A look at charges filed in South Dakota visa program scandal

AP News
|
Posted: Apr 01, 2016 6:09 PM

SIOUX FALLS, S.D. (AP) — South Dakota's attorney general has filed criminal charges against a former state official in connection with a troubled program that aimed to attract investment dollars from wealthy immigrants in exchange for easier entry into the United States.

Here is a quick rundown on the allegations and the history of the program:

THE CHARGES

Joop Bollen, 52, made his first court appearance Friday on five felony counts that allege he inappropriately transferred more than $1.2 million — on different occasions in 2012 — for personal use from a fund his company was supposed to maintain to protect the state from losses.

Bollen is not charged with theft, and an affidavit says money in matching amounts was largely put back in to replenish the money taken from the account. The state directed Bollen's company, SDRC Inc., to create the fund at the center of the charges as part of its privatization contract to manage the EB-5 program. He was not supposed to divert money from it for his own use.

Most of the transfer's from the fund went directly into SDRC's main bank account, according to the affidavit. In the document, authorities link the funds to Bollen's purchase in April 2012 of an Egyptian artifact from a dealer for nearly $97,000, as well as buying bonds.

In June 2012, authorities also say $310,000 was transferred from the fund to SDRC's account. The next day, the same amount moved from SDRC's account to a family trust, which was also related to Egyptian art.

Bollen was charged Thursday. Attorney General Marty Jackley said additional charges may be coming as authorities continue the investigation, although he didn't say what they might be. A state investigator said in the court document that a nearly $167,000 transfer does not appear to have been refunded.

___

THE PROGRAM

The federal EB-5 visa program allows people to seek U.S. residency if they invest at least $500,000 in approved projects. Bollen first led South Dakota's participation in the program as a state employee and later as the head of SDRC Inc., the private company he founded.

___

TROUBLED PAST

South Dakota was one of the pioneers in EB-5 financing under Bollen and former Governor's Office of Economic Development secretary Richard Benda. The program came under public scrutiny in 2013 after Benda committed suicide as state officials prepared felony theft charges against him in connection with financial misconduct.

The investigation stemmed from allegations that Benda double-billed the state for flights and redirected $550,000 in economic development money for his own use.

The FBI announced in June 2015 it had ended an investigation into the program in South Dakota and that the state's U.S. Attorney would not pursue any prosecution.

___

WHAT DOES BOLLEN SAY?

Bollen, of Aberdeen, declined comment to The Associated Press about the charges. But his defense attorney, Reed Rasmussen, said prosecutors were wrongly targeting Bollen for problems at the scandal-ridden program.

"The state has decided to transform what should be at most a breach of contract case into a criminal proceeding in an apparent attempt to make Mr. Bollen a scapegoat for problems encountered with the EB-5 program," Rasmussen said Friday, after Bollen made his initial court appearance. "There is absolutely no missing money. Mr. Bollen denies all the allegations and looks forward to clearing his name in court."

___

WHAT'S NEXT?

Bollen's next hearing is scheduled for May 13. The Governor's Office of Economic Development terminated its contract with SDRC Inc. in 2013 and now administers the EB-5 program. Since that move, there haven't been any new projects.

A U.S. immigration agency notified the state in September 2015 that it intends to terminate South Dakota's participation in the program. U.S. Citizenship and Immigration Services determined that South Dakota's regional center wasn't promoting economic growth and said administrators have failed to submit required information to the agency.

South Dakota's economic development office defended its ability to administer the program, saying problems flagged by the federal government stemmed from SDRC.