Report: South Dakota Not Doing Enough to Recover EB-5 Funds
A recent report from the Center for Immigrant studies in Washington DC says South Dakota lacks aggression in tracking down missing EB-5 funds in comparison to another state with EB-5 losses.
David North states that Vermont had a loss of 35 million and has already recovered nearly 6 million dollars. Meanwhile in South Dakota, the loss was 100 million and only 1 million has been recovered.
Both states found that multi-millions of investor funds (and smaller amounts of state funds) had been swindled, wasted, or lost. And the states have the powers of both regional centers and of state governments to begin the process of recovering at least some of those funds.
Despite the fact that charges have been filed against Joop Bollen regarding misuse of EB-5 funds including purchasing antiquities and other offences, North contends more charges and lawsuits could have been filed in South Dakota, as Vermont lawsuits have proven to be successful in recapturing lost money. Although he cites differences between the two states' EB-5 problems, North suggests one of the reasons why lawsuits have not been filed in South Dakota:
... the apparent reluctance of the people in Pierre to go after South Dakota's EB-5 abusers, who seem to be extremely well connected at several levels to the GOP-controlled state government.
The state of Vermont filed sued against the brokerage firm Raymond James, who created revenue by accepting EB-5 funds into its margin accounts. One of the complications in the South Dakota EB-5 senario is the amount of money that went overseas, including Hong Kong and Canada.
The US Citizenship and Immigration Services provides the following definition of the EB-5 program:
Under this program, entrepreneurs (and their spouses and unmarried children under 21) are eligible to apply for a green card (permanent residence) if they:
Make the necessary investment in a commercial enterprise in the United States; and
Plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers.
This program is known as EB-5 for the name of the employment-based fifth preference visa that participants receive.
Congress created the EB-5 Program in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. In 1992, Congress created the Immigrant Investor Program, also known as the Regional Center Program. This sets aside EB-5 visas for participants who invest in commercial enterprises associated with regional centers approved by USCIS based on proposals for promoting economic growth.