In the brush-off to the Legislature's Government Operations and Audit Committee that he pens for former state employee and EB-5 profiteer Joop Bollen, lawyer Jeffrey T. Sveen makes this claim about Bollen's EB-5 management company:
SDRC, Inc. has previously provided information to government authorities when requested to do so. As the Committee is aware, an audit by the State of South Dakota has shown that all funds administered by SDRC, Inc., were properly applied [Jeffrey T. Sveen, letter to Senator Larry Tidemann, 2014.09.08].
Really? Let's review what that state audit from February 12, 2014, said about SDRC Inc.:
Finding No. 2003-001:
The former Department of Tourism and State Development (DTSD) and the current Governor’s Office of Economic Development’s (GOED) policies and procedures were inadequate for the monitoring of the contract with the SDRC Inc.
- ...Although the SDRC was providing to the DTSD a monthly e-mail containing a report and the balances in the two funds, the report was not sufficient to ascertain that the correct amounts were being collected and deposited and copies of bank statements did not accompany the e-mail to corroborate the balances being reported.
- Documentation was not adequate to determine whether the DTSD or the GOED was receiving the books, records and reports that were required to be provided to the CIS by the SDRC.
- Inadequate internal controls existed over the payment of expenses from the Expense Fund. Five disbursements were made from the Expense Fund totaling $67,259.97. The invoices were signed by the former Secretary of the DTSD and the DSTD’s Administration Director. The invoices identified the expenses as being for meals, lodging and transportation. Other than the information contained in the invoices, there was no supporting documentation retained to evidence that the expenses were incurred, who incurred the expenses, or the purpose of the expenses.
- The DTSD and GOED did not report Indemnification Fund One and the Expense Fund in the State’s Comprehensive Annual Financial Reports for FY2010 through FY2012.
As a result, there existed a potential for the loss of assets and two funds were not properly reported in the State’s Comprehensive Annual Financial Report [Department of Legislative Audit, "Governmental Funds of the South Dakota Governor's Office of Economic Development: Audit Report," 2014.02.12].
As I noted in my February analysis of the audit, "loss of assets" is a brilliant euphemism for theft.
Auditor General Martin L. Guindon also emphasized in his report the audit transmittal letter that his office only reviewed only the expense and indemnification funds SDRC Inc. managed for the state, not the entirety of money managed by SDRC Inc.
Sveen and Bollen's claim is thus false. The state audit did not show that "all funds administered by SDRC, Inc., were properly applied." The audit showed that Bollen told the state that its portion of SDRC Inc's business was being handled properly, but he did not provide sufficient evidence to prove that claim.
And in arrogantly rejecting Senator Larry Tidemann's invitation-not-subpoena to testify before the Government Operations and Audit Committee, Bollen is again refusing to provide that evidence and doing so by telling us... something less than the truth.
Chairman Tidemann, are you ready to issue that subpoena yet?14 comments