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S.D. EB-5 program an example of what not to do

S.D. EB-5 program an example of what not to do

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

Two months before a federal investment-for-visa program is set to sunset, one of its chiefs made an example of South Dakota's regional center Thursday as he issued a stern warning to stakeholders urging them not to abuse the system.

Malfeasance and theft from investors have been common in the EB-5 program, Nick Colucci, chief of the United States Citizenship and Immigration Services' (USCIS) Immigrant Investor Program Office, told stakeholders during a meeting in Miami. And if the pattern continues, the office won't hesitate to terminate regional centers across the country.

Colucci indirectly referenced South Dakota's ensnared regional center, which USCIS threatened with termination this month, saying multiple regional center heads had used investor funds to buy homes and cars or to pay off personal debt.

In South Dakota, the program's former administrator Joop Bollen is alleged to have improperly disposed of more than $1.2 million from a fund related to the program, which allows wealthy foreigners to invest at least $500,000 in exchange for a green card. An affidavit in the case says that some of that money ended up with Christie's Fine Art in London, with Bollen's close personal friend in Georgia and with a collector of Egyptian artifacts. Bollen was known to be an art collector.

"It’s not sufficient to spend some EB-5 funds on a project – if you attract $100 million in EB-5 capital investment, you can’t spend $90 million on the project and put the other $10 million in your pocket," Colucci said. "Regional centers exist to promote economic growth consistent with Congress’ intent when it created EB-5."

The state has since taken over the regional center and has put a hold on new projects. Tony Venhuizen, chief of staff to Gov. Dennis Daugaard, said the state is focused on making sure that investors who met the program's terms are treated fairly by USCIS.

Venhuizen said the state plans to appeal the termination of the South Dakota Regional Center early next month. Regardless of the state's action, the case will move to an administrative appeals office "due to the complex and novel issues" raised.

The state contends that it isn't able to provide the information necessary to satisfy USCIS agents as it has been lost or hidden since Bollen left the regional center. The state has entered into a series of lawsuits against Bollen and SDRC, Inc. in an effort to obtain additional information about how the center was administered.

The EB-5 program in its entirety could be dismantled before the feds are able to make a decision on terminating the South Dakota Regional Center, however. And David North, a fellow at the conservative non-profit the Center for Immigration Studies, said Congress should let at least parts of the program die in September.

"Sovereign nations shouldn't be selling visas, which is what we're doing," North said. "That seems morally wrong."

The Center for Immigration Studies is a research group that advocates for immigration reduction. The Center published a map Monday that shows locations of regional centers across the country and details scandals that have occurred at each.

North said South Dakota's Regional Center and EB-5 program are among the most notorious on the map.

"South Dakota is probably the biggest and the most mishandled program," North said.

South Dakota' congressional delegates Sens. John Thune and Mike Rounds and Rep. Kristi Noem said the program has provided some benefits, but must be reformed to include more federal oversight if it's to be renewed.


Source: http://www.argusleader.com/story/news/2016/07/28/sd-eb-5-program-made-example-what-not-do/87581172/

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