ABERDEEN, SD – Money intended to help Northern Beef Packers LP was improperly redirected, according to an investigation by South Dakota Attorney General Marty Jackley.

The probe revealed $550,000 of a $1 million payment intended to reimburse Northern Beef Packers for construction or equipment costs instead was used to pre-pay loan monitoring fees for the South Dakota Regional Center, Inc. (SDRC). The SDRC and Richard Benda, former secretary of the South Dakota Department of Tourism and State Development, recruited foreign investors willing to invest or give loans to state projects including the now-closed Northern Beef Packers plant in Aberdeen. The investments were tied to the federal EB-5 program, which encourages foreign investment of at least $500,000 in exchange for qualifications to secure permanent US residency.


"SDRC utilizes the services of the California and South Korea based law firm Hanul Professional Law Corporation to identify and recruit potential federal EB-5 investors to process the required US Citizenship and Immigration Services documentation," Jackley said in a letter to South Dakota Gov. Dennis Daugaard. In April, Daugaard requested the state Attorney General's Office launch an investigation into allegations of financial misconduct involving reimbursement vouchers in the Governor's Office of Economic Development.

Benda, who was Northern Beef's former loan monitor, died from a self-inflicted gunshot wound on Oct. 22, according to the Attorney General's Office.

The state’s investigation also revealed that Benda double billed the state for trips he took to China and Las Vegas on state business.

"Because the person who submitted the vouchers is deceased, there will be no further action by the Attorney General's Office on the voucher matter," Jackley said.

Federal investigators also are conducting their own investigation into the finances and the EB-5 program behind funding for Northern Beef Packers. Jackley said: "I will naturally continue to assist federal authorities regarding these concerns including the propriety of the payment of the $550,000 loan monitoring fees toward a federally EB-5 funded project."