EB-5

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Raymond James settles with Vermont for $5.95 million

MONTPELIER — The state has reached a $5.95 million settlement with Raymond James and Associates in connection with a massive EB-5 fraud case in the Northeast Kingdom. Department of Financial Regulation Commissioner Susan Donegan announced the settlement with the financial firm Thursday, noting the department found “multiple instances of non-compliance with supervisory requirements and Vermont law.”

“DFR’s responsibility is to ensure that Vermont’s securities laws are followed, and that investors are protected,” Donegan said in a release. “Since the SEC’s seizure of the Jay Peak-related EB-5 projects, investors have been rightly concerned about possible recovery of funds. This settlement contributes to their restitution.”

The settlement follows an investigation and the filing of fraud charges in April against Bill Stenger and Ariel Quiros, the principals of several development projects, including Jay Peak, using the federal foreign investor program. Quiros and Stenger are accused by both the federal Securities and Exchange Commission and the state of misusing about $200 million of the $350 million they raised from foreign investors in $500,000 increments. Continue Reading →

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Shumlin administration releases emails it sought to delete

MONTPELIER — The Shumlin administration has released the first batch of emails sent and received by five former staffers that it sought to destroy last month, a request that drew heavy criticism because it came just days before state and federal fraud charges against two Northeast Kingdom developers were revealed. The first batch of emails — about 5,500 — that were slated for deletion was released to the Vermont Press Bureau Friday as part of a public records request. The administration agreed to release the emails after they were reviewed to redact protected and privileged information. Scott Coriell, spokesman for Gov. Peter Shumlin, said all members of the governor’s staff, excluding the governor, have spent the past week completing the request, which required about 200 staff hours. There are tens of thousands of emails that are subject to the records request, according to Coriell, and the administration has no precise timeline for when the remaining records will be released. Continue Reading →

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Now Vermont, Too, Shows Why National EB-5 Reforms Are Needed

ears ago when I began working to reform the national EB-5 program, the problems we saw seemed far removed from the many promising EB-5 development projects in Vermont. It is heartbreaking, and it is maddening, to see such problems here at home. It is now painfully clear to all Vermonters that the EB-5 Regional Center program is flawed. The program once promised to transform the Northeast Kingdom and other underserved communities through millions of dollars of investment at no cost to taxpayers. Yet it has become mired in fraud and abuse across the country, and unfortunately such allegations have now reached our state. Continue Reading →

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Documents show feds were onto Quiros long before state launched probe

ederal authorities launched an investigation into Jay Peak’s EB-5 projects nearly a year before state officials had their first inkling that something illegal was afoot. And documents on file at the Securities and Exchange Commission indicate that the agency had strong forensic evidence of a massive fraud well before the changes in state regulatory oversight that Gov. Peter Shumlin now credits for taking down the “Ponzi-like” scheme. On May 22, 2014, at about 10:30 in the morning at SEC offices in Miami, Florida, federal lawyers grilled Ariel Quiros about a series of financial transactions detailing alleged misappropriation of funds from the foreign investors. The 245-page transcript of their day-long interview reveals pieces of the evidence the SEC would later use to file dozens of federal civil charges against Quiros, the owner of Jay Peak, and Bill Stenger, the resort CEO that federal authorities say facilitated the scam. SEC lawyers conducted that deposition seven months before a memorandum of understanding that shifted the state’s financial oversight of Quiros’ and Stenger’s dealings away from the Agency of Commerce and Community Development, and over to the Department of Financial Regulation. Continue Reading →

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Story & Video: Gubernatorial candidates pounce on alleged EB-5 fraud, call for transparency and release of documents

https://youtu.be/1W3BtbhRw4c

MONTPELIER — Candidates seeking to succeed Gov. Peter Shumlin are calling for transparency and one is seeking an independent commission to review the state’s involvement as a federal and state fraud case against two Northeast Kingdom developers proceeds. Democratic Gubernatorial candidate Peter Galbraith, a former Windham County state senator, held a State House news conference Monday to call for an independent commission appointed by the chief justice of the Vermont Supreme Court to investigate the state’s role in the fraud case against Bill Stenger and Ariel Quiros. The two men are facing civil litigation filed by the federal Securities and Exchange Commission and the state for allegedly misusing $200 million in investor funds they raised through the EB-5 Immigrant Investor Program. Quiros is accused of using $50 million of investor funds for his own personal gain. Galbraith said the two men have contributed significant amounts of money to Gov. Peter Shumlin and the Vermont Democratic Party and it should be determined if those contributions resulted in any favorable treatment for the EB-5 projects led by Quiros and Stenger at the Jay Peak and Q Burke Mountain resorts, and other projects in Newport. Continue Reading →

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Shumlin administration defends its request to delete emails

MONTPELIER — The Shumlin administration sought Monday to disassociate its request to delete the emails of five former staffers from a major civil fraud case revealed last week against two developers in the Northeast Kingdom who used a foreign investor program overseen by the state to raise capital. Top administration officials briefed reporters on its request made prior to the public revelation of fraud charges against Bill Stenger and Ariel Quiros to delete the emails of former administration staff members that are more than three years old. The request to delete emails came under fire over the weekend after it was revealed in a VTDigger.org article. “To conflate them is absolutely incorrect and inaccurate,” Darren Springer, chief of staff for Gov. Peter Shumlin, told reporters Monday. One of the former staffers in question, Alexandra MacLean, left the governor’s office for a job at Jay Peak, where many of the EB-5 Immigrant Investor Program development projects headed by Stenger and Quiros took place. Continue Reading →

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Federal and state authorities allege massive fraud in Northeast Kingdom development projects

MONTPELIER — The federal Securities and Exchange Commission on Thursday unveiled a civil fraud complaint charging a “Ponzi-like scheme” involving the main actors in major Northeast Kingdom development projects for misusing $200 million dollars of foreign investors’ money, while state officials filed a state-level complaint mirroring the federal charges. Ariel Quiros and William Stenger, owners of Jay Peak Resort and the principals heading up eight different development projects through the federal EB-5 Immigrant Investor Program, have raised $350 million in $500,000 increments from foreign investors seeking permanent residency in the U.S. through the investor program. Federal and state officials on Thursday said $200 million of the money raised was misused, including $50 million by Quiros for his own personal benefit. The eight ambitious EB-5 projects include improvements at Jay Peak and Q Burke Resorts and a biomedical research facility in Newport. According to the state’s civil complaint, filed in Washington County Superior Court on Thursday, the duo used various limited partnership companies to raise the funds. Continue Reading →

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Shumlin’s office weighs in on EB-5 director’s departure

MONTPELIER — The director of the EB-5 Vermont Regional Center has resigned to take a job at Mount Snow that will involve working on the resort’s EB-5 project, leading Gov. Peter Shumlin to raise concerns about potential conflicts of interest. Brent Raymond submitted his resignation last Thursday, Secretary of Commerce and Community Development Patricia Moulton said. Raymond provided for 30 days notice in his resignation letter, but Moulton said she and other officials determined Raymond could not continue to oversee projects because he would soon be advocating for one. His last day on the job was Monday. “His departure is amicable. Continue Reading →

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