What happened with the EB-5 program while Mike Rounds was governor of South Dakota is more questionable than has been seen by any state government, ever. This even carried a little into his successor and friend Dennis Daugaard’s time. One of the biggest failures that occurred while these men were in office is the bankruptcy of Northern Beef Packers in Aberdeen. The EB-5 program wasn’t even enough, they had to delve into questionable actions with a slew of international companies.
Who was watching the shop
Northern Beef Packers is such a complex issue, that it would take someone who is an expert at financial forensics to even get it all done correctly. I will cover some of this, though.
Here is a link to the timeline of the rise and fall, via Timetoast.com. As will be seen, the plant started in 2006 and filed for bankruptcy last year. There were people that were working there that have lost even that. The list of people who are listed as defendants when the company filed last year, as seen here on gpo.gov, is so extensive, there is no way to list them in this article. This was a waste of millions of dollars and it happened while no one tended the shop in two administrations.
The people that were involved in all of this kept raising money and failed hundreds in the bankruptcy, via an article at EB5news.com. The people responsible for this made sure to cover their bases, except for those who need the jobs. One of the primary purposes of government is to enforce laws. There seems to not to have been a lot of this in the state of South Dakota, while Mike Rounds and Dennis Daugaard have been in office.
Epoch Star Limited
One of the oddities of this entire deal is the loan from Epoch Star Limited. The company was created in the British Virgin Islands and is connected to two other companies, both in the Cayman Islands.
Diagram of the three company linkage.EPOCH_3 Graph 16November13
The best way to describe what happened with the creation of Epoch is via an affidavit before the South Dakota division of banking from Wai Yee Christine Ma.
Here is the affidavit.EX 3 Affidavit WaiYeeChristineMa 29June10
Epoch Star Limited (“Epoch”) is a special purpose entity (“SPE”) incorporated in the British Virgin Islands and has its sole office there. Epoch is wholly-owned by Pine Street Special Opportunity Fund I (“Pine Street”), a fund incorporated in the Cayman Islands. Its sole office is there. Epoch and Pine Street are both managed by Anvil Asia Partners (“AAP”), a Cayman Islands-incorporated company. I am a director of Anvil Asia Partners. One of my responsibilities is to manage, with others, Epoch’s business.
Pine Street has less than ten investors. None of those investors is a bank or financial institution or in the sole business of lending money. Pine Street is not regularly engaged in the business of lending money in South Dakota or elsewhere in the United States. None of Epoch, Pine Street and AAP has any business office in South Dakota or elsewhere in the United States. AAP is a professional fund manager, and is not engaged in the business of lending money in the United States. It is not a bank or other type of financial institution. None of Epoch, Pine Street and AAP is a related party of NBP.
This company, Epoch, was created with the sole purpose of loaning $30 million at an interest rate of 29%. The money was set up as a loan after the funds from the EB-5 program were not enough. This means that millions were sunk into the Northern Beef Packers and then millions more were, with Epoch and yet another EB-5 influx of cash. That is on top of $4.3 million in state tax dollars, via Fly Over Wire. Yet, the company is still bankrupt.
Here is page 1 EX 4 SDBankingFindingsofFact 01July10and page 2EX 5 WireTransfer December2007 of bank statements showing the transactions involved between Epoch and NBP. It shows the millions of dollars being used.
Here is correspondence by Rory King esq. that shows the government, through Richard Benda and the South Dakota Division of Banking, was watching what was occurring.EX 1 KingCorrespondence
Mike Rounds keeps saying that he was not aware of what was going on with the EB-5 program. With multiple parts of his government taking part in some aspect where all of this was concerned, how could he not. Some of these people involved may be regular bureaucrats of the state government, but Benda held an appointed position. This shows that there was an investigation being done by the South Dakota Department of Revenue and Regulations, Division of Banking. It was making news in that state. Mike Rounds and Dennis Daugaard would have had to be asleep at the wheel. The other question is, where was the legislature while these millions were being thrown around.
Furthermore, if Rounds was so oblivious, why was no one saying anything to him, considering the attention from everyone. Here is some of why the state was involved, via a Bob Mercer article.
Sioux Falls lawyer Steve Sanford represented Epoch before the Banking Commission. He explained that Epoch sought the declaratory ruling because the participants wanted assurance that a state lending license wasn’t necessary.
The request for a declaratory ruling from the commission was received June 11 by the state Division of Banking. Asked why a decision by division Director Roger Novotny wasn’t sufficient, Sanford replied: “Because so much was at stake.”
He said the commission has clear authority under state law that supersedes the director’s power to make administrative decisions.
“I don’t think I’m paranoid. In this instance, I’m trying to be extremely careful,” Sanford said.
Aberdeen lawyer Rory King represented Northern Beef at the hearing.
“This is the last condition of an imposing checklist to be fulfilled,” he told the commissioners.
He said nearly all lien holders have consented to payment-schedule agreements. The Rounds administration was represented by one of the governor’s Cabinet members, Secretary of Tourism and State Development Richard Benda.
This is yet another piece of the puzzle that needs to be seen. Some of this has been uncovered, but with this, the Tea Party Tribune hopes to clear up even more. There are clear reasons why the people of South Dakota needs to start questioning what is happening in their state government.
The next article will start the history of this program that became so involved in South Dakota and shows a lack of leadership on the part of the Governor’s office.