State Reaches Settlement With SDRC, Inc.
PIERRE, S.D. – The State of South Dakota announced today it has settled its two pending civil lawsuits with SDRC, Inc. related to the federal EB-5 program and the South Dakota Regional Center for approximately $1.5 million. The lawsuits, initiated in October 2015, sought to enforce the state’s regional center administration contract with SDRC, which required indemnification funds be maintained for the state’s benefit by SDRC, Inc., as well as to recover expenses the Board of Regents incurred in connection with a California arbitration case.
“Since 2013, the State of South Dakota has worked diligently to resolve the problems stemming from the federal EB-5 program in South Dakota,” said Tony Venhuizen, the Governor’s chief of staff. “Today’s settlement and the recovery of $1.5 million from SDRC, Inc. not only compensates the state for past EB-5 related expenses, but also ensures the state has the funds it would otherwise have had under the contract with SDRC, Inc. to guard against any future claims.”
Under the terms of the settlement, SDRC will immediately pay $546,250 into an existing state-controlled indemnification account, with an additional $81,250 payment by Sept. 1, 2019. Since commencing its civil actions, the state separately recovered an additional $894,633.32 in indemnification funds owed to the state by SDRC, Inc.
The state remains a party to a lawsuit in Hughes County brought against SDRC, Inc. and the state by investors in the former Northern Beef Packers project. The state’s motion to dismiss the lawsuit is still pending.