EB-5 started as a national pilot program in 1992 with the goal of increasing foreign investment in businesses big and small throughout the United States. It is also used as a job creation device, asking for a monetary investment often in exchange for a better chance at immigration favors like green cards or work visas.
Now, an Aberdeen beef packing plant is in the middle of a federal investigation involving the use of EB-5 and is having its financial records reviewed.
Problems with EB-5 are not isolated to South Dakota. Earlier this month, an investigation into misuse of EB-5 funds by a business in Texas began after it was discovered the investor's money was used for personal items by the business owner.
EB-5 problems are being reported out of California and Missouri as well.
As for South Dakota, their EB-5 program started in 1994 to aid the Governor's Office of Economic Development, an office once led by the late Richard Benda who, right after his time in office, worked for Northern Beef Packers.
Northern Beef Packers received millions of dollars from the Governor's Office of Economic Development. It ended up filing for bankruptcy this past July.
An official explanation about the alleged misconduct in the economic development office is not yet available.