Another cautionary tale (SD)

I work with Regional Centers on the project side, and I personally don’t see much drama. Not lawsuits, not backstabbing and sabotage, not FBI agents pounding the door, and certainly not murder. I can witness that EB-5 includes a whole world of solid, ordinary businesses working hard to put capital together to get projects done, unexceptionable immigrants putting money into those projects, and new business ventures resulting in job creation and profit for investors. But there are soap operas to be had. If you are a public agency thinking about partnering with a Regional Center, a Regional Center considering a relationship with an investor recruiter, an investor recruiter wondering how many pounds of flesh you can get away with taking, or if you just like a good juicy drama with all the fixings, you’ll want to keep up with the ongoing saga of South Dakota International Business Institute Regional Center. This case is poignant because it apparently involves many sincere and well-intentioned parties and no obvious fraud, and yet it’s a dramatic example of how partnerships can go very wrong. A true cautionary tale.

I quote a summary of the story from an article in today’s Argus Leader, the daily newspaper of Sioux Falls, South Dakota:

The Northern Beef story so far
CONCEPT: The Northern Beef Packers plant was an ambitious attempt to bolster South Dakota’s economy by slaughtering the state’s cows in Aberdeen instead of shipping them out of state.
FOREIGN INVESTORS: Through years of development and false starts, most of Northern Beef’s funding came from more than 100 foreign investors under the federal EB-5 program, where foreigners could get green cards for investing $500,000 in American businesses.
EB-5: The state of South Dakota worked closely with the EB-5 program. It was promoted by Richard Benda, who then was secretary of Tourism and State Development and oversaw overseas investors. State official Joop Bollen also created private companies to manage EB-5 investments. Bollen resigned the same day he signed a contract for his own business to handle the state’s EB-5 program.
INVESTIGATIONS: State and federal officials are investigating Northern Beef, its handling of the EB-5 program, and South Dakota’s economic development office.
BENDA DEATH: Meanwhile, Benda died in late October from a gunshot wound. His death is being examined by authorities.

KELO, the CBS-affiliated television station in Sioux Falls, South Dakota, has a useful summary of the issues involved: Five Questions In State Development Investigation.

UPDATE: See EB5news.com for detailed analysis of this story. “The Rise and Fall of South Dakota: A Cautionary Tale for EB-5 Public Private Partnerships Part I”
(November 07, 2013)

About Suzanne (www.lucidtext.com)
Suzanne Lazicki is a business plan writer, EB-5 expert, and founder of Lucid Professional Writing.

7 Responses to Another cautionary tale (SD)

  1. Ahsan Nasratullah says:

    Thank you for all the great updates on EB-5 program and related stories. I was curious if there is a way to search your site to find out if there is any EB-5 Regional Center approval (designation letters issued) where the RC application was made in 2013 and designation letter issued in 2013 as well. Would appreciate your help on this. Thanks and I really enjoy your website.

  2. I only know of individual RC processing times from the designation letters, but I don’t have a chance to see all letters. You can check my log of approval letters to see filing dates and approval dates for 2013-approved RCs whose letters I have. On my list so far, two of the centers were both filed and approved in 2013, and I know one was based on a successful formal expedite request. https://docs.google.com/spreadsheet/ccc?key=0ApElmtcbj2xKdGV5SUZZUGJQNFg5aWpoNkZLUlJpbHc&usp=drive_web#gid=2

  3. Jeff says:

    In a universe where there are say less than 400 operators of RCs, the fraud and shenanigans are too many. We have the Intercontinental RC in Chicago, the one in Florida, NOLA, problems in Vermont and a host of others. That’s a very high percentage in a very small universe. Why is no one addressing this? Common thread between them? Greedy brokers and attorneys. NO one is talking about this.

  4. Jessica says:

    Very Nicely address the issue, however according to your suggestion
    quote from your article above “If you are a public agency thinking about partnering with a Regional Center, a Regional Center considering a relationship with an investor recruiter, an investor recruiter wondering how many pounds of flesh you can get away with taking, or if you just like a good juicy drama with all the fixings, you’ll want to keep up with the ongoing saga of South Dakota International Business Institute Regional Center.”

    where can I find information about South Dakota International Business Institute Regional Center?
    Upon my research, the USCIS approval letter was directly addressed to Mr. Bollen SDRC, Inc. that upon my understanding it was terminated relationship with Economic Developmnet Department.

    So Please let me know How can I find Information for SDIBI – RC

    Greatly Appreciated Your Info!

    Jim

  5. Helen says:

    Have any investors or brokers or USCIS checked the background of founder of new regional center including credit history and criminal record? If so, we won’t see so many fraud. People throw 100,000 to attorney and business plan writer to get regional center prove from USCIS, and get billions money from investor and disappear or claim failure of project later on. Pls check people’s history and credibility.

    • I agree with you! (Except to note that no one throws $100,000 to business plan writers, so far as I know!) The immigration reform legislation proposed last year included provisions to mandate more extensive background checks by USCIS of Regional Center applicants, and I hope that goes through eventually. If the Department of Commerce gets involved in providing recommendations for EB-5 review, I’m sure they’ll focus on this issue as well. Meanwhile, in this Internet age of easily available and translatable information, investors have no excuse not to engage in due diligence of their own.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: