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Bollen Made $13M Freelancing on Illegal EB-5 Contract: Take It Back!

Before we pass a regressive tax to increase teacher pay, I know where we can get $13 million to boost our K-12 budget: Joop Bollen's pocket.

Doing some excellent math, Denise Ross figures that Joop Bollen made $13 million in fees on EB-5 transactions in 2009 alone from the 99 foreign investors who kept the Dakota Provision turkey plant in Huron afloat. Bollen made this money processing those foreign investments through his private company, SDRC Inc., into a loan package for his lawyer Jeff Sveen's favorite turkey factory.

Funny thing is, SDRC Inc. did this work under a 2008 memorandum of understanding signed with the South Dakota International Business Institute, the state office that Joop Bollen directed as a public employee from 1994 until the end of 2009. Even if we overlook the absurdity and conflictuality of Bollen's signing this no-bid contract with his own nascent company, there is one other glaring problem with the SDIBI-SDRC Inc. deal: Bollen had no authority to sign this contract. Bollen was technically an employee of the Board of Regents on the Northern State University campus. According to testimony in the Darley v. SDIBI arbitration from NSU counsel John Meyer and BOR counsel James Shekleton, no one ever granted Joop Bollen or SDIBI contract-making authority. To have any legal force, the SDIBI-SDRC Inc. contract would have to have undergone review and approval by the Board of Regents.

In other words, Bollen expropriated the authority of NSU's then-president Patrick Schloss and absconded with $13 million made while he did illegal business from a state office.

That $13 million in fees isn't Bollen's. It's ours. It's time to send the Attorney General knocking on Bollen's door to get that money back.


  1. Mark Remily 2014.10.27

    While he is at it, he can pay back Aberdeen Small business and the work force which lost a total of $1,948,835.00 in services rendered.

  2. jerry 2014.10.27

    I used to wonder why judges are elected here in South Dakota as I always thought law was not supposed to be influenced by what political party you belonged to. I see the expensive signage up all over the place for the election of supposed non partisan judges. Of course, it is clear what the reasoning is and why it is so important to completely engulf the system to keep the corruption alive. If this blatant theft of taxpayer money is not a concern for law and order in our state, then keep electing republican judges to report to republican attorney generals and expect the same results.

  3. Lanny V Stricherz 2014.10.27

    Jerry, I was recently at breakfast at the local #1 breakfast eatery in Sioux Falls, when quite a few Republicans were walking up and down from the back room, where the local Pubs were apparently schmoozing a lot of elderly seniors, who had bucks. I noticed among the signs that they were carrying out to their cars, were signs for the circuit judge election. Your point is well taken. I only wish I could remember for whom those signs were politicking. One can go to the several sites in SF that have Republican only signs and see which judge signs are there to get an idea, I would suppose.

  4. Lanny V Stricherz 2014.10.27

    Cory, To your point, that only includes 2009. The point that I made on another blog post on Madville, that no one has jumped in with any suppositions, and I would still like to see if anyone else has any ideas on the subject.

    Go back to the part of your editorial, that suggests that SDRC was set up as a no bid contract with the new owner of the company being the sole signer of the contract. As I stated on that previous post, I have wondered for a long time, how that could be possible and how no one else knew that he had done that. I further extrapolated, that maybe he did have partners in the scheme and the more than 100 million that was taken in the 30k annual fees on each 500k greencard, was then divided up amongst the silent partners in the scheme.

    Anyone have any ideas?

  5. Catherine Ratliff 2014.10.27

    I just want to know why this cash cow was spun off to a crony instead of the state making money from EB-5.

  6. jerry 2014.10.27

    Maybe because of the legality of the way it was done Catherine Ratliff, caused them to spin it. Maybe Benda caught on and wanted a payoff and got the million to go along with whatever else he got. Rounds did not hesitate to write him the check for the million no matter how he spins it.

  7. bearcreekbat 2014.10.27

    Jerry, I don't quite get your criticism of SD judges. Judges don't bring charges nor enforce the law. SD Judges are not accountable to the SD Attorney General.

    Rather, SD Judges adjudicate disputes between various parties, including the state and federal agencies. SD Judges rule on legal motions by the parties and conduct jury trials to resolve factual disputes. SD Judges might have political views and preferences, but they are sworn to set those aside and base any judicial decision on the law and whatever facts are established at trial.

    Perhaps there is a decision that was made by a SD judge that you disagree with and think to be political in nature? It is always possible that a Judge will violate the terms of his or her oath, but we have not really seen much of that here in SD that I am aware of from our elected judges. Indeed, the Justices that have the worst political reputation are the unelected Justices of the SCOTUS.

  8. Lanny V Stricherz 2014.10.27

    I sure hope you are right bearcreekbat. I am going to go down to Karen Schreier's courtroom this afternoon and see what she has to see what she has to say about Jeff Barth's petition.

  9. Les 2014.10.27

    Judges know who butters their bread. For most that doesn't matter and they do a proper job.
    We sued the county and state(dept revenue) three times to get equality and enforcement of that on property taxation, twice going to the SD supremes and winning in Pierre on both occasions. They reprimanded the states attorney for not ensuring enforcement of their decision but, there had to be judges that agreed to be overruled by the SD supremes knowing the prior outcome to a case decision that was not being enforced.

  10. bearcreekbat 2014.10.27

    Lanny, over time I have disagreed with some of Judge Schreier's decisions, but I have never sensed that any of her rulings were based on her political beliefs rather than her perception of the law. By the way, as a federal judge, Judge Schreier was not elected, she was appointed after being nominated by President Clinton and approved by the Senate by a bipartisan vote of 94-4.

  11. jerry 2014.10.27

    Allow me to expand. Judges are supposed to be impartial, how can they be if they are the direct representation of a political party that funds their election. How can they be impartial if they hear a case regarding an unfavorable outcome for one of the party's faithful that has given large funding to the judge?

    While you say that they are all honest and above approach, history dictates a different story. 30 some states have decided to go a different route. Here is one:

    Missouri Nonpartisan Court Plan

    During the 1930s, the public became increasingly dissatisfied with the increasing role of politics in judicial selection and judicial decision-making. Judges were plagued by outside influences due to the political aspects of the election process, and dockets were congested due to time the judges spent campaigning.

    Then, in November 1940, voters amended the Missouri constitution by adopting the "Nonpartisan Selection of Judges Court Plan," which was placed on the ballot by initiative petition. The adoption of the plan by initiative referendum resulted from a public backlash against the widespread abuses of the judicial system by the "Boss Tom" Pendergast political machine in Kansas City and by the political control exhibited by ward bosses in St. Louis.

    The Missouri nonpartisan court plan, commonly called the Missouri Plan, since has served as a national model for the selection of judges and has been adopted in more than 30 other states.

    I would argue that given the circumstances of the way this EB-5 scandal has gone on for this length of time without any kind of judiciary involvement, warrants a different way to select judges. We must have law and order to keep our state from the continuation of this lawlessness we are now witnessing at the highest levels.

  12. Roger Cornelius 2014.10.27

    $13.5 million, wouldn't that make Joop Bollen the highest paid state employee?

  13. Shirley schwab 2014.10.27

    Roger - and let's not forget Bollen was also collecting a state paycheck with all the state benefits as well.

    Just can't make this stuff up!!

  14. jerry 2014.10.27

    It looks like Rory King implies that Joop Bolleen and Mike Rounds did one helluva job with the beef plant and that it made money, until it stopped making money or some kind of rabbit trail like that. Here is part of what he said, "

    It was the foresight and drive of Mike Rounds and his administration which brought well more than $400 million into South Dakota, resulting in the creation, directly or indirectly, of more than 8,000 jobs. It is unfortunate that Northern Beef could not make it first time around. Because of changed conditions, the company was just unable to raise the operating capital needed to sustain its operations.

    That wasn’t the fault of Mike Rounds. Aberdeen will have a thriving beef processing facility in the near future, providing tremendous benefits to the entire region, and the state has attracted millions of dollars of investment capital for other businesses because the Rounds administration had the foresight to support the federal EB-5 program."

    There you go, see nothing happened. All is well, the state made 400 million bucks and instead of 5,000 jobs, King says 8,000 jobs. It just keeps getting better. Soon, Daugaard will come out and say that his and Rounds EB-5 program created some 25,000 jobs and we have had to outsource them.

  15. bearcreekbat 2014.10.27

    Jerry, thanks for your thoughtful response. SD follows a rule of non-partisan elections, which prohibits indicating a candidate's political affiliation on the ballet.

    My earlier comment about SD judges did not intend to assert that all of our judges are honest and above reproach, after all they are only human beings. My experience has been that the vast majority of SD judges I have dealt with are honest individuals and would not allow their political beliefs to influence the outcome of any case. That said, there are always exceptions to the rule, and I have seen the exceptions come into play on occasion.

    I will speculate that under the Missouri plan you described, virtually all the Judges selected for office have political beliefs and inclinations, just as other elected or appointed judges have. Hopefully, most judges don't let their personal views influence their decisions in particular cases, but that will not always be the case. For example, Alabama's Judge Roy Moore expressly allows his religious views to influence his judicial decisions, although I do not know if Alabama follows the Missouri plan.

    The only way the SD judiciary could become involved in the EB-5 case would be through criminal charges filed by the AG, or a local States Attorney, or through a civil action filed by the State or a private individual or group. Indeed, our SD Judges normally cannot even participate in Grand Jury proceedings, that is left up to the prosecutor.

  16. jerry 2014.10.27

    I have never forgotten how the judicial system works here with the attorney general's office. It takes all kinds to make corruption work, with may hands in the flour to make the cake before baking.

    All of this creates an atmosphere of anything goes. The EB-5 would have never been so destructive had it not been for those who knew but looked the other way, in other words, the very top of the heap. We certainly do not need to keep saying that one should not question the political beliefs of those that adjudicate the public.

  17. Les 2014.10.27

    You took the words out of my mouth, Jerry. Brandon and Shirley were terrorized by our state government for protecting children's rights. This alone should vote out the system in place.
    For the life of me I cannot understand how there wasn't a recall on this issue alone!

  18. 96Tears 2014.10.27

    just as every cop is a criminal and all the sinners are saints ...

  19. Jana 2014.10.27

    This just another glaring example, much like the Lake Sharpe Rob and Mike making money from the state's taxpayers that shows how much the GOP establishment in Pierre sees governing as their own little sandbox and cash register.

  20. Undertaker 2014.10.27

    I think a centrally located beef plant in the state would have been a better plan. I understand that Bollen has more than 200 properties in Aberdeen. Lot's of apartments for college students or maybe??? foreign investor's young adults???? This whole thing stinks but the voters of this state will not get it. On another note I watched the congressional debate. Kristi is what I call a computer chip candidate, programed to memorize any question. When asked why she voted against the Violence Against Women's Act, she stated that there were other reforms that she didn't agree with but she couldn't remember those reforms. So what is more important in the form of a reform that would make you not want to vote for the main freaking part of the Legislation and then not know the reforms. UNBELIEVABLE :( :(

  21. Steve Sibson 2014.10.27

    "I just want to know why this cash cow was spun off to a crony instead of the state making money from EB-5."

    I think we are missing this point made by Denise (From Cory's link):

    "In South Dakota, EB-5 had been a state-run operation that charged no fees from 2004 up until January 2008. When SDRC Inc. began operating the program, thousands of dollars in fees were charged to each investor."

    South Dakota wasn't charging fees. Would that have been a problem if they did? Is that why they took it public, sop they could charge fees. ANd then comes the question, who has been getting all those fees? Again, fron Denise's column:

    'The deposition, taken April 16, 2014, was given by Joop Bollen, the now well-known state employee who moved EB-5 operations from the state to SDRC Inc. — the company that he managed and co-owned — in a Jan. 15, 2008, contract he signed on behalf of the state.

    It's not publicly known who the other owners of SDRC Inc. are, but in his deposition, Bollen stated: "I'm the part-owner and I manage it."'

    So because the SDRC is private, it is impossible to know everything that is going on in this public/private partnerships, the foundation to the system of legal corruption.

  22. Steve Sibson 2014.10.27

    "Is that why they took it public, sop they could charge fees."

    Sorry about being in a hurry, I meant to say "took it private, so"

  23. grudznick 2014.10.27

    Mr. Sibby, do you want your government operating for-profit businesses? If so, what if they decide to start charging you huge fees every time you want to get on a state highway? Not just gas taxing but $25 flat tax to drive on Hwy 37. What if they charged you way more than it cost them to plow your roads? What if they sent troopers out armed with new $500 fines for driving 1 mph above the limit and followed you around? They could make all sorts of money and save our tax crisis.

  24. Les 2014.10.27

    I'm guessing the FBI knows or will know the silent partners, Sib.
    I've heard talk they're gonna charge you up front on ur casket, Grud. Lead lined so you can't do wireless blogging.

  25. caheidelberger Post author | 2014.10.27

    Undertaker: centrally located? How about putting that beef plant in Mission, or Eagle Butte?

  26. Lanny V Stricherz 2014.10.27

    Les, that is the greatest comment ever on Madville. That has to go in the hall of fame quotes on Madville Times.

  27. mike from iowa 2014.10.27

    Sibby-you just now noticed you contradict yourself?

  28. grudznick 2014.10.27

    You fellows will all be my pallbearers. Beef up, boys.

  29. mike from iowa 2014.10.27

    Why no recalls? If it fits Rounds idea of good for the state,he recalls every detail,many of which aren't true. If it is bad for Rounds,he can't seem to recall anything about it.

  30. grudznick 2014.10.27

    Mr. H, are you going to post a blogging about Mr. Weiland's press conference this afternoon? PP seems to have already. I would think you have a different spin on this event. I know Mr. Pressler is scratching his head wondering what's going on, or is on the phone with his handlers.

  31. Lanny V Stricherz 2014.10.27

    Ain't gonna happen with me Grudz. We buried one of my highschool classmates about 15 years ago, and he weighed about half of what you do. I was on the left front of the casket and I am right handed. We had to carry him down the front steps of St Joseph's Cathedral here in Sioux Falls and I nearly dropped my end by the time we got to the bottom of the steps. I said right then and there, that if Grudz or anyone else wants me for a pallbearer, I ain't gonna do it. So forget it. Besides I have already beefed up and am trying to cut down.

  32. Lanny V Stricherz 2014.10.27

    Whoops, I mean, I was on the right front of the casket.

  33. Sid 2014.10.27

    Gentlemen and Gentleladies- the key here is to keep one's eye on the proper ball. While the fees collected are somewhat obscene, they alone are not where the criminality happened. (even though they may have been the motivation)
    The criminality was that Bollen (and his fellow equity holders) were publicizing on their website that the State of South Dakota had and was vetting and endorsing these projects when the reality was that the state had not done so. When sworn, Bollen denied the state did any due diligence. While this alone would not support a perjury prosecution, it does constitute an admission of fraud.

  34. Jenny 2014.10.27

    You boys make me wonder how much the old boy weighs now.

  35. Les 2014.10.27

    And, we have been beaten into submission on ethics holding any moral or political value, Sid.

  36. Lanny V Stricherz 2014.10.27

    Jenny, pay no attention to my comment. I have never met Grudz, nor do I have any idea what he looks like much less weighs. I was just funning him based on the thread started by Les.

  37. larry kurtz 2014.10.27

    If no laws were broken it didn't happen: right, Less?

  38. Roger Cornelius 2014.10.27

    Bollen has made $13 million off of one EB-5 project, we don't have the final numbers on all projects, I don't believe.

    Ever wonder why South Dakota Republican politicians are never hurting for campaign donations?

  39. Jane 2014.10.27

    Double dealing is what Bollen and his "other partners" we're doing. "Other partners" could they possibly be Pyush Patel of Griffen GA, James J. Park, Austin Kim among others? Double dealing as in proclaiming that the EB-5 in SD is backed by the state, when it was not - at least not according to GOED or Rounds. Telling the state it's a Fed program, so it does not benefit financially or otherwise. All the while fleecing the fees for themselves. Hopefully FBI will get to the bottom of this complex web of deceit.

  40. Sid 2014.10.27

    Of course, lost in all of this is "who were the other owners of SDRC, Inc. ?" If they profited from the 13 million, or whatever the final figure was, and, if they held a fiduciary relationship with Dakota Provisions, then they either turned that money over to Dakota Provisions (or a related entity) or they breached their duty to Dakota Provisions; Unless the board of Dakota Provisions signed off on it, in which case, the investors were not informed by the board or SDRC that their "fees" were being used to pay off insiders at the Turkey Plant. If the latter, then the board members/owners of the Turkey Plant may be liable to repay the purloined funds.
    Perhaps the answer to this conundrum can be found by re-examining what happened with the first 35 million in EB-5 money which went into the Beef Plant. Roughly ten percent of those funds were required (by Mr. Bollen) to be sent to offshore accounts in the Cayman Islands. Following that, the Beef Plant suffered delays, many of which were created by the State. As a direct result, the original owners of the Beef plant were forced to transfer ownership to an entity supposedly controlled by the original Korean EB-5 investors, yet the transfer took place at Mr. Sveen's office and gave effective control over the Beef Plant project to SDRC and its cohorts. After all of which, the EB-5 money pipeline was opened to the point that money was transferred into the Beef Plant from escrow even before the conditional green cards were approved (in clear violation of the escrow terms) and, now the plant is bankrupt, wiping out all those debts. So, applying that to Dakota Provisions, who knows how much money may have been diverted from "job creation" at the Turkey Plant since the insiders had control of both the incoming monies and the recipient of those monies. AND, just who was on the receiving end of those offshore transfers? The owners of SDRC? or Chinese Communists? The former USCIS official (and EB-5 expert) who worked for SDRC? or perhaps others whose names would be familiar at this juncture. The answer to these few questions will likely explain everything with great clarity.

  41. Les 2014.10.28

    Engineered to fail for obvious reasons, Sid?

  42. leslie 2014.10.28

    When was Joop's last monthly report to his state employer? can we see it? How would those numbers have changed for the next reporting period? That one doc. should prove the fraud.

  43. jerry 2014.10.28

    Excellent Sid, your connecting of the dots make the case of a ponzi scheme. It looks as if Benda would not have wanted a bigger share of the pie, this thing could have gone on forever. Rounds clearly loved this cash cow and so did Daugaard. Benda was the weak link and it cost him dearly.

  44. Jane 2014.10.28

    Wonder what his ex-wife got as part of the divorce settlement. If what was pilaged from state doesnt belong to Bollen, it wasnt his to give. Right?

  45. Douglas Wiken 2014.10.29

    Denise Ross's story on the connections and coverups was in the "Green Sheet" that gets distributed via farm and implement stores. Some farmers and ranchers may get the news even if they don't subscribe to a daily paper.

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