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The Deadwood Mountain Grand opened in the summer of 2011 after receiving millions of dollars through the EB-5 program. 

High-stakes litigation involving the Deadwood Mountain Grand casino-hotel, Chinese investors and the controversial EB-5 program has been stayed for 90 days while the opposing sides work to settle their dispute privately.

U.S. District Judge Charles Kornmann ordered the 90-day stay Tuesday, after the plaintiffs and defendants jointly moved for it.

In the joint motion, the two sides said they entered into agreements on May 22 that will resolve the litigation if the agreements are effectuated by Aug. 20. No further details were disclosed.

The litigation dates to 2016 and involves 65 Chinese investors who are seeking repayment of $32.5 million in loans they collectively made to Tentexkota LLC, which is the ownership group of the Deadwood Mountain Grand. Court documents say Tentexkota never paid back the money.

The loans were made through the South Dakota arm of a federal government program known as EB-5, which is shorthand for the employment-based fifth preference visa. Foreigners who invest at least $500,000 in a U.S. project that supports at least 10 jobs can earn the EB-5 visa and eventually a permanent residency green card for themselves and their families.

Among the 65 Chinese investors involved in the Deadwood Mountain Grand loans, one withdrew a residency application, but the other 64 were awarded permanent residency.

In earlier proceedings in the litigation, Judge Kornmann said the Chinese investors were entitled to a judgment of $32.5 million, plus interest. Last fall, a lawyer for the Chinese investors filed a memorandum stating that the balance would grow to $43.71 million by Oct. 8, 2018, and would continue to accrue at $10,685 per day afterward.

The only remaining issue to be settled in the lawsuit was whether a judgment would be imposed solely against the Deadwood Mountain Grand’s corporate owner, Tentexkota LLC, or also against eight individual members of the LLC who signed personal loan guarantees. The eight guarantors are W. Kenneth “Big Kenny” Alphin (who is one-half of the country music duo Big & Rich), Timothy J. Conrad, Michael R. Gustafson, George D. Mitchell, Dale Morris, Marc W. Oswald, Ronald W. Wheeler and Dwight P. Wiles.

Tentexkota received the loans in 2010 and 2011 and used the money to help finance the redevelopment of a former gold-mining slime plant into the Deadwood Mountain Grand. 

South Dakota's EB-5 program has been a source of public controversy since 2013, when Richard Benda, a former state government official who worked closely with EB-5 projects, was found dead of what was ruled a suicide. It was later revealed that he had been facing a potential indictment for his alleged theft of $550,000 in state grant money that was intended for a meatpacking plant supported by EB-5 investments in Aberdeen.

In 2017, the man who formerly managed South Dakota's EB-5 program, Joop Bollen, pleaded guilty to the felony crime of unauthorized disposal of personal property subject to a security interest, for which he was sentenced to two years of probation and a $2,000 fine. The case stemmed from Bollen's illegal use of EB-5 funds that his company shared with state government.

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