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Feds Looking into South Dakota Beef Plant

November 1, 2013

Federal authorities are investigating the finances of an idled beef plant and a federal immigration program that supplied much of its funding, two former chief players in the company told The Associated Press on Thursday.

The revelation comes a day after Gov. Dennis Daugaard said the state's economic development office was being investigated. Daugaard declined to provide details of that investigation, and state officials on Thursday refused to say whether the investigations are the same. News of the probes comes soon after a former top official in the development office was found dead with a gunshot wound.

Dennis Hellwig, who stepped down as Northern Beef Packers' general partner more than four years ago, and Bob Breukelman, the plant's former construction engineer, told the AP they have been questioned by federal investigators about the idled Aberdeen plant's financial dealings and the federal EB-5 program, in which foreign investors can secure permanent residency for as little as $500,000.

"There were some discrepancies in the way the EB-5 program was being handled," Breukelman said.

Neither Hellwig nor Breukelman would go into detail about the agents' questions or their responses.

On Wednesday, Daugaard told the Sioux Falls Argus Leader an investigation was underway into the Governor's Office of Economic Development prior to Daugaard's administration involving possible financial misconduct. Daugaard declined to provide details of that inquiry, but said there "has also been a federal investigation."

Daugaard's statement was made public a day after the funeral of Richard Benda, who was found dead with a gunshot wound on Oct. 22 in a grove of trees near Lake Andes. Benda, who had served as secretary of the department handling tourism and economic development from 2006 to 2010 under former Gov. Mike Rounds, was Northern Beef's former loan monitor.

South Dakota Attorney General Marty Jackley said Benda's death remains under investigation, and a final autopsy report is expected in two weeks to a month.

"We're treating that as a crime scene because there was a gunshot wound indicated," Jackley said.

Neither Jackley nor Daugaard's spokesman, Tony Venhuizen, would comment on whether the investigations Daugaard revealed Wednesday involve Northern Beef, Benda or the Aberdeen-based South Dakota Regional Center, which arranged EB-5 loans to the beef plant and other projects in the state.

Allegations about the South Dakota center have drawn the attention of U.S. Sen. Charles Grassley of Iowa, the ranking Republican on the Senate Judiciary Committee. Grassley in February sent a letter to the U.S. Citizenship and Immigration Services asking the agency to look into the "possible violations."

Northern Beef Packers opened its $109 million state-of-the-art facility on a limited basis in 2012 after years of delays. Its owners filed for Chapter 11 bankruptcy protection less than a year later, saying they did not have enough money to buy cattle for slaughter. With $138.8 million in liabilities and just $79.3 million in assets, according to court documents, the plant laid off most of its employees.

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RELATED TOPICS: Beef, Cattle, Packer, Beef News

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