Barth Sues Rounds, Others Over EB-5 Matter
Democratic Minnehaha County Commissioner Jeff Barth filed a petition in U.S. District Court on Monday requesting that former governor and Republican U.S. Senate candidate Mike Rounds and others preserve or turn over files from the South Dakota Regional Corporation.
The lawsuit is another page in the ongoing EB-5/Northern Beef Packers’ scandal that has dogged Rounds for nearly year since the death of Richard Benda, his former secretary of tourism and economic development. Benda oversaw the foreign investment program.
“The Democrats have officially crossed the line,” responded Rob Skjonsberg, campaign manager for the Rounds campaign. “This looks more like a political filing than legal filing. They are just trying to manipulate every opportunity they can. When you bring something like this into the court system, you’ve done that.”
The SDRC was run by Joop Bollen of Aberdeen who is alleged to have taken the corporation’s papers when he left. Prior to being a private company that contracted with the state, it was the called South Dakota International Business Institute and was an arm of Northern State University in Aberdeen.
Also named in the petition as respondents are former South Dakota Board of Regents executive director Robert “Tad” Perry and Aberdeen attorney Jeffrey Sveen.
The petition is captioned a “pre-complaint petition to preserve evidence” and seeks discovery under an expansive view of Rule 27 of the federal rules of civil procedure.
Barth, who is suing on his own personal behalf and on behalf of the Minnehaha County Commission, alleges that “The respondents will be sued for, or have direct knowledge of, among others, allegations of fraud & and conversion regarding the operation and oversight of the South Dakota Regional Center.”
Barth alleges that the respondents “knew of, should have known of, or directly engaged in the implementation of manipulative devices” regarding the EB-5 program.
He alleges that the respondents converted the management and control of the former South Dakota International Business Institute at NSU to SDRC. Barth says the respondents “Fraudulently steered immigrant investors into projects that were not viable.”
The petition also alleges that the respondents “failed to ensure that tens of millions of dollars in fees harvest by the fraudulent conversion of the management” of SDRC “were remitted to their rightful owners—the taxpayers and citizens of the State of South Dakota.”
It also alleges that the respondents received financial gain, but offers no proof in the petition.
Barth is asking the U.S. District Court for an order “directing the Respondents to preserve physical evidence and preserve related material” regarding the SDRC. Specifically, Barth is asking for what he calls “The File” that includes the conversion contract between the SDIBI and SDRC dated Jan. 15, 2008.
Barth also alleges that “several other entities and persons” are considering joining the contemplated action, but does not say who they are.
The petition lists as potential witnesses Bollen, Gov. Dennis Daugaard, Harvey Jewett IV of Aberdeen, Jack Warner, the current executive director of the BOR, John Meyer, NSU’s attorney, Dr. James Smith, NSU president and James Shekleton, the BOR’s general counsel.
The petition was filed sometime Monday. According to the online PACER case file, there is no return of service listed for the respondents who have not yet replied to the petition.