State's criminal EB-5 case rests on little-used charge
The high-profile financial misconduct case against the man who once ran South Dakota's investment-for-visa program relies on a little-used felony charge that has been filed in much simpler cases, such as the shooting of a truck with a rifle and the auctioning of a Volvo loader.
Joop Bollen is accused of diverting more than $1.2 million from an account created as part of a contract with the state to protect it against costs or liability from South Dakota's EB-5 visa program. Bollen, who authorities say replenished most of the money, is charged with disposing of secured property, which can carry prison time.
Bollen's attorney has said the state is trying to make him a scapegoat.
The charge is often brought in cases where someone damages or improperly sells property that's collateral for a loan. In South Dakota, there have been four convictions on the charge since 2007, and a total of 78 counts filed in that timeframe, according to the state's Unified Judicial System.
For example, in 2014, a Watertown man was accused of driving into his girlfriend's truck — for which they had a loan from a bank — and then shooting it with his AR-15 rifle after an argument. In a separate case that year, a man from the same city was accused of selling tools he was still paying off to a pawn shop for about $4,000.
Marsh Halberg, a Minnesota defense attorney who isn't connected to Bollen's case, said the charge Attorney General Marty Jackley chose to pursue against Bollen is legitimate.
"Is he being resourceful, creative? I guess to a certain extent, yeah. I think it might pay off," Halberg said. "I think it's got some legs to it."
Bollen has been charged with five counts, each of which is punishable by up to two years in prison and a fine, though Jackley has said there's a presumption of probation if convicted for Bollen's class of felony.
Bollen headed the EB-5 program for the state when he was in charge of the South Dakota International Business Institute at Northern State University. The program was privatized in 2009 and turned over to SDRC, the company Bollen founded, until the state took over management in 2013. The investment program came under fire in 2013, after a former state official associated with it killed himself as felony theft charges were being prepared against him.
Bollen's attorney, Reed Rasmussen, said civil litigation — which the state is already pursuing — is more appropriate than a criminal charge.
"Under the state's best-case scenario, he may have breached the contract," Rasmussen said.
Jackley said the charge stems from new developments in the investigation into the program and that the law underpinning the case is "specifically on point." The attorney general also cited a 2010 state Supreme Court opinion that he said gave authorities direction on the appropriate charge to use.
"We find out what the facts are, and then we apply them to the law as written by the Legislature and as interpreted by our highest court," Jackley said.
Still, Jackley has said he's frustrated he can't bring conflict-of-interest charges in the investment program scandal or in a separate case unrelated to EB-5 of alleged theft and an attempted cover-up at a Platte-based educational cooperative. He intends to seek legislation next year that would increase his options in such cases.
The state's legal documents accuse Bollen, 53, of Aberdeen, of improperly transferring money out of an account that his company was supposed to maintain. In at least one case, the money was subsequently used to buy an Egyptian artifact, according to a court document.
A court affidavit said most of the money was repaid to the account, but a state investigator said in the document that a nearly $167,000 transfer does not appear to have been refunded.
Bollen's next hearing is scheduled for May 13.
- South Dakota
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