Democratic candidate for U.S. House disputes no-jail sentence in EB-5 case
A retired state judge running for Congress wants to know why an Aberdeen man wasn’t sentenced to prison last winter.
Joop Bollen pled guilty to unauthorized disposal of personal property subject to a security interest.
He had taken $300,000 from an account meant to protect state government’s EB5 immigrant investor program. He later paid the money back before he was discovered.
Bollen received two years on probation and a $2,000 fine. Until four years ago, the sentence for a Class 6 felony had been two years in prison, unless probation was granted.
The Legislature in 2013 adopted a policy known as presumptive probation for state judges to follow for most of the felonies in the two lowest -- Class 6 and Class 5 – categories.
Bollen deserved to serve time, according to the retired judge, Tim Bjorkman of Canistota.
“I just think that people need to know that anyone who mishandles the public’s funds will face a serious consequence,” Bjorkman said.
“Where the state doesn’t vigorously charge and then obtains a sentence with no incarceration in a case with these facts, it tends to erode the people’s trust in the system and our whole state suffers.”
Bjorkman is the Democratic candidate for South Dakota’s seat in the U.S. House of Representatives.
He said Congress should abolish the EB-5 program. He said it has opened the door to additional corruption in South Dakota.
The state attorney general, who is running for governor, was in the Aberdeen courtroom during Bollen’s sentencing Feb. 1.
Attorney General Marty Jackley said Circuit Judge Tony Portra remarked he had 72 inmates and 48 beds in the jail.
“He made it pretty clear,” Jackley said
Jackley retrieved a legal-pad page from the evidence file and showed it to a reporter.
“I don’t know I’ve ever had a judge tell me that before,” he said. “I wrote it down.”
State law provides judges with the discretion to sentence Class 6 and Class 5 felons to prison even in routine cases, according to Bjorkman.
He showed how Bollen could have been sentenced to at least six months behind bars.
Jackley is running for the Republican nomination for governor. Jackley said Bollen’s crime was one of many lower-class felonies the Legislature exempted from prison four years ago.
Legislators made the change as part of a package of reforms known as Senate Bill 70. Gov. Dennis Daugaard, a Republican, and a task force recommended the changes to slow down inmate numbers.
Jackley said he disagreed with the change the Legislature made. He said lawmakers took prison time off the table for Bollen’s crime.
“It affects the plea bargaining process,” Jackley said.
The roots of the case reach back more than 13 years.
The U.S. Citizenship and Immigration Services designated state government’s Department of Tourism and State Development as a regional center April 2, 2004.
Regional centers serve immigrant investors through federal programs such as EB-5.
EB-5 allows a foreign citizen to apply for permanent U.S. residency if the person invests at least $500,000 in a U.S. business that creates or maintains at least 10 jobs.
The two-step process also covers the investor’s spouse and minor children.
Joop Bollen was president for SDRC Inc. The Aberdeen-based company received a consulting contract from state government that became effective Dec. 22, 2009.
The contract authorized SDRC to administer state government’s regional center and EB5 program, and to serve as the South Dakota marketer for EB5.
One of the contract conditions was establishing an indemnity fund of $1 million that state government could use for legal expenses.
Bollen previously was a state government employee who specialized in helping immigrants make investments in South Dakota.
His portfolio gradually grew, with then-Gov. Mike Rounds launching state government as a regional center and broadening the uses of EB-5.
When Richard Benda returned to state government as tourism and state development secretary, he worked closely with Bollen on EB-5 projects.
Bollen meanwhile formed SDRC Inc.
Bollen ultimately left his state job, which was based on the Northern State University campus in Aberdeen, and signed the consulting contract to run EB-5 for state government.
Jackley said he couldn’t talk specifically about what might have led Bollen to change his mind and plead guilty to one count.
But over the course of one week at the end of January, Bollen flipped.
He went from his original not-guilty pleas on five charges, to pleading guilty to one charge.
The turning point might have been the decision Judge Portra issued Jan. 24, 2017.
He denied Bollen’s Dec. 14, 2016, motion seeking dismissal of the five charges.
Judge Portra also said a jury should decide a factual question: Was the contingency account Bollen had repeatedly tapped included in the indemnity fund?
On Feb. 1, 2017, Bollen went back into the Brown County courtroom.
He admitted guilt on the first count: Transferring $300,000 on Feb. 2, 2012, from a contingency account to the main SDRC account, without notifying state government.
The financial trail indicated he bought a $500,000 tax-increment financing bond for the Northern Beef Packers project being built in Aberdeen.
SDRC had raised several rounds of money from immigrant investors in China and South Korea for the Northern Beef project.
Bollen later paid back the $300,000.
Judge Portra dismissed four other felony charges for similar crimes Bollen allegedly committed. They were:
Bollen allegedly took $370,000 from the contingency account on April 30, 2012;
That same day, Bollen allegedly also took $96,838.74 from the contingency account;
Bollen allegedly took $166,606.89 from the contingency account on May 7, 2012; and
On June 19, 2012, Bollen allegedly took $310,000 from the contingency account.
Each time, Bollen allegedly didn’t notify state government. Jackley said all of the money was paid back.
Jon Bierne, a supervisory special agent at the state Division of Criminal Investigation, had worked the original probe into SDRC in 2013.
Richard Benda signed the SDRC contract in his role as state government’s secretary of tourism and state development.
Tipped reportedly by federal investigators, Jackley’s office suspected Benda of allegedly double-billing state government on travel expenses.
Jackley was ready to present evidence that Benda changed amounts of state aid to Northern Beef in December 2010 and steered extra money to SDRC to pay himself to continue working on Northern Beef as an SDRC employee.
Jon Bierne, a supervisory special agent for the state Division of Criminal Investigation, worked on the Benda case.
Shortly before the grand jury was to meet, Benda allegedly shot himself to death while pheasant hunting, alone, in 2013.
Two years later, Bierne was assigned to look into the SDRC banking records regarding Bollen.
The records provided evidence that formed the basis for the felony charges against Bollen.
Assistant attorney general Brent Kempema filed five counts March 30, 2016.
Jackley said state law restricts what he could publicly discuss about a plea agreement.
“The time frame is obvious,” Jackley said.
The Legislature’s decision to encourage judges to use presumptive probation meant, according to Jackley, that Bollen wouldn’t have gone to prison whether he pled guilty on one or five felonies.
That was because they were Class 6 crimes, Jackley said.
Judge Portra signed the order suspending imposition of the prison sentence for Bollen on Feb. 3, 2017.
In the order, Judge Portra said he exercised judicial clemency, with consent from Bollen.
Among Jackley’s competitors for the Republican nomination for governor in the June 2018 primary is U.S. Rep. Kristi Noem.
A four-term member, Noem wants to be South Dakota’s first woman to be state government’s chief executive.
Her decision to run for governor means there won’t be an incumbent seeking the U.S. House seat in 2018.
Jackley was U.S. attorney for the district of South Dakota when President Barack Obama, a Democrat, took office in 2009.
Then-Gov. Rounds appointed then-Attorney General Larry Long to a new circuit judgeship in Sioux Falls.
Rounds in turn chose Jackley to succeed Long as attorney general. Jackley won election as attorney general in 2010 and 2014.
Those ties and others involving Bollen and EB-5 have left an ashen taste in some South Dakotans’ mouths including Bjorkman.
“I respect the Attorney General’s office, enjoyed working with the lawyers from that office, and have no interest in criticizing their work,” Bjorkman said.
“I do think, though, like me, a lot of people wonder just what happened that allowed Bollen to face such light charges,” he continued.
“I think it’s important for that office to fully explain their decisions in these matters once and for all,” Bjorkman added. “I for one would listen to them.”
- South Dakota
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