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Mike Rounds’s EB-5 Czar Lied to Federal Officials

Yesterday the Rapid City Journal endorsed the idea that the EB-5 scandal is all you need to disqualify Mike Rounds from consideration for your vote for U.S. Senate.

Here's one more example of the corruption that took place in Rounds's EB-5 visa investment program while he was governor: his EB-5 czar lied to U.S. Customs and Immigration Officials.

On December 20, 2009, Rounds's handpicked EB-5 director, Joop Bollen, wrote a letter to Barbara Q. Velarde, a USCIS official in charge of EB-5 matters. Bollen was responding to a request from Velarde dated December 1, 2009, seeking verification that South Dakota's EB-5 program was complying with federal statute.

In the December 20 letter, Bollen gives USCIS notice of the curious revolving door through which he's about to walk:

Joop Bollen, letter to Barbara Q. Velarde, USCIS, 2009.12.20, excerpt (click to enlarge)
Joop Bollen, letter to Barbara Q. Velarde, USCIS, 2009.12.20, excerpt (click to enlarge)

Recall the timeline: the next day, December 21, Bollen would quit his state job as director of the South Dakota International Business Institute and walk off the Northern State University campus with five boxes of state property. The day after that, December 22, the Governor's Office of Economic Development would issue Bollen a no-bid contract to do as a private corporation (SDRC Inc.) the same EB-5 work he'd done as a state employee.

So on December 20, 2009, Bollen tells USCIS, "Mr. Joop Bollen, the current Director of SDIBI, will assume management of SDRC Inc as per December 22, 2009."

But Joop Bollen did not assume management of SDRC Inc. on December 22, 2009. Bollen had been running SDRC Inc. from the day he incorporated it, January 10, 2008.

Bollen's active management of SDRC Inc. is demonstrated by several e-mails and invoices involving Bollen and SDRC Inc. finances:

  1. On April 28, 2009, Bollen sends two SDRC Inc. investor recruiter invoices to Gretchan Cleveland at Great Western Bank and tells Cleveland to process only one of them.
  2. On June 10, 2009, Bollen receives a recruiter invoice and an inquiry from SDRC Inc. Marketing Director Joe Jin (a.k.a. Joe Kim) asking if they should simply withhold legal fees from a commission and remit the balance.
  3. On November 2, 2009, Bollen tells Cleveland to process two SDRC Inc. recruiter invoices worth $160,000.

These e-mails show Bollen assumed management of SDRC Inc. well before he told USCIS he was doing so. These e-mails demonstrate that, in a document intended to prove that South Dakota's EB-5 program was complying with the law, Joop Bollen lied to federal officials.

Lying to federal officials is a violation of federal law. It may not be the worst of the violations committed by Mike Rounds's EB-5 czar, but it certainly could be part of why the FBI continues to investigate what happened in South Dakota under Mike Rounds's watch.

Bonus Howler: In the December 20, 2009, letter to Velarde, Bollen includes a chart showing all South Dakota EB-5 projects to date and their expected direct and indirect job creation. The number given for "SDIF LP2," the fund investing 65 EB-5 visa investors' $32.5 million in the Deadwood Mountain Grand Casino: 1,265.

The Deadwood Mountain Grand planned to hire 150 workers for its grand opening on July 1, 2011. current population of Deadwood is 1,288.


  1. Francis Schaffer 2014.11.03

    I notice on the SDRC, Inc website it mentions SDIF LP6 and LP9 bankruptcy updates. Cory, any idea what projects those where 'financing'?

  2. caheidelberger Post author | 2014.11.03

    SDIF LP6 and SDIF LP9 were the second and third rounds of EB-5 investment in Northern Beef Packers: total $60 million from 120 Chinese investors.

  3. Nick 2014.11.03

    SDIF LP6 was for Northern Beef

  4. Francis Schaffer 2014.11.03

    Thanks, so some of that paid off prior loans and did create any actual jobs?

  5. Francis Schaffer 2014.11.03

    Should have been, did not create any actual jobs

  6. 96Tears 2014.11.03

    The beauty of Rounds' Racketeering Scam is that on Wednesday, there is no more rush to dig and learn more of what exactly Rounds' role was a lead racketeer. We can take our sweet time and dig and match the pieces out there with the record of criminality that Mike Rounds led. We can also find out how the infection spread into the Daugaard regime and detail how and why Marty Jackley became the White Washer in Chief.

    This does not end at 7 p.m. Tuesday. Nor should it.

  7. Bill Fleming 2014.11.03

    96, just thinking out loud, won't the chances of it 'not ending' actually INCREASE if Rounds wins? i.e. If he loses, it moves off the media's front burner and becomes background noise?

  8. 96Tears 2014.11.03

    You’re right, Bill! Unless Harry Reid sees it as a threat to his own boney butt.

    Mike Rounds may follow Buddy Cianci’s path, as featured on CBS Sunday Morning yesterday. Check out the racketeering conspiracy description and insert “the state capitol” for “city hall.”

    Buddy went to jail in 2002-2007 but came back to run again in Tuesday’s election in Providence, Rhode Island. Rounds lacks Cianci’s passionate personality and record of actually getting things done, but maybe by the time he’s GrampaDon’s age, he might seem less plastic and more approachable.

  9. caheidelberger Post author | 2014.11.03

    Francis, we can make the debt replacement argument on SDIF LP9, which Northern Beef Packers used to replace Epoch Star's $30-million loan and buy the Epoch Star in 2010.

  10. caheidelberger Post author | 2014.11.03

    96: absolutely. My EB-5 coverage will continue. I still have exhibits and depositions to read. We still haven't heard from the state Banking Commission on Joop's bank franchise tax. And we still haven't seen the crime scene evidence from Benda's death.

  11. Bill Fleming 2014.11.03

    Yup, Rounds might bring the EB-5 virus to DC and infect half of Congress with it. I bet Harry's hoping we impose a political quarantine on him, but just in case, he's shopping for a hazmat suit.

  12. Bill Dithmer 2014.11.03

    Taking part in the election process is a lot like taking pills that have anal leakage as a side effect. Even after the election is over and the bottle is empty, there is still going to be a stain to deal with.

    The stain, is what you will get if you elect Rounds. If you value the senate seat, keep it clean. Do Mikes laundry for him in the voting booth, dont send this man to DC.

    First it was Wild Bill Janklow, drunk, a raper of women, a convected killer, and still beloved so much he gets a portrait and a bust in Pierre. This turd roller was run out of congress because he killed someone. And yet the people of SD refuse to admit that they made a mistake with their votes. Now that is embarrassing! The R's should be so proud. Pissing away two senate seats in fifteen years is quite an accomplisment.

    R stands for repeat.
    Voting R means you want the anal leakage to continue.

    The Blindman

  13. Kate 2014.11.03

    Bill, you made my day with comparing a Rounds win to anal leakage! Thank you!

  14. Jaka 2014.11.03

    Oh, by the way , if any of you are hunters of pheasants/ducks/deer etc, I'd pass this year of going out by yourself into the hinterlands!!!! Can get nasty out there!

  15. Roger Cornelius 2014.11.03

    My advice to Republican hunters is to stay out of shelterbelts.

  16. oldguy 2014.11.03

    CAH-- What do you think the Feds best case against Bollen would be?

  17. larry kurtz 2014.11.03

    "As far as former Governor Mike Rounds, who is running as the Republican in this race, ‘scandal,’ ‘corruption,’ and ‘immigration’ are the top-searched words linked to his name in the last 30 days. Many of those searches are likely referring to the questions swirling around the administration of the EB-5 immigrant investor program when Rounds was governor."

  18. caheidelberger Post author | 2014.11.03

    oldguy: the feds can make a case that Bollen submitted false reports to USCIS. They may be able to perform real economic analysis and find the job creation numbers were bogus, leading to improper issuance of green cards. They may also charge that the funds given to the Huron turkey plant and the Aberdeen beef plant were used improperly for debt replacement rather than job creation. Those would be three separate charges, each convictable on its own.

    There may also be some securities fraud and improper guarantees of return on investment during recruitment overseas. Can anyone think of others?

  19. leslie 2014.11.03

    theft by deception. and he is not the perp sought, rounds is.

    Joop apparently tricked everyone he worked for for years, turned a federal jobs/investment administered program managed by the state into a world travel/expense account padded fun and games investment/banking conspiracy for vacation travel at tax payer cost, trading US Citizenship cards (assets of the people) for ever increasing millions of skimmable dollars for personal profit and likely tax evasion.

    anybody see joop, benda, sveen and other players' tax returns??

  20. oldguy 2014.11.03

    CAH-Would he be breaking the law when he didn't disclose that he owed the private company? Could he legally sign the contract privatizing the EB5 program? Would somebody higher up have to sign off on it?

  21. caheidelberger Post author | 2014.11.03

    Oldguy: Bollen clearly broke state law when he signed the January 2008 SDIBI–SDRC Inc. contract. He had no authority to sign contracts; that contract had to go to the NSU president and probably the Board of Regents for approval. Any money he took under that contract was thus stolen. But I don't know if the feds get in on that; AG Jackley should be prosecuting. The only way the feds get involved (and I'm really speculating here; someone get a lawyer in here!) is if there is some federal statute against using a federal program to facilitate transactions that result in theft in violation of state laws.

    We have the evidence that Bollen broke state law with that 2008 contract. The only justification I can think of for Jackley not to have prosecuted so far is that the feds have told Jackley to back off while they work on getting Bollen to turn federal witness to fry bigger fish.

  22. Jane 2014.11.03

    May be add the possibility of getting paid by Hanul's James Park and Austin Kim, years prior to 2007 - fees in the tens of thousands while he was a state employee. Regents may not have been aware. A forensic accountant from IRS may be able to verify. Would love it see his long and expensive asset sheet financially explained. Maybe also add the question of the nature of his relationship with Charrise Oliveros while she was in high school in the Philippines.

  23. Deb Geelsdottir 2014.11.03

    Oh man Blindman! I guffawed loudly over your "anal leakage" comment. Soooo funny! Thank you for the biggest laugh of the evening!

  24. Curt Jopling 2014.11.03

    So how would this process work? Is Rounds a Republican placeholder? If he was charged and found guilty after taking office could DD appoint himself thus ensuring the Senate seat for his party.

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