use. This settlement follows an October 2016 $13.3 million settlement by Citibank, which helped finance Quiros, to keep its fat out of the fraud case fire.

Quiros goes on trial in September 2018.

Meanwhile in South Dakota, the state has let EB-5 czar Joop Bollen off with non-punitive settlements of lawsuits and a $2,000 plea bargain in the only criminal case to arise from our EB-5 scandal. EB-5 watchdog David North finds the South Dakota prosecutions surprisingly weak compared to Vermont’s:

Meanwhile, in a somewhat parallel case in South Dakota, the one other state that had, for a while, a state entity serving as the regional center, there has been no such relief. If anything the South Dakota case was much more egregious than the one in Vermont.

More money was lost or stolen, more projects failed, the state’s political leaders were deeply involved in some aspects of the case, a key player was found dead (his shotgun wound in the stomach was ruled a suicide by the State’s Attorney General), a mysterious multi-million-dollar payment was made to a bank account in Cyprus owned by a Russian railroad oligarch, and a state criminal indictment of another key play, Joop Bollen, ended with an extremely generous plea bargain including no jail time and a $2,000 fine, as has been previously reported (see here and here) [David North, “Big Finance Firms Pony Up in Vt. EB-5 Case — Nothing Similar in S.D.,” Center for Immigration Studies, 2017.04.14].

North cocks an eyebrow at South Dakota’s U.S. Attorney Randy Seiler for taking no action on South Dakota’s EB-5 scandal. We’ll see what voters think of state Attorney General Marty Jackley’s relatively gentle treatment of South Dakota’s EB-5 scandal compared to Vermont’s more vigorous prosecution of EB-5 improprieties.

Bonus Political Connection: Don’t forget—Donald Trump appears to have profited from the Vermont EB-5 scandal: among Quiros’s many challenged expenditures is a $2.2-million condo in Trump Tower New York. It remains to be seen whether anyone can connect the dots from South Dakota’s EB-5 program through Northern Beef Packers, Ultracare Holdings Limited of Cyprus that received $1.5 million from NBP, and Ultracare’s Russian owner Globaltrans Investment Inc. to Donald Trump’s friends in Russia.

7 Comments

  1. Lora Hubbel 2017-04-17

    Once again Cory, you did some great detective work. Im going to ask a question you may have already answered and I may have missed along the way…but after talking to Joop Bollen, Im inclined to think that Joop was just a front man. Joop may have been a well-paid front man, but a stool pigeon just the same. After our conversation I think the State knew and blessed everything he did. Dumping the money loss on Joop just stops further investigation of the bigger players behind him. Have you researched that? Again, I may have missed it if you have.

  2. Roger Elgersma 2017-04-17

    Those who gave Bollen the chance to make so much money legally are corrupt, but they will not prosecute themselves. they are so busy trying to privatize things that they forgot that huge profits reduce efficiency.

  3. Cory Allen Heidelberger Post author | 2017-04-17

    Lora, you have spoken with Joop Bollen? Tell us more!

    Bollen as front man, meaning he wasn’t really in charge of what was going on? Given his active role in EB-5, I don’t think he was just a figurehead. He made things happen that Rounds and Benda by themselves could not. But he acted with the knowledge and blessing of the Rounds administration. He would certainly know who all did what, which makes the state’s gamble on prosecuting him seem somewhat risky. They seem to have had all the fall guy they needed in Benda. They didn’t really need to put on a show for the feds when USCIS first yanked EB-5 status, because they knew the jig was up and didn’t want to risk EB-5 again. Suing SDRC Inc. and charging Bollen didn’t seem to advance their cause, and if Bollen hadn’t pled and settled, they’d have faced ugly public exposure and negative publicity for Jackley through the 2018 election that they only would have brought on themselves. Maybe I’m missing something in the game, but the Bollen plea deal seems to have given the state any advantages worth pursuing.

  4. Lora Hubbel 2017-04-17

    All I know is what he told me….granted a bias source. I was not familiar with all the names and terms he used, but i do recall he was upset about the huge amount of STATE money he had in his account at the end of the year. He complained to (Costello?) that he needed it out of his account and into the state coffers or otherwise he would have to pay income tax on it. He said that he was told to just keep it in his account and pay the tax. The state would make it right with him. He then said something to the effect of how dumb of the state for wasting money like that.

  5. John 2017-04-17

    The State of South Dakota is too cowardly to put those involved with EB-5 on the witness stand. Apparently if ones an “R” any justice is puffball in South Dakota.

  6. grudznick 2017-04-17

    What we need is not the GOASK committee to go asking, we need Ms. Hubbel to just run her own investigation on the employees in the departments involved. Call some up, walk in and ask some of them questions, somebody will crack.

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