Truthout85%
This Developer Went From Financial Peril to Billion-Dollar Deals for DHS 31%
By Katya Schwenk39%
7/31/2026, 11:29:26 AM
BS Summary: This article contains 33 faulty reasoning types, including Confirmation Bias, Biased Writer Voice, and Ambiguity (Equivocation), with Negativity Bias as the most egregious example at 24.2% saturation with 584 hits. Analysis detected 4,166 faulty-reasoning hits from 2,412 analyzed words, generating a BS Score of 33.7% and a BS Rank of 31% (20,383 of 29,339 articles). This article is better (less manipulative) than 69.50% of the article peer group.
Last summer, business was looking bad for hotshot Boston developer James Grossmann.
His flashy new construction company, Rise Construction Management, had begun to spiral into financial ruin.
That June, a bank sued Grossmann when he failed to repay a $25 million loan — just one of a mounting number of lawsuits he and his firm were facing from frustrated creditors.
Amid allegations of unpaid invoices, fraud, and evidence tampering, Rise laid off more than half its staff and watched its ambitious development projects collapse.
It was a cautionary tale for the city’s flagging commercial real estate industry, Grossmann told local press.
But as Grossmann’s company fielded more than a dozen lawsuits and he tried to salvage his reputation, his name began to appear in connection with far more lucrative dealings: Immigration and Customs Enforcement (ICE)’s massive spending spree on real estate for “mega” detention centers.
Earlier this month, the Department of Homeland Security purchased two prisons from CoreCivic, one of the world’s biggest private prison companies and a longtime ICE detention contractor.
The deal was massive: The government bought the two facilities for $1.5 billion.
In a public notice to its investors, CoreCivic disclosed the name of the agent working with the Department of Homeland Security to close the deal: James Grossmann of SK2, LLC.
It wasn’t the first time Grossmann’s name had surfaced in connection with the Department of Homeland Security’s real estate dealings.
As grassroots research group Project Salt Box reported this spring, the developer played a role in at least two of ICE’s purchases of massive warehouses, which, under former Homeland Security Kristi Noem, the agency planned to retrofit into detention centers.
The Lever reviewed court documents, federal contracting records, and business filings to piece together how a Boston developer went from financial peril to playing a central role in billion-dollar deals for the Department of Homeland Security.
The end result is a striking glimpse into the opaque contracts and enormous windfalls that are buttressing ICE’s buildout of its detention apparatus and the shadowy operators who are using President Donald Trump’s immigration crackdown to build — or rebuild — their reputations.
As The Lever revealed this spring, the Department of Homeland Security’s strategy to buy up detention infrastructure could help it evade state and local oversight.
But there has also been speculation that ICE’s warehouse deals — which have cost another $1 billion-plus in taxpayer funds — were designed to shore up a struggling commercial real estate industry.
As More Perfect Union reported, the Department of Homeland Security bought the warehouses in some cases at double-digit premiums, even as demand for large warehouse property dwindled.
Politically connected real estate brokers, meanwhile, got their own cut of the deals.
Reached by phone and asked about his connection to ICE’s prison deals, Grossmann said that he worked “on real estate” and conducted environmental site assessments.
Although he did not dispute that his name appeared in connection with SK2, he said, “I don’t have a contract working with them.”
Grossmann did not respond to The Lever’s additional inquiries.
SK2 also did not reply to a request for comment.
Rise and Fall
Before Grossmann was a struggling developer — and ICE contractor — he was a high-powered construction executive.
He spent two decades at Suffolk Construction, a large Boston construction company, working his way up to become chief operating officer.
Then, in 2019, he struck out on his own, founding Rise and announcing a series of splashy new development projects around the city — luxury condos and state-of-the-art biotech research labs.
Over the next three years, Rise saw rapid growth.
One glowing profile in the local press in 2022 remarked that “the young company must be doing something right.”
Grossmann and his business partners were projecting revenue to triple to $150 million within the year.
But by the fall of 2023, Rise began to quietly collapse.
Since 2021, the company had been slowly accruing lawsuits from a fleet of subcontractors who said they hadn’t been paid, and that fall, the property owner of a condo project Rise was working on realized something was amiss.
In January 2024, the property owner sued Rise and accused the company of a “massive fraudulent billing scheme.”
Rise had allegedly been accepting money from the owner to pay the project’s subcontractors, but instead putting it toward other unrelated expenses.
In April, a judge awarded a $20 million judgment in favor of the property owner in the case.
In April 2024, a different property owner said in court that Rise had “secretly worked to destroy” records related to a housing development after allegedly lying about its payments to subcontractors — by stuffing records in garbage bags, throwing them in a dumpster, and then removing the dumpster from the premises.
(Rise and Grossmann vigorously denied these allegations and said the records were preserved digitally; a judge has not yet ruled on the claims.)
Within a year, Rise Construction saw a flurry of other lawsuits, including two from banks related to $25 million and $10 million loans that had gone unpaid.
Most of these suits, including the two filed by banks, are still pending.
The company was in “perilous financial condition,” one bank told a judge in court.
Amid his financial distress, Grossmann had also apparently failed to keep promises closer to home.
In September 2023, his brother’s elderly father-in-law sued him over a slate of allegations including misrepresentation and unjust enrichment.
The father-in-law had sold Grossmann his family home, under the impression that Grossmann would develop it into condos and give him a cut of the profits — but the money never arrived.
In the father-in-law’s lawsuit, he accused Grossmann — who was building a new $2 million home during this period — of potentially “misappropriating” the funds and using them to build his own home.
The dispute is ongoing.
As Grossmann told it, Rise was caught up in the commercial real estate bust in Boston after the Fed raised interest rates in the fall of 2022.
But by the summer of 2025, as lawsuits piled up, it was clear that interest rates were far from the company’s biggest concern.
It was around this time that a new company was anonymously incorporated in Wyoming, using Grossmann’s personal address, and registered to do business with the federal government.
It was called Rudiarius — the name for a Roman gladiator who had earned his freedom.
The Wild West of Warehouse Deals
The Trump administration’s massive deportation spending spree, which kicked off with a $75 billion handout to ICE in last summer’s One Big Beautiful Bill Act, has proved a singular opportunity for enterprising government contractors hoping to strike gold.
But some traditional actors appear to have been reluctant to get overly involved with ICE’s more unorthodox plans.
That includes Noem’s initiative to convert giant distribution centers, built for companies like Amazon, into massive holding facilities for ICE detainees.
Even ICE’s private prison contractors, which have their own history of alleged abuses at their facilities, balked at this proposal.
“I’m sure a lot of what you might call reputable firms or large, well-known household brands don’t want to touch this stuff with a 10-foot pole,” said Joshua Harris, an economist and the academic director of the Fordham Real Estate Institute, noting that companies might worry about their public image or changing political headwinds down the line.
To carry out the plans, ICE instead turned to new, untested, and more risk-tolerant firms.
The Department of Homeland Security’s reliance on little-known contractors — some with personal ties to the White House — has drawn accusations of cronyism and corruption at the agency.
The first rumors around the warehouse program surfaced last fall.
By January, the agency was starting to close deals on the facilities, and it awarded a sole-source contract to a brand-new firm incorporated in Puerto Rico, SK2 LLC, to help ICE acquire the facilities.
Bloomberg identified two business partners behind the new venture.
One was Steven Kelley, a longtime defense contractor who, Bloomberg reported, left the commercial real estate services firm CBRE to work on the warehouse project with ICE.
The other, Scott King, also had a government contracting background.
Kelley had originally proposed that CBRE — one of the largest commercial real estate firms in the world — work with the Department of Homeland Security on the project.
But CBRE’s leadership declined, and Kelley struck out on his own.
Months later, SK2, Kelley’s new firm, won a $6 million federal contract to secure the warehouse deals.
As SK2 began to work on the warehouse purchases, which were drawing mounting public opposition, it struggled to find willing business partners.
Originally, the contractor was working in partnership with a tribe in Kansas, the Prairie Band Potawatomi Nation, on the initiative.
But after facing public pressure, the tribe pulled out of the deal.
As the spring went on, local Boston news outlet the Boston Contrarian reported that SK2 was offering attorneys at a prominent Boston law firm “eye-popping” sums of money to work on its ICE warehouse deals.
The law firm, which the outlet didn’t name, reportedly declined, fearing reputational damage.
It was around this time that Grossmann’s name began to surface in relation to ICE warehouse purchases.
His signature appeared on a January memo that the Department of Homeland Security sent to the city of Social Circle, Georgia, about a warehouse the agency had purchased in the city.
In the document, Grossmann signed off on claims that converting the 1 million-square-foot industrial warehouse into an ICE holding facility would have “no adverse effect on the community.”
In April, amidst the still-ongoing court battle over ICE’s purchase of a warehouse in New Jersey, improperly redacted documents first reported by Project Salt Box revealed that Rudiarius, the new Wyoming firm associated with Grossmann, had commissioned the environmental assessment of the warehouse.
Although Grossmann’s name wasn’t on Rudiarius’ July 2025 filing documents, the original company address was a $2 million home in Dorchester, Massachusetts.
Court documents obtained by The Lever show that this address is Grossmann’s personal residence.
The warehouse purchases were put on pause after Noem’s departure, and there were some indications that the agency planned to sell off the properties.
But so far, ICE still owns the warehouses, as an internal feud rages over their future.
At the same time, ICE has moved forward with the other prong of its new detention model: Buying private prisons that are already in operation.
To close these deals, ICE has turned to the same real estate moguls that it used to buy up warehouses — including Grossmann.
His name appears on the $1.5 billion purchase agreement between the Department of Homeland Security and CoreCivic, which the private prison giant disclosed to its investors in July.
This time, Grossmann’s name was not associated with the Wyoming firm incorporated with his address but a different company: SK2.
Operation Bailout
To Em Knepp, a researcher with Project Salt Box with experience in government contracting, Grossmann’s story “follows the trend of the current administration, or [the Department of Homeland Security] specifically in this case, bailing out people who are in financial trouble — whether it’s Grossmann, here, or the various companies who owned failing warehouse assets.”
The layers of shell companies involved obscure how much money, exactly, Grossmann and other players are making from ICE’s billion-dollar real estate deals.
The Department of Homeland Security upped SK2’s initial $6 million contract in June by $300,000; it is now set to end in September.
It’s unclear, though, how the funds are being divided among SK2’s partners, or if there are subcontractors involved.
The scope of SK2’s role is also somewhat unclear.
Based on the documents released by CoreCivic, which named Grossmann and SK2, Harris, of the Fordham Real Estate Institute, told The Lever he believed the company was likely acting as an “acquisition and due diligence agent” acting on behalf of the Department of Homeland Security to secure the deal.
There are likely even bigger deals to come.
Initial planning documents for ICE’s purchases of its own prisons included 10 facilities, according to records seen by the Washington Post.
The two CoreCivic facilities in California included in the document were sold to the Department of Homeland Security this month.
But so far, GEO Group, another major private prison company, has not sold ICE any of the at least six facilities that the Department of Homeland Security has expressed interest in — although the company’s CEO told investors in May that the company was discussing potential sales with ICE.
Those prisons could include facilities in California as well as in Tacoma, Washington, and Aurora, Colorado.
It might not be a coincidence that ICE has focused on buying up detention centers in more liberal states, where they have been subject to more aggressive state oversight and lawsuits over labor violations.
In Washington state, lawmakers have been trying to force GEO Group to allow state officials access to the Tacoma facility to conduct health and safety inspections.
But if the facility were federally owned, it could shield the prison from such local oversight, experts told The Lever in March.
These deals offer significant windfalls for the brokers working to close them.
In addition to SK2, the real estate giant CBRE, which had declined a more public-facing role in the deals, was still willing to facilitate the CoreCivic prison transaction, according to the purchasing agreement, likely entitling it to a commission in the sale.
CBRE, which also represented property owners of multiple commercial warehouses that were considered by ICE, did not respond to The Lever’s request for comment.
In recent weeks, ICE has adopted a new strategy that could also prove a boon for the commercial real estate sector.
As Project Salt Box reported this month, the agency has been advertising new construction opportunities for contractors to expand its current facilities and build entirely new ones, rather than simply purchasing existing prisons or retrofitting warehouses.
The maximum value of the new contracting vehicle, over several years, is $10 billion.
In an interview with the Boston Contrarian earlier this year, Grossmann elided any mention of his new side hustle.
He told the outlet in March that he was focused on finishing Rise’s remaining projects.
The company was now operating with less than a quarter of the staff it once employed, and not accepting any new work.
“It has been a really rough ride, it really has,” Grossmann said.
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7speakers12%attributed speech2,132writer words
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100%flagged-word coverageJoshua Harris
57 attributed words20% of attributed speech85% writer coverage
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