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SD Lawmaker Accuses EB-5 Leader Of Fraud

A state lawmaker says South Dakota taxpayers lost out on $140 million because of the way the state handled the EB-5 investor visa program. Democratic State Representative Kathy Tyler says South Dakota leaders allowed a state employee to create a private company to take over administering EB-5. She says she has documents that prove the company charged millions in fees that could have gone into state coffers. 

For 15 years, the South Dakota International Business Institute at Northern State University handled the state-funded and federally endorsed EB-5 program. It allows foreign investors to put $500,000 into American businesses as an opportunity to gain green cards.

Democratic State Representative Kathy Tyler accuses the man who led the agency of fraud.

Joop Bollen was a state employee who ran the government-funded operation in 2008 when he formed a private company. Tyler says that company got an exclusive contract to manage EB-5 investments in South Dakota.

"The big deal is that at that time Joop Bollen was a high-ranking state official who signed a contract on behalf of the state with a company that he owned," Tyler says.

Tyler says the private company took in $140 million. She says that could have gone directly to the state if Bollen hadn’t created a SDRC, Inc. and state leaders hadn’t awarded his company a no-bid contract to administer EB-5.

Tyler says Bollen's move violates the Board of Regents Fraud policy. She says she has documents that prove fraud.

"Within the scope of his public employment, Joop Bollen and his partners intentionally deprived the Board of Regents something of value: over $140 million in EB-5 fees that could have stayed with the state. Bollen fraudulently omitted SDRC, Inc’s role in managing the EB-5 program in semi-annual contracts with Northern State University and the Department of Tourism/State Development , and he also misrepresented the relationship between the state and SDRC, Inc. to the United States Citizenship and Immigration Services in documents requesting EB-5 expansion and explaining SDRC Inc.’s role in that expansion," Tyler says.

The state lawmaker says she can’t reveal how she got copies of contracts related to EB-5.

State Representative Kathy Tyler says she wants the state legislature’s executive board to instruct the Government Operations and Audit Committee to subpoena Joop Bollen and former Governor Mike Rounds. He approved the transfer from the public EB-5 program to private administration. Tyler isn’t currently on Tuesday’s agenda.

Rounds is one of four men seeking a term in the United States Senate. A spokesperson for his campaign says Rounds had no knowledge of the contract released Monday. He says Joop Bollen worked for the Board of Regents, so his employment didn't fall under the purview of the governor's office. 

Documents released by Tyler include the following:

SDRC Inc. Articles of Incorporation
SDRC Inc. Certificate of Incorporation
SDIBI Contract with SDRC, Inc.
12/22/09 Amended Contract
Darley Confidential Overseas Recruitment Contract
Darley v. SDRC, Inc. Memo of Points
DTSD & NSU Contracts with Bollen
SDBOR Fraud Policy
Request for Amendment to the Dairy Economic Development Region

Kealey Bultena grew up in South Dakota, where her grandparents took advantage of the state’s agriculture at nap time, tricking her into car rides to “go see cows.” Rarely did she stay awake long enough to see the livestock, but now she writes stories about the animals – and the legislature and education and much more. Kealey worked in television for four years while attending the University of South Dakota. She started interning with South Dakota Public Broadcasting in September 2010 and accepted a position with television in 2011. Now Kealey is the radio news producer stationed in Sioux Falls. As a multi-media journalist, Kealey prides herself on the diversity of the stories she tells and the impact her work has on people across the state. Kealey is always searching for new ideas. Let her know of a great story! Find her on Facebook and twitter (@KealeySDPB).
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