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SDRC Inc. Stretched Truth about Northern Beef Packers to 2010 EB-5 Investors

Last updated on 2016.09.05

SDRC Inc., the private company state employee Joop Bollen created to make big money on EB-5 investments in South Dakota, created an offering memorandum on January 10, 2010, that pitched Northern Beef Packers to EB-5 visa investors. That offering memorandum was appended as Schedule 10 to the Northern Beef Packers–Epoch Star loan agreement of March 18, 2010.

That offering memorandum explains why NBP needs the new loan fund into which SDRC Inc. would place the EB-5 funds it was soliciting:

The Funded Business, Northern Beef Packers Limited Partnership ("NBP LP"), is a South Dakota Limited Partnership formed in April, 2007. It was established in order to build a state-of-the-art beef processing facility in South Dakota through investment of local managing partners and seventy (70) EB-5 investors seeing immigration to the U.S. This facility is designed to process over 7,500 head a week on a single shift and up to 20,000 head a week on a double or triple shifts, and other associated facilities are to be managed and operated by NBP LP. According to original plan, the construction was planned for completion in 2009. However, in the course of development, the completion date was postponed due to expansion of the business which additionally included construction of rendering plant and waste facilities. In order to facilitate new construction and operating cost, the Funded Business plans to receive additional financing from the Limited Partnership [SDRC Inc., offering memorandum, 2010.01.10, included as Schedule 10 to NBP–Epoch Star loan agreement, 2010.03.18].

There are two key lines of bunk in this pitch. First, 2009 was not the originally planned completion date. A pitch apparently prepared by SDRC Inc. partner Hanul Professional Law Corp. in 2007 says "The construction will start from May 2007 and plans to be completed by April 2008 in Aberdeen, South Dakota."

Second, rarely have I heard the delays at NBP attributed to an expanding business plan. Delays in the construction of Northern Beef Packers came from a host of factors: "financial issues, local opposition, the recession, and flooding."

As with so many of the affairs of SDRC Inc. and Northern Beef Packers, this 2010 investor pitch appears to be another load of bull.

p.s.: This detail may be entirely trivial, but that Hanul 2007 pitch represents to investors that Northern Beef Packers would have an April 2008 completion date, a total estimated business cost of $52 million to $55 million, and an estimated workforce of 600 to 700. Section 3.2 of the Northern Beef Packers–Epoch Star March 2010 lending agreement avers that "...Borrower has made no representation, warranty, or covenant to any 2008 EB-5 investor or other third party concerning the completion date, cost of construction of the Improvements, the date of commencement of Borrower's business as a packer at the Property, or the number of jobs to be created following commencement of the business."

But hey, since Northern Beef Packers bought Epoch Star eight months after making that agreement, I guess there's no one left to complain about that contradiction, is there?

Notice also that while the Hanul 2007 pitch claims 600 to 700 jobs, the 2010 offering memorandum claims NBP will create 563 jobs. It also pegs the total cost at $95,583,691. Hmm... expand operations, but create fewer jobs....


  1. Francis Schaffer 2014.10.14

    So why hasn't South Dakota's Governor's office gone after the fees collected as part of the EB-5 investment program prior to the contract between Richard Benda and Joop Bollen? Those fees belong to the people of South Dakota in my opinion as Bollen was an employee of the State. Where are the actual books for SDIBI/DEDR? To whom was Bollen accountable? It would seem that these are not privileged information. Sorry for the rambling, but I am tired of bullies running things.

  2. jerry 2014.10.14

    Only in Mike Rounds la la land can you expand a business by creating fewer jobs is spot on. This was a ponzi scheme of epic proportions that was blessed by Mike Rounds and seconded by Dennis Daugaard. They and their henchmen, fleeced the investors by putting the full faith of the state of South Dakota on the line. Somewhere in their prison cells, Bernie Madow and Allen Stanford, gaze with appreciation to the Rounds and Daugaard team.

    They appreciate the fact that these two hustlers were able to hide behind state resources to fleece the investors, great work if you can get it.

  3. jerry 2014.10.14

    er Bernie Madoff to correct, not Bernie Madow

  4. JeniW 2014.10.14

    Maybe "Mad ow" is correct. :)

  5. Roger Cornelius 2014.10.14

    About recovering that $140 million in immigration fees, the way South Dakota Republicans do things would be to spend to $180 million in attorney fees to collect $140 million in missing fees.
    The next step in the Republican recovery process is when they the attorney's get paid, they in turn make hefty financial contributions to the SDGOP and their candidates.

  6. Francis Schaffer 2014.10.14

    Yes, Roger that would be nice and I agree about hush money to the SDGOP. This just confirms that shame is not possible for some.

  7. Lanny V Stricherz 2014.10.14

    Francis, your first comment hits the nail on the head. Also, seems like figuring State's annual production and not even including the losses suffered in last year's blizzard, it would take about two to three years to have slaughtered the entire State herd at 20,000 head a week.

  8. lesliengland 2014.10.18

    was the prospectus after the "korea 70" or the following "china 55" or the next "china 50" investors, disclosing the pertinent previous slaughterhouse failures? Fraud??

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