Securities and Exchange Commission

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Scott administration recommends closing EB-5 center as feds send termination notice

MONTPELIER — Gov. Phil Scott released a report from his administration Monday evening recommending the shut down of the state-run EB-5 regional center alongside a notice from the federal government that it plans to terminate it. Scott ordered a review of the regional center, which oversees projects utilizing the federal foreign investor visa program, after a financial settlement in a massive fraud case was announced earlier this year. The owner of Jay Peak Resort, Ariel Quiros, and the resort president, William Stenger, were accused last year of a massive fraud scheme involving several EB-5 projects in the Northeast Kingdom by the U.S. Securities and Exchange Commission and the state. Quiros was accused of using more than $200 million in inventor funds for his own private use in what investigators labeled “a massive Ponzi scheme.”

On Monday, Scott released a notice from the U.S. Citizenship and Immigration Services outlining its intent to close the state-run center, citing the fraud case and the state’s lack of oversight as key reasons for the pending closure. Scott’s office said Monday that he ordered the Vermont Department of Financial Regulation to review the center’s operations in July, after a court approved a settlement with financial firm Raymond James. 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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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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