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EB-5 money wired to shadowy business partner, documents say

EB-5 money wired to shadowy business partner, documents say

 EB-5 Visa, EB5 Visa, EB-5 Investment

The creator and former head of the state’s EB-5 Immigrant Investor Program is accused of wrongly using more than a million dollars in money from an account that was supposed to secure the state of South Dakota from potential lawsuits.

Joop Bollen made a first appearance Friday in Brown County, where he faces five class six felonies of unauthorized disposal of personal property subject to security interest. Bollen, according to an arrest affidavit, “used funds from this account to personally benefit.”

Among the withdraws that were allegedly unauthorized was $370,000 that ended up being wired to a long-time business partner of Bollen’s. The business partner, Pyush Patel, was also the vice president of SDRC, Inc., the private company that Bollen formed when he was a state employee running the EB-5 program through the Governor’s Office of Economic Development. In 2009, Bollen resigned from the state government after SDRC signed a contract with the state to run EB-5 through Bollen’s private company rather than through state government.

EB-5 is a national program through the U.S. Citizenship and Immigration Services that enables wealthy foreigners to obtain visas by investing as little as $500,000 into qualified economic development projects. In South Dakota, Bollen used the program to fund about a dozen projects starting in 2004.

Money from additional withdrawals went to Christie's Fine art in London and a collector of Egyptian artifacts. Another $166,606 vanished, according to the state.

Public records show that Bollen and Patel have a long history, dating as far back as the mid-1990s when the two started a liquor store business near Atlanta. Records also show that the state of California filed tax liens against Bollen, Patel and a flower business they owned in Los Angles in 1993.

Patel currently owns convenience stores and gas stations in the Atlanta area. He did not return messages left at three of those stores, and he did not respond to an email address that he listed with the Georgia Secretary of State as a contact email. Previous messages left at his home were never returned.

Besides their various business relationships, the two appear to have close personal ties. “Pyush” is the middle name of Bollen’s son, according to divorce records, and the two own beach-side condominiums in the same South Padre Island, Texas complex, according to public records obtained by Argus Leader Media.

In February 2012, three weeks before Bollen allegedly wired money to Patel, Bollen and Patel each bought a $250,000 tax increment financing bond for the Northern Beef Packers Plant in Aberdeen, according to the AberdeenAmerican News report of the sale.

In addition to the money he allegedly wired to Patel, Bollen is accused of transferring $300,000 from the state indemnification fund to SDRC’s primary account. That same day, $500,000 was transferred from SDRC’s account to Brown County to purchase the bonds.

In 2015, the affidavit states that Bollen received $32,500 in principal and interest payments from the bond.

The Northern Beef Packers project was one of more than a dozen EB-5 projects, and it proved to be a colossal failure after it went bankrupt in 2013, causing more than 100 Chinese and South Korean investors to lose their money. Richard Benda, the former cabinet secretary under Gov. Mike Rounds who oversaw the EB-5 program, went to work for Bollen after being let go in 2011 by incoming Gov. Dennis Daugaard. Benda killed himself in October 2013 as Attorney General Marty Jackley was preparing to charge him for wrongly diverting $550,000 of state money that was supposed to have gone to Northern Beef Packers.

Jackley on Friday refused to rule out additional arrests or more charges, saying that the five felony charges against Bollen were “initial charges.”

“Part of the responsibility of the attorney general is to enforce our criminal laws and restore trust to the people,” he said.

Bollen spoke very little at the brief court appearance in Aberdeen. His attorney, Reed Rasmussen, pushed back against the charges after the hearing.

“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. “There is absolutely no missing money. Mr. Bollen denies all the allegations and looks forward to clearing his name in court.”


Source: http://www.argusleader.com/story/news/2016/04/01/eb-5-money-wired-shadowy-business-partner/82517374/

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