OUR VIEW: Latest EB-5 woes show SD delegates didn't act fast enough
The problems with the EB-5 program are growing, which is why national reforms to the program are needed.
South Dakotans know EB-5 as that awkward term associated with the October 2013 death of Richard Benda, who was the economic development secretary when he signed a contract with SDRC — led by Joop Bollen — to take over the foreign-investor program.
EB-5, a federal program, allows foreigners to get green cards by investing $500,000 in projects that create jobs in the United States. Well documented in our state is the suicide of Benda and the recent charges that have been brought upon Bollen.
But what has gone somewhat unnoticed in South Dakota is the alleged scandal from EB-5 in Vermont.
Late last week, the governor of Vermont announced federal and state accusations of fraud against business partners who raised about $400 million for projects at two ski resorts from 800 investors in countries from Brazil to South Africa to Vietnam, according to reports.
The men have been accused of a "Ponzi-like" scheme in which they diverted EB-5 money to a variety of shell companies and financial accounts, reported the Free Press newspaper in Burlington, Vermont.
Vermont Sen. Patrick Leahy immediately issued a response that he is "shocked and saddened" by the allegations, and Thursday he issued an opinion piece stating the desperate need to reform the EB-5 program.
What's sad is the lack of effort by South Dakota's representation in the U.S. Legislature to reform EB-5. South Dakotans learned late in 2013 the corruption involved with EB-5 in our state.
Presumably, our congressional leaders were made aware of the misuse of EB-5 soon after Benda's death. Sen. John Thune and Rep. Kristi Noem, and later-elected Sen. Mike Rounds, should have been leaders to reform the program, not just for South Dakota's sake, but to help other states avoid corruption that's now plaguing Vermont.
EB-5 has been around since 1990 and undoubtedly has its benefits when used appropriately.
But clearly there are still people across the country taking advantage of the program for their personal benefit, rather than for economic development.
For that, we look to Thune, Rounds and Noem and ask: Why hasn't anything been done to stop this and what are you going to do about it?
- 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.