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SDRC Inc., Bollen May Face New Lawsuit by Stiffed EB-5 Investors

Last updated on 2015.12.03

On October 18, 2011, EB-5 investors Zhang Zhen, Feng Wei, Ma Yirong, and Yao Xiao Ping sued SDRC Inc., South Dakota Investment Fund LLC 6, and Joop Bollen for providing them with incomplete and inaccurate disclosures about the project they were investing in, Northern Beef Packers, and for mismanaging the investment fund in violation of their contract and SDIF 6's fiduciary duties. After some rotation of complainants, both sides agreed to drop the lawsuit, and Judge Karen Schreier dismissed the lawsuit without prejudice on March 27, 2012.

Without prejudice means litigants can refile their lawsuit. That lawsuit may be afoot:

NBP’s second batch of EB-5 investors, namely the 70 Chinese investors in group LP6, have organized to sue Bollen, seeking reparations for their lost investments....

According to the group’s attorney, James A. Lombardi, NBP’s EB-5 investment prospectus and memorandums are under significant suspicion of having purposely misled investors. The prospectus never divulged NBP’s financial troubles to investors, and also never showed Bollen’s previous failure with another South Dakota EB-5 program. Lombardi says that the statute of limitations on the case is six years, meaning that the suit must be filed before November of 2015 since the initial prospectuses were released in November of 2009... [Yuxuan Li (trans. Jack Chen), "NBP Scandal Rocks Chinese EB-5 Applicants," World Journal, 2014.09.04].

One member of the litigating investor group says South Dakota beef backers filled them full of bull to get their money:

Ms. Lu, one of the members of the group, said that she received a text in 2010 from an immigration middleman recommending this South Dakota, government-backed EB-5 program. At the time, the middleman touted the program as a safe, reliable, and quick route to a green card that could also recoup the initial investment within five years. Following up, Ms. Lu attended a middleman-organized meeting at a five-star hotel in Beijing, a mixer for potential investors and investees. At the meeting were ill-fated South Dakota state economic development director Richard Benda and NBP assistant Oshik Song, who pitched Chinese investors feverishly on NBP, touting it as the largest beef packing industry in America for decades with a bright future and government backing. Investors need not worry about their green cards and returns, they said [Li, 2014.09.04].

Investor Lu says that Bollen forced investors to give up some of their contractual rights in what looks like an effort to bolster White Oak Global's chances of acquiring Northern Beef Packers in bankruptcy:

According to Ms. Lu, after some of NBP’s problems surfaced, Bollen and his middlemen called a meeting with LP6 group members in Beijing, where they claimed to have received financial backing and assistance from a White Oak group based in San Francisco. At the meeting, they told Chinese investors that they must relinquish their mortgage rights and high place in the pecking order. With Bollen emphasizing that only White Oak’s assistance could get the plant working again, thus allowing the Chinese investors’ to actually receive a return as well as their green cards, LP6 had no choice but to sign over their mortgage rights [Li, 2014.09.04].

I'm still looking for more information on this new litigation. Stay tuned!


  1. Nick Nemec 2014.09.15

    Wow, is Joop Bollen somehow also connected to White Oak Global? Joop is as crooked as they come and held an important seat in the inner circle of South Dakota government with access to millions of dollars. Mike Rounds is either the naive dupe in the highest seat who was unable to place anyone in his administration who could smell a rat and point out the obvious to the king, or he's in on the fix. Take your pick, incompetent or co-conspirator, there really is no middle ground.

  2. larry kurtz 2014.09.15

    Curious how often Joop flew in Mike's plane.

  3. Rorschach 2014.09.15

    The Joopster wasn't happy taking some of these people's money. He wanted all of it. Looks like he got it. It doesn't appear to me that he was ever looking out for the best interest of the foreign investors. They walked into a con man's trap. How much did the Joopster pay Mike Rounds after Rounds left office?

  4. 96 Tears 2014.09.15

    The Joopster's pretty good at his game. He duped Larry Tidemann into thinking sanitized, edited written responses were acceptable for a major hearing on the biggest corruption scandal in South Dakota history.

  5. Rorschach 2014.09.15

    Nobody had to dupe Tidemann. He's eager to do whatever he presumes is good for the Republican Party. The governor's son-in-law could be whupping his arse with a paddle and he'd say, "Thank you sir may I have another."

  6. Roger Cornelius 2014.09.15

    This revelation pretty much shoots down Rounds and the SDGOP faux argument that sometimes investors make bad decisions about their investments.
    The mortgage transfer clearly duped the investors, they were left with no real choices on how Bollen was mishandling their money.
    Surely there were substantial processing and handling fees that Bollen added on for this part of the scam.

  7. Roger Cornelius 2014.09.15

    This is the news I've been waiting for, now we are at the crux of Bollen's conspiracy not only to defraud the state, but investors.
    When this lawsuit if filed, and I hope they do, it will provide a part of the money trail that has been missing in Bollen's conspiracy.
    Was Benda also paid advance fees to manage this part of the scam?

  8. larry kurtz 2014.09.15

    Rounds announced for US Senate and immunity at about the same time as the federal subpoena served for EB-5 records. Coinkydink?

  9. Jaka 2014.09.15

    Could Rounds gain any semblance of immunity from prosecution for his involvement by in this crime by being elected a US Senator by blindfolded SD voters?????!!!! An after election illumination of his past connections to this boondoggle would really be something. Hope it happens prior.

  10. larry kurtz 2014.09.15

    Rounds announced in late November, 2012 and the federal grand jury subpoenaed GOED on March 18, 2013.

  11. Bill Fleming 2014.09.15

    Maybe they're having a fire sale, Mike. ;-)

  12. mike from iowa 2014.09.15

    Great idea,Bill. Maybe some one should check and see if Rounds Insurance has any connections,just in case the plant gets torched for the insurance monies.

  13. Wayne F 2014.09.15

    "Mike Rounds is either the naive dupe in the highest seat who was unable to place anyone in his administration who could smell a rat and point out the obvious to the king, or he's in on the fix. Take your pick, incompetent or co-conspirator, there really is no middle ground."

    W e l l s a i d Nick Nemec.

    Reminds me of Ronald Reagan and the Iran-Contra Affair.

  14. Roger Cornelius 2014.09.15

    Bill and mike from iowa,

    You guys raised a way interesting question, who did or does hold the insurance policies on Northern Beef Packers?

    Are we going down a rabbit hole or is it a legitimate question?

  15. jerry 2014.09.15

    No more of a rabbit hole than asking about the contractors excise tax or the payments for workmen´s comp. How did that all work as well

  16. Deb Geelsdottir 2014.09.16

    Great work Cory and everyone else!

  17. Jane Smith 2014.09.17

    I hope the investors do file the lawsuit against Joopster for several reasons. For one to eliminate the crazy notion that a Chinese mafia knocked off Benda. The few facts published about the case seem like a coverup rather than enrage. Secondly, it is clear that the Joopster used his charm to dupe or rather threaten these people to manipulate them. Thirdly, if the legislature won't do its job to hold its public officers accountable, perhaps the truth can be brought to light by private parties. Clearly as competition was part of this whole fiasco, how much did these investors pay in excess of the stated fees, to get on top of the pick list. Or "be in favor" as it is politely called. Money that went strait to the Joopster no doubt.

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