Company Accuses Kristi Noem's Son-in-Law of Stealing Data Center Client

A1 Development alleges Kyle Peters diverted business while working for the firm

Published on Feb. 27, 2026

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A Watertown city councilor and the public face of a potential data center project in Sioux Falls is being sued by his former employer, A1 Development. The company alleges that Kyle Peters, who is the son-in-law of South Dakota Governor Kristi Noem, pilfered clients while working for A1, including a client looking to purchase $170 million in land for data centers. A1 is accusing Peters and his business partner Josh Teigen of breach of contract, breach of fiduciary duty, and other charges.

Why it matters

This case highlights the potential conflicts of interest and abuse of power that can occur when government officials or their family members are involved in private business deals. It also raises questions about transparency and accountability in economic development efforts in South Dakota.

The details

According to the lawsuit, Peters joined A1 Development in May 2021 after previously working in the South Dakota Governor's Office of Economic Development under Kristi Noem. In 2024, Peters was allowed to buy into A1 as an owner through his company, Bad River Development. However, in October 2025, Peters sought to withdraw from A1, prompting the company to review his emails, which allegedly revealed he had been diverting clients to himself and Teigen. A1 claims it paid for Peters' travel to meet with clients that he then created side deals with.

  • Peters joined A1 Development in May 2021.
  • In 2024, Peters was allowed to buy into A1 as an owner through his company, Bad River Development.
  • In October 2025, Peters sought to withdraw from A1, prompting the company to review his emails.

The players

Kyle Peters

Watertown city councilor and public face of a potential data center project in Sioux Falls, who is being sued by his former employer A1 Development for allegedly diverting clients.

A1 Development

A Watertown-based company that provides development services to corporations in South Dakota, including site selection, permitting, and construction management.

Josh Teigen

Business partner of Kyle Peters who is also named in the lawsuit, and previously served as the commissioner of the North Dakota Department of Commerce.

Kristi Noem

Governor of South Dakota and mother-in-law of Kyle Peters.

Client A

A client of A1 Development that was seeking to purchase $170 million in land in South Dakota for data centers, and allegedly offered Peters and Teigen paid positions.

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What they’re saying

“The claims made in the complaint are inaccurate and misleading. This dispute arises from a complex business separation, and the allegations reflect only one side's characterization of events. We intend to respond fully through the legal process and are confident the facts will show that Kyle and Bad River acted appropriately.”

— Steve Landon, Lawyer for Kyle Peters

“A1's complaint 'reads like a fiction novel.' My company had referred business to A1 because they hoped A1 would also be successful.”

— Josh Teigen, Commissioner of the North Dakota Department of Commerce

What’s next

The judge in the case will decide on whether to allow Kyle Peters to withdraw from A1 Development, despite the company's operating agreement limiting member withdrawals.

The takeaway

This case highlights the potential conflicts of interest and abuse of power that can occur when government officials or their family members are involved in private business deals, raising questions about transparency and accountability in economic development efforts in South Dakota.