The founder of a Los Angeles firm that worked closely with Northern Beef Packers to secure $30 million in financing in 2009 and 2010 said the since-bankrupt Aberdeen packing plant was under the complete control of Joop Bollen and lawyers from the Hanul law firm, James Park, of, Los Angeles and Si-Il Jang, of South Korea.
In addition, David Kang, founder of the Maverick Spade firm, told The Daily Republic that he met then-Gov. Mike Rounds during a meeting in the South Dakota Capitol in Pierre. The meeting was run by Richard Benda, Rounds' cabinet secretary in charge of economic development who died almost a year ago -- Oct. 20, 2013 -- in what officials have ruled a suicide.
In addition to himself, Kang said Benda, Bollen, Park, others from the Hanul law firm and David Palmer, then the CEO of Northern Beef Packers, attended the meeting in the Capitol.
"I'm not sure whose office it was, but Benda was running the meeting," Kang said.
Benda's office was located in a building nearby the Capitol, but not in the Capitol itself.
Kang described Rounds' involvement in the meeting as a "meet-and-greet" with handshakes and introductions, with Rounds departing before substantive discussions began. He said Benda introduced those present to Rounds.
"Benda coordinated the meeting," Kang said. "The main focus of the project was the Certified Beef program, so ranchers in South Dakota didn't have to keep on shipping cattle to Texas or Oklahoma or so forth."
Kang referred to South Dakota Certified Beef, a key initiative of the Rounds administration launched shortly after he took office in 2003.
Rounds, now a candidate for the U.S. Senate, said through a spokesman he does not recall the events Kang describes.
"Gov. Rounds has no recollection of this meeting ever taking place," wrote campaign spokesman Mitch Krebs in an email to The Daily Republic.
Kang's story casts doubt on statements Rounds made during an interview with The Daily Republic in March 2014, when he said the state had no involvement in securing the $30 million needed to keep Northern Beef afloat.
Rounds said the state's sole involvement was the South Dakota Banking Commission's approval of the deal on June 29, 2010, when the commission waived the requirement for a banking license and taxes.
"That's the extent of the state's involvement with it," Rounds said in March. "That's the end of it. There's no connection."
Bollen, Hanul in control of Northern Beef
Kang said Maverick Spade was contacted and hired by the Hanul law firm around May of 2009, to secure the $30 million loan for Northern Beef Packers and additional adviser services.
"We are a pure due diligence and advisory firm preparing companies. We present possible partners, possible financiers and commercial banks and legal structures," Kang said.
Maverick Spade's involvement in the $30 million loan deal was not widely known until documents from the deal were made available this month to The Daily Republic, including the loan agreement.
Kang founded his firm in 2007 after a career in finance, including doing work for Morgan Stanley Dean Witter. On his LinkedIn profile online, Kang said he "specializes in complex and distressed transactions starting at $50 million."
Maverick Spade operates out of a building in the Los Angeles garment district that manufactures clothing in a business co-founded by Kang and his sister, known as Frenzii Inc.
Maverick Spade worked with the former director of U.S. Citizenship and Immigration Services as a special advisory board member. Emilio T. Gonzalez served under President George W. Bush from 2005-2009.
Kang stresses that Gonzalez was not involved with Maverick Spade at any time it worked with Northern Beef Packers.
"I met Dr. Gonzalez in the last week of August 2011, and Maverick was involved with NBP in 2009 through 2010. There would be no way for Dr. Gonzalez to be a part of NBP," Kang said.
Meanwhile, Kang describes finding Northern Beef Packers in financial disarray in 2009, with Joop Bollen and Hanul's James Park running operations and having control of the plant's accounts and money.
"They were in complete control of any and all finances," Kang said of Bollen and Park. "Financially it was an utter disaster. They didn't have any of the financial records organized. They didn't work with any of the lienholders."
Hanul, he said, had been granted power of attorney on behalf of the 69 investors under the EB-5 program, the federal immigrant visa program that exchanges U.S. green cards for $500,000 in investments in an American project. The state of South Dakota had granted a company owned by Bollen the right to administer EB-5.
"Hanul and Bollen, they were tied at the hip in more ways than one," Kang said.
Richard Benda also was involved in the plant, Kang said, although not to the extent of Bollen and the Hanul law firm. He was working to promote the project but was not involved in day-to-day operations. Aberdeen attorney Jeff Sveen also was involved, Kang said, as "one of Joop's partners."
Sveen's signature appears on several documents related to Bollen's EB-5 company, SDRC Inc. Sveen is a partner in the Siegel, Barnett & Schutz law firm.
Northern Beef's CEO, David Palmer, and others were not allowed to make decisions or administer accounts, Kang said.
"Usually in a development project, the CEO and president takes more of a lead, with expertise operationally to put projects to bed. He couldn't. He wasn't in a position to," Kang said.
Soured relations between Maverick Spade, Northern Beef
Once Maverick Spade was hired, Kang said he put four staff members on the project, with all of them working 12-hour days for the better part of a year. It took months to get Northern Beef's records up to snuff to present to potential lenders, he said.
"Maverick had to go in and spend countless hours accounting for expenses, billables, the cost of construction, review the state of construction it was at. We had to prepare all of the documentation for investors stateside to present to traditional national or regional banks," Kang said. "It was quite a daunting task."
Kang declined at this time to go into detail regarding what Northern Beef's accounts showed had happened with the millions of dollars that had been pumped into the plant. He did describe treatment by Hanul and Bollen similar to that of another California firm that sued Hanul and the state of South Dakota. In a California court case completed earlier this month, Darley International, of Los Angeles, described being hired, doing work and then being undermined and circumvented. Darley officials claimed in court that Hanul and Bollen began working directly with Darley's "sub-agents" in China before cutting ties with Darley after just a few months.
"They had us flying here, there, South Dakota, Korea, Asia, everywhere trying to get financing. We were working in three time zones," Kang said.
Kang said once it became clear that Chinese Development Industrial Bank out of Taiwan was willing to loan Northern Beef $30 million through its subsidiary, Anvil Asia Partners, Hanul and Bollen began working directly with bank officials.
"They pretty much got what they wanted and from there said, 'Bye-bye,' " Kang said, adding that his firm had not been paid much beyond an initial retainer fee. "That is one of the many reasons why Maverick exited the project."
Kang said Maverick Spade's expenses were not being reimbursed throughout the course of the project, but he was trying to work through those issues. Relations between Maverick Spade and Hanul, Bollen and Northern Beef truly soured after the $30 million loan appeared a sure thing.
Ultimately, his firm was paid $950,000, more than the $750,000 in expenses it had submitted but less than half of the $2.5 million "success fee" originally agreed to by all the parties.
"A distressed construction loan is more difficult than a regular construction loan. That's why any success fee is going to be higher because of the amount of work going into the overall project," Kang said. "The more time you put into it, the more people expect a success fee."
Kang speaks fondly of the late Benda.
"Benda had his heart in the right place. His motivation was definitely to get the project going in more ways than one," Kang said. "He did everything and anything in his power to get this project underway. He was always the biggest cheerleader for the project."
He describes Bollen and Park as, at best, inept.
"They were in over their heads. They didn't understand how to do development, construction projects, things of that nature. That's ultimately why they fell flat on their face," he said.
- South Dakota Regional Center Inc.
- H&H Law
- Joop Bollen
- U.S. Citizenship and Immigration Services
- Northern Beef Packers III
- Darley International LLC vs South Dakota International Business Institute (SDIBI)
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION vs USA Now Regional Center, LLC
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION vs Intercontinental Regional Center Trust of Chicago
- South Dakota
Subscribe for News
This website is for informational purposes only and does not constitute an offer or solicitation to sell shares or securities. Any such offer or solicitation will be made only by means of an investment's confidential Offering Memorandum and in accordance with the terms of all applicable securities and other laws. This website does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. EB5Projects.com LLC and its affiliates expressly disclaim any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained in the website, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom.