Business & Economy

A sense of betrayal: EB-5 investors go public

Jay Peak’s Tram Haus Lodge. Photo by Justin Cash/skivermont.com
Jay Peak’s Tram Haus Lodge. Photo by Justin Cash/skivermont.com

A group of EB-5 investors says they are growing increasingly frustrated with Northeast Kingdom developer Bill Stenger and are speaking out publicly for the first time.

The group of 20 investors in the Tram Haus development at Jay Peak Resort, led by Tony Sutton of Clermont, Florida, questions whether Stenger had the right to change the terms of their original investment and whether the new financial deal imposed by Jay Peak is as good. They also claim Stenger has withheld financial information they say they are entitled to under state law and that state officials are not doing enough to protect their interests.

They say they were blindsided when Stenger unilaterally converted their shares in Tram Haus Lodge into IOUs in August 2013. They didn’t receive documents associated with the transaction until May of this year.

Stenger has said that he was within his legal rights to replace the original partnership agreement with a new deal. He and his partner, Ariel Quiros of Miami, say the new arrangement is a better deal for the investors.

Stenger has also denied in emails to investors that he is keeping them in the dark and withholding information. He has acknowledged, however, that he communicated poorly with the investors and said this summer that he needed to work to gain back their trust.

For some of those original investors, according to interviews and documents reviewed by VTDigger, that trust remains elusive.

Sutton, the spokesman for the investors, says they now not only question whether Stenger had the right to change the terms of their original deal, but they also want the developers to account for how their investment money was spent.

“I want to see actual tracing of where my investment went, what the funds were used for and the financial statements for the partnership during the time I was an owner of the hotel,” Sutton wrote in a letter that was copied to state officials.

The group of 20 disgruntled investors that Sutton leads are among the first 35 to invest $500,000 each with Stenger through the EB-5 federal visa program, which allows foreign investors to obtain a “green card” allowing them to live in the United States.

The number of investors in Jay Peak has grown to 1,089 immigrants who have put up $544.5 million toward a series of projects Stenger and Quiros hope to develop.

The money from the original 35 investors went to build one of the centerpiece projects, the Tram Haus, a luxury hotel at Jay Peak Resort, a ski area and vacation resort near the Canadian border. Other projects in the Northeast Kingdom Economic Development Initiative include AnC Bio, a Newport-based biotech company, and Q Burke, a ski area near Lyndonville.

Tony Sutton, one of 35 Jay Peak Phase 1 investors. Courtesy Photo
Tony Sutton, one of 35 Jay Peak Phase 1 investors. Courtesy photo

The investors’ stories

Many of the investors who Sutton says are unhappy with Stenger come from middle-class backgrounds. A number of them say they sold their homes and scraped together retirement funds to invest in the Tram Haus and a chance to come to the United States.

One investor, who wanted to remain anonymous, ran a carpet cleaning business in the United Kingdom. He said he is financially worse off now than he was before investing in 2008. The investor leases a car, lives in a 1,700-square-foot home and is struggling to pay his mortgage.

“We really do watch how every dollar is spent and when you have two daughters to put through college, every dollar really does count,” he said.

Under the EB-5 program, investors are told there is no guarantee they will get their investment back, but the Tram Haus investors say Stenger personally promised them that they would get back their $500,000, and possibly additional money, as soon as last year.

The investors were shocked when Stenger eliminated their ownership shares in the property and substituted their $500,000 interests with unsecured loans on Aug. 31, 2013.

One investor said the promissory note is “no better than toilet paper.”

Stenger has the authority to change the financial deal with the investors under the limited partnership agreement, but legal sources say to do so unilaterally is unusual and that Stenger had an ethical obligation to protect the financial interests of the investors.

The limited partnership agreement between Jay Peak and the investors says the general partner (Stenger) does not have the authority to amend the agreement in a way that “dilutes the interest of the limited partner.” Dissolving the partnership agreement and replacing it with IOUs could constitute a dilution, according to legal sources interviewed for this story.

But these protections for investors were overridden by other clauses in the agreement. Bill Kelly, legal counsel for Jay Peak, says that the agreement includes “clear language authorizing” Stenger to dissolve the partnerships.

Stenger has said he followed the terms of the agreement and that the only thing he did wrong was poorly communicating with his investors, which he called a mistake and apologized for repeatedly. For example, it was May before Jay Peak sent the documents — the redemption agreement and an unsecured, 10-year promissory note with a large balloon payment at the end — to investors, even though the transaction was executed in August 2013.

In an email he sent investors, Stenger said: “Even though your approval was not required, common courtesy dictated that communication take place at the time of the transition. This has created mistrust and I regret this very much.”

Maurice Price, an investor from England who lives near Sarasota, Florida, said Stenger’s apology does little to assuage the sense of betrayal the investors feel. He says altering the agreement without the partners’ consent is reprehensible.

“… if they had presented it the way they’ve done it, I can’t believe anyone would have put their money in.”

“I’ve been shafted by a well-calculated system that was well-known from the outset because if they had presented it the way they’ve done it, I can’t believe anyone would have put their money in,” Price told VTDigger.

It was not the first time Stenger amended the original partnership agreement. In 2008, the developers amended the agreement to move money out of an escrow account. They amended it again in 2010 so that Stenger’s partner, Ariel Quiros, could purchase shares of the property to compensate him for covering cost overruns on the Tram Haus project.

Then, in 2013, another amendment eliminated the original investors’ Class A shares and transferred their assets to the new Class B holder, Ariel Quiros, representing Jay Peak Inc., the resort owner, which then issued the promissory notes.

Stenger and Kelly say the limited partnership agreement gives the general partner the legal right to make amendments without the consent of the limited partners. Jay Peak has yet to provide the amendments to investors.

Sandra Chau, 31, an investor from Hong Kong who lives in Phoenix, says the investors in the group don’t have the money to put up a legal fight against Jay Peak, which she describes as “a big company.”

“They are very clever in protecting themselves legally,” Chau says. “They look at holes and gaps in the agreement. I would say it’s a very unequal transaction.”

Now, in addition to the earlier concerns about changing the terms of their original investment and when they will be paid back, Sutton says the investors also want to see an accounting of how their money was spent by Jay Peak. They say financial reporting from the company, consisting of K-1 tax forms and one-page summaries, has not been sufficient.

“We have never received accounts that comply with generally accepted accounting principles in any form,” Sutton said.

Stenger told Sutton in a July email that he has “exhaustive accounting records on all the items you requested and nothing, nothing exists that we wish to hide or conceal.” He also referred Sutton to a federal filing known as the I829 that “shows where ALL the investor funds were spent.” In another email, he wrote “many other things you requested are operational and will require pulling the statements, invoices, checks, etc.”

Kelly, legal counsel for Jay Peak, wrote in an email to VTDigger that the resort has provided documentation to support a USCIS I829 petition, “which includes the details of every one of the $23,000,000 of expenses that the project paid out to vendors.”

Jay Peak insists on gag order for audit

Sutton says the I829 plan does not give the investors “basic” financial information that would be “a clear, concise audit trail.”

“Under Vermont statutes, we’re entitled to see all the transactions in the books of accounts, … which includes all bank statements, journal entries and balances,” Sutton says.

Sutton and the investors have pooled their resources and hired a forensic accountant. They have insisted that Stenger allow Dr. Michael Crain to review the books. In August, Stenger said accounting staff was on vacation when Crain wanted to visit Jay Peak, and in September, Stenger told the investors they were in the middle of tax season.

This month, Stenger asked Crain and Sutton to sign confidentiality agreements ensuring that the information would not be disclosed. Kelly said Crain doesn’t have rights to “any of the material we hold on behalf of private investors.”

“… we are not going to release Mr. Sutton’s information to anyone without his permission and without an agreement that information will not be released to anyone else without ours or Mr. Sutton’s permission.”

 

“Mr. Sutton had asked us to share his files with Dr. Crain, which we are more than happy to do — in fact we agreed on multiple occasions to accommodate Dr. Crain at the resort — but we are not going to release Mr. Sutton’s information to anyone without his permission and without an agreement that information will not be released to anyone else without ours or Mr. Sutton’s permission,” Kelly wrote in an email to VTDigger.

Sutton and the investors have refused to sign the confidentiality clause. Sutton says Stenger doesn’t have the ability to “gag” the investors. It’s possible that “Crain will go in there and find that Jay Peak has done everything in accordance with best practices and the limited partnership agreement,” Sutton said.

“We’ve said we want to put our minds at rest, we want transparency, we want access to information we are entitled to have, and he’s done everything he can to stop us getting access to the information,” Sutton said. “It’s gone on for months and months and months now and we’re a bit concerned that there is something that they don’t want us to have.”

State on the defensive

In addition to frustration with Stenger, the investors say help from the state has not been forthcoming.

Sutton says, for example, that Brent Raymond, the director of the Vermont EB-5 Regional Center, has not responded to a letter he sent asking Raymond to put pressure on Jay Peak to release certain records.

Raymond told Sutton in May that he would help him obtain financial documents. Raymond also told Sutton that it is Stenger’s “fiduciary responsibility” to provide the financial information. However, in 260 pages of email communication between state officials and Stenger obtained by VTDigger, Raymond did not ask Jay Peak to send financial information to the investors.

Raymond has said that he is looking out for the investors’ best interests and has denied his relationship is “cozy” with the Jay Peak CEO. Yet in email correspondence he called Stenger a “great man,” and coordinated with him on strategy to win back investors’ confidence.

In May, Stenger apologized to Raymond for the delay in getting “detailed materials” about the finances to one of the investors. Raymond replied: “Don’t be sorry. His intent is obvious.”

Under state securities statute (11 VSA 3405), investors are required to be notified if the terms of their partnership agreement are changed and they must be allowed access to tax returns and other information, including contact information for each partner. Sutton says Stenger hasn’t provided that information. Stenger says he doesn’t remember being asked.

Patricia Moulton, the secretary of the Agency of Commerce and Community Development, which oversees the Vermont Regional Center, said the state is watching out for the investors. The state has responded to repeated requests for information from the investors, she said, but “the Regional Center can only push Jay Peak to produce financial records in accord with the Limited Partnership Agreement.”

“EB5 Investors know from the start that their investment is (and must be) at risk. This is one of the conditions of participating in the EB5 program.”

 

“It is essential to keep in mind that our role as a Regional Center is not to regulate the relationship between the investors and the Limited Partnership, nor is it to guarantee the security of any investment in an EB5 Project,” Moulton said. “EB5 Investors know from the start that their investment is (and must be) at risk. This is one of the conditions of participating in the EB5 program.”

In a Oct. 13 commentary published by VTDigger, Moulton wrote that the dissolution of the Tram Haus partnership “was within the authority of the agreement entered into and signed by each limited partner. Mr. Stenger’s action was not in conflict with any federal law or regulations enacted for the EB5 program.”

“We haven’t found anything to suggest illegal behavior, there just has not been good communication, and that’s a problem,” Moulton said.

Sutton says in a counter commentary that Moulton is “far more preoccupied with publicly resuscitating the tarnished reputations of her subordinates, Mr. Stenger and Jay Peak” than she is in helping “the investors get to the bottom of exactly what transpired at Jay Peak.”

The investors say Moulton’s “public exoneration simply adds insult to the injury that years of the Vermont Regional Center’s idleness and failed oversight have already inflicted on the States EB-5 investors, who invested in Vermont’s EB-5 program in good faith and only because of the Vermont Regional Centers assurances of the program’s integrity.”

Moulton said her agency is not defending Jay Peak’s action.

Patricia Moulton, secretary of the Agency of Commerce and Community Development. Courtesy photo,
Patricia Moulton, secretary of the Agency of Commerce and Community Development. Courtesy photo

“Our interpretation of the document appears to allow the General Partner to terminate the limited partnership as long as it did so in a way the fulfills the GP’s fiduciary responsibly and does not violate the covenants of the limited partnership,” she wrote. “We have no evidence from any investor of any covenant violation despite our repeatedly asking for evidence. That is why we have stated to investors they should hire a trusted advisor and/or attorney if they feel Jay has done something that is not authorized.”

After the controversy this summer, in which Stenger acknowledged poor communication, the regional center stepped up oversight of EB-5 projects in the Kingdom. The center is now demanding quarterly reports that were part of the original memorandum of agreement with Jay Peak, but that the center previously never requested.

In addition, Moulton says the center will require project owners to annually self-certify that there have been no material changes made to limited partnership agreements. Any material changes under consideration must be filed with the state in advance, she said.

Kept in the dark

Sutton and the others are speaking out reluctantly, they say, and only after a difficult time trying to find each other and whether they shared the same concerns about their investment.

Sutton and the other 19 dissatisfied limited partners in the Tram Haus, including Sandra Chau, Angie Mann and Maurice Price, say basic information they are entitled to has been withheld by Jay Peak, including contact information for investors they say was requested and not provided.

In January, Sutton said he pieced together the email addresses of the investors from a 2008 email from Jay Peak, got in touch with the 35 investors and eventually worked with 20 of the limited partners to form a coordinated group response to Stenger and state officials.

In addition to Sutton, VTDigger spoke with Chau, Mann and Price for this story. VTDigger also spoke with three additional investors who wished to remain anonymous.

Bill Stenger stands before the future Stateside Hotel at Jay Peak in September 2013. File photo by Hilary Niles/VTDigger
Bill Stenger stands before the future Stateside Hotel at Jay Peak in September 2013. File photo by Hilary Niles/VTDigger

Stenger has said neither he nor his staff recall receiving requests from investors to be put in touch with one another. He disputes the claim that information has been withheld. Kelly, COO and general counsel for Jay Peak, says categorically that “there is no pattern of non-dissemination of information to limited partners.”

Sutton also claims Stenger will not communicate about the finances for the Tram Haus in writing, instead “insisting on private telephone conversations,” and refusing to produce documents “known to exist, which, we the investors, are unquestionably entitled to review.”

Stenger replied in an email that he would be “happy to connect” with Sutton and his “willingness to talk … on the phone is not a strategy or some sinister technique.”

The investment

Some of the investors question whether the new deal is better or worse than the original one.

Ariel Quiros stood briefly after the opening of Jay Peak Resort's Stateside Hotel to announce he had purchased the company bringing light plane manufacturing to the state-owned Newport State Airport. Photo by Hilary Niles/VTDigger.
Jay Peak principal owner Ariel Quiros. File photo by Hilary Niles/VTDigger

According to Ariel Quiros, Stenger’s partner and the owner of Jay Peak Resort, the investors went from an investment with no guaranteed payback to one that now is. Quiros said the promissory note the investors now hold is backed by the assets of the resort.

The notes, essentially a loan, however, are not secured by the Tram Haus or any other real estate or hard assets, according to Kelly. “It’s not a collateralized note,” Kelly said. “It’s not a secured note, but the note is guaranteed by the assets of Jay Peak, Inc.”

The investors maintain the IOUs are “worthless” because the documents refer to Jay Peak Resort, which is not a business entity tied to assets. Twenty have refused to sign the new deal Stenger offered. They say the original deal was better because they could have realized profits from any future sale of the hotel, while they say the promissory note is a fixed amount.

“Stenger and Quiros have taken the investors’ right to profits and have stuck those rights into their own pockets,” Sutton said. “However they dress this up … it is still dealing in self interest.”

Trust is paramount, according to another investor, Price, who said if Stenger and Quiros were willing to secure the loan against a tangible asset, “all this rubbish would go away” and they could “send that message around the world.”

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Anne Galloway

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  • Amanda Higgenbotham

    Guess the ‘investors’ didn’t do their homework: “Unfortunately, in order to qualify for an EB-5 visa, foreign investors are not allowed to accept any form of guarantee that an investment will be profitable. In other words, the investment must be “at risk”, or unguaranteed, for the time that it is invested into a qualifying U.S. based venture.

    • Julie Davis

      Great reporting! There is zero accountability without the press holding feet to the fire.

  • Bruce Post

    The Jay Peak EB-5 saga/soap opera/farce has more layers than an onion. It deserves at least a novella all its own.

    Yet, behind all the smoke, all the mirrors, all the claims of jobs, jobs, jobs, we have paid little attention to the continuing degradation of Jay Peak’s mountain ecology. I have read that one of the Vermont state employees who works for the EB-5 program loves selling Vermont and its environment to other people. I believe many of those folks are Chinese.

    Nothing against the Chinese, but I found this comment ironic. A Chinese author writing about China’s horrid environment in the New York Times wrote:

    “The entire country is sick, and cancer has spread to every organ of this nation. In our society, profit and G.D.P. count more than anything else. A glittering facade is the new face of China. Behind it, well-off people emigrate, people in power send their families to countries with clean water, while they themselves consume quality food and clean water through the networks that serve the privileged.”

    So: Sell Vermont’s clean environment to those who have ruined theirs. Then, they can come in and help Bill Stenger ruin ours.

    Pat Moulton is a quality person. I hope she does not end up tainted by association. As for Brent Raymond, whom I do not know, his “great man” utterance sounds, to me, like a classic case of regulatory capture. But, of course, this is Vermont. What else is new?

  • Paul Lorenzini

    Speculators failed, woe be they. HOORAY!!!!!!!!!!!!!!1

  • ray giroux

    So, these investors didn’t do their homework. A brief study of the daily operations of JP would have showed just how oppressive this company is. Typical corporate OPPRESSION by holding workers at low pay and not giving employees enough hours a week to offer any benefits. JP has sucked all the money out of the Mom and Pop business surrounding the mountain.

    And to think that James Douglas gave this man, Stenger, an appointment to study why young people are leaving Vermont to find gainful employment, really!

  • Howard Ires

    If this was just a case of a shady developer ripping off his investors it would be bad enough, but this was a government sanctioned international program! What a black eye for the State of Vermont.

    Good luck to anyone else trying to find EB-5 investors for a project after this debacle.

  • Lea Terhune

    Enough of photos of buildings lit up like Christmas trees. They advertise waste, excess, garish over consumption.

  • Howard Wooden

    Great piece of reporting!

  • There is no illegality, no smoking gun. VT has no obligation, legal or ethical, to help these people.

    These are simply some disgruntled entitled rich people who bought their citizenship — ahead of millions of poor people, political exiles, their children etc — & now think they are guaranteed a profit on top of it. (poor guy is leasing a car!!!) Capitalism is risky. If they’re unhappy, do what we do in the great US of A. Sue.

    What is the point of this endless “expose”? Don’t the US govt & the state of VT favor the rich enough??

    • Randy Koch

      Judith Levine: The point of the exposé is that the Shumlin Adm is complicit in fleecing these folks. That’s pretty interesting whether or not the fleecees are rich or reduced to enduring life in 1,700 sq ft houses. Having given the scheme rather conspicuous seals of approval, Shumlin and Co must be down on their knees giving thanks that the VT GOP came up with a comic opponent who isn’t even quite sure where he was born.

  • Thank you for this detailed explanation. As a Vermonter, I’m appalled that the state was party to this scam.

  • David Pardo

    Buyer beware. Good advice yesterday, today and tomorrow.

  • Don Peterson

    Im trying to think of a scenario where converting equity shares into unsecured debt proves anything other than a shortage of funds.

    And then the failure to notify the shareholders of the fact.

    • Karl Riemer

      It could demonstrate confidence in future return.
      Converting equity into debt, basically buying back shares, not only reserves future profit for future investment by the corporation, the confidence it bespeaks often inspires confidence in future investors. In this case, the debt being largely deferred, it does look like a cash-poor rather than cash-flush maneuver, but that may only be because they could legally get away with structuring the conversion that way, not because they had to.

  • Michael Colby

    Again, how can such a seemingly exhaustive account of the boondoggle at Jay Peak be written without including a mere mention of Alex MacLain? She was, after all, in charge of EB-5 “investor relations” for Stegner before high-tailing it out of there when things started to fall apart. As the former campaign director for — and political appointee of –Governor Shumlin, MacLain was the high-level bridge between the State and Jay Peak. Now, of course, she’s landed safely as a story-spinner at KSE, where, apparently, she’s doing a fine job keeping her name and role cleansed from this rather sordid tale.

    And so it goes.

    • Jason Farrell

      From a recent comments section in a recent article where you expressed the exact same baseless sentiment.

      “October 6, 2014 at 11:21 am
      Hi Michael,
      Anne is away but I wanted to address the fair point you raised. Alexandra MacLean, who was a consultant to Jay Peak at the time of these email exchanges, was copied on several of the emails between Mr. Raymond and Mr. Stenger. She was the subject of none of them. The dialogue was strictly between Stenger, Raymond and ACCD attorney John Kessler. However, her former association with Gov. Shumlin is relevant in the overall picture — we have reported that fact many times and we will add it to this story as well. The inference that MacLean was excluded from the story because she now works for one of VTDigger’s underwriters is off base. Jay Peak is an underwriter as well, as are many other institutions that we cover. The editorial staff works in complete isolation from the business staff at VTDigger and will continue to independently pursue stories about anyone, anywhere, anytime.
      Thanks for reading, Tom Brown, editor at VTD.”

  • My overall impression is that Stenger is a good guy who had a dream about doing a good thing. But he got in bed with the wrong partners. And now it’s all falling apart around him. His life must be miserable. I think most Vermonters had high hopes for this dream but politics, money and greed eventually ruin everything good in this world. Pity.

    • Jim Barrett

      Not sure there is any good people involved in what looks like a scam. We as nice citizens require a foreigner to pay us half a million bucks to come here????? WHY? We have millions of people from different countries who migrated here without paying ransom and are successful.

  • Annette Smith

    Anne, thank you for the kind of journalism that has few outlets these days.

    From a distance it is easy to see how investors knowingly took risks and perhaps did not do their due diligence, read the fine print, or understand what the deal was.

    But closer up, Bill Stenger himself pitched a deal involving ownership with profits based on investing in a bricks and mortar opportunity, not just paper. This investment was publicly promoted by not only Gov. Shumlin but also Senators Leahy and Sanders and I believe also Congressman Welch. Investors had good reason to trust that Bill Stenger’s promises of return on investment were backed by the highest offices of the state.

    Bait and switch is what the investors got instead. And Vermonters get to watch yet more hypocrisy on the part of our leaders, who support excessive energy wastefulness pouring heat into open air during winter, requiring many megaWatts more power, a lot more traffic and fossil fuel emissions, yet telling us that if we do not support building more wind turbines on mountains — and now Gov. Shumlin admits he wants to open up the Green Mountain National Forest for wind turbines — we are promoting fossil fuels and do not believe in climate change.

  • jackie Simons

    This could have been an excellent program had the management of Jay Peak Resort been so much better but they were only out for what they could get. It shows in their hiring practices and their cheapness in not paying liveable wages. They want to keep all business on the mountain and there is very little spillover so it is a sham when Mr. Stenger says “a rising tide raises all ships”. He forgets to mention, he owns all the ships.

  • Chet Greenwood

    I have done business off and on with Bill Stenger for more than 40 years. Bill has always been honest and always kept his word. He has done a fantastic job in building Jay Peak to what it is today.
    Most of you commenters are assuming the worst and that Bill and Jay Peak are the villains.
    The article states that there are 1089 EB-5 investors in the numerous Jay Peak/Burke/Anc-biotech projects. So 20 are disgruntled and my guess 1/2 of those 20 are on the list to go-along. So less than 2% of the investors are unhappy- VT Digger should try to interview just a few of the remaining.
    Now for the investment of $500,000. Who would in there right mind take their last $500,000 and invest it in a single project yet to be built, in another country without a due diligence AND a blessing from an accountant AND attorney.
    Is it Bill Stenger’s responsibility to tell the investor that he should keep his money? NO- it should have been the investor’s attorney and/or accountant. These people had businesses and I can’t believe they made their money without following common business practices.
    Bill is a promoter and a great optimist and that vision has been successful for him and Jay Peak His optimism is what sold the EB-5 program and that is NOT a crime.
    As for livable wages- Jay Peak has plenty of good paying jobs but like any hospitality business it has it’s share of lower end paying jobs. Many of the jobs created by Jay Peak in the last 4-5 years went to previously unemployed workers.

    • Karl Riemer

      The math is, shall we say, speculative, but I’d also be interested in hearing what some of the other investors think. What’s happened to the 1054 subsequent EB-5 shareholders? Were their limited partnership agreements similar? Were those also converted to unsecured loans? Anticipating and answering every question raised in a story would be above and beyond, dear Digger, but has anyone attempted to ascertain the situation and opinion of any but the 20 activists? Do they roughly represent 35, or 1089, or are they in fact alone in their indignation?

  • sue chant

    Great reporting. I thought the idea of developing Jay Peak so quickly was absurd from the start. It should have been slow and steady growth in that georgous region of VT

  • walter moses

    This is not going away. Great reporting!
    Now if I was an HONEST politician, and had gone to China with Stenger, Raymond and the like, posed for photo opps, etc., etc. and helped them ballyhoo their little project, I would be livid. I would have Stenger bend over and punt him into Montgomery Center, rather then hope the bad dream goes away. Cause it won’t.

    • Paul Lorenzini

      Way to go Moses!!!!!!!

  • walter moses

    Oh no digger, I never said that before!

  • Bill Olenick

    The saga continues in a story resulting from bad public policy, enacted by elected officials pushing centralized government policies, to the detriment of the citizens who elected them.
    Do not like the policies???
    Simple…
    Turn the supporters of these policies out of office this coming election.

  • Dave Raviso

    This story has the potential to win a Pulitzer Prize if any wrong-doing can be proved. Jay Peak have received $500,000,000 dollars, and none of it is publicly accounted for.

    • Amanda Higgenbotham

      Shouldn’t be difficult – the Director of International Trade & Vermont EB5 Regional Center has a phone number and state email address. His predecessor is on record as stating:
      “he inspects Jay Peak’s financial records at least four times per year and that he has not seen any financial irregularities or problems.”

      • Paul Lorenzini

        I will call him soon.

  • Judy Levine wrote:

    “What is the point of this endless exposé?”

    It’s fairly obvious that Bill Stenger has done something to tee off the Shumlin administration. We may never find out what that was. It wouldn’t take much. Bill is personable and a very wealthy man. A few years ago, people were calling him “King of the Kingdom,” and suggesting he run for governor. It may be a matter of simply attempting to knock out a potential opponent, in terms of public trust.

    Predictably, and to that end, a political pigpile has been organized by Shumlin administration mouthpiece Vermont Digger. Telltale in terms of bias is the headline: “A sense of betrayal….” The RE market or stock market or any other investment venue is not your mommy.

    If Vermont Digger was really an independent news site, they would dig and dig and find out the real reason for all the venom rather suddenly being directed at Bill Stenger.

    Just as an aside: I like going to Jay Peak; for one thing, it brings back childhood memories of Switzerland. That impression would instantly be broken if the staff were anything other than cheerful, polite, and super-efficient: in other words, well trained and well paid. On one of my first visits, Bible classes were being held very publicly at the hotel. It made a good first impression that won’t go away.

    Envy is a sin.

  • Karl Riemer

    As with everyone else commenting here, the motives, details and propriety of this partnership dissolution are unknown to me. Rather than blow a partisan bugle or assume anything, let me just mention a few names: Iron Mountain, Stagecoach, Elk Meadow, Sekia… there are many others. An unsecured IOU may seem not-much right now, compared to equity in a glittering resort, but if the investors actually get back their $0.5M each, they may live to thank their lucky stars. Absurdly elaborated ill-conceived resort schemes built of boundless optimism and tides of starry-eyed cash have drained more fortunes than anything except maybe mining.

  • Ron Pulcer

    Wow, the Vermont EB-5 saga continues … Lots of VT-digging on this story!

    Meanwhile out in South Dakota, there is another EB-5 related story, and it could impact the results of the Senate race.

    http://www.washingtonpost.com/blogs/post-politics/wp/2014/10/22/fbi-investigating-south-dakota-eb-5-program-a-potential-blow-to-senate-gop/

    The Centrist Project, founded by Charles Wheelan, a Dartmouth professor, is trying to get 5 centrist/moderate Senators elected, such that neither major party will have a majority in the Senate.

    http://www.centristproject.org/about_us
    http://www.centristproject.org/big_idea
    http://www.centristproject.org/breaking_news_centrist_project_voice_endorses_larry_pressler_of_south_dakota_for_senate

    A few months ago it seemed like a “long shot”, when Centrist Project endorsed Larry Pressler, a former GOP Congressman, now running as an Independent.

    But Pressler has been gaining momentum, and this EB-5 scandal has hurt Gov. Mike Rounds (R) chances of winning, as he was the expected front-runner.

    This EB-5 program is having problems elsewhere besides Vermont. Likely the situation in SD is different, but still revolves around EB-5.

    BTW, Centrist Project had also endorsed Greg Orman of Kansas, who is running against incumbent Pat Roberts.

    http://www.centristproject.org/featured_candidates

  • Henault Judith

    Thanks, again for the great reporting. I hope that exposing corporate financial misdeeds will not overwhelm the real problem for those of us in the Newport area: Our quality of life is being irrevocably changed. I, for one, have no interest in living in Switzerland. I also suspect that soon many of us will not be able to afford to live here as taxes skyrocket which will begin with the upcoming property assessments resulting from Mr. Stenger’s gross overpayment to Doug Spates for a piece of condemnable property.

    Who benefits from all this? Certainly NOT the current residents. But, then again, nobody expects us too. We just pay the bills. Adapt or go away is about all the response we get when we ask due diligence questions re: future infrastructure costs, etc.

    Not a place I would recommend as “home” to any thinking person. But if living in a playground suits you and you don’t mind having a Biolab complete with clean rooms in your community, have we got the place for you!

  • Where is the SEC? Where is the FBI? If any wrong had been done, that would surely be in the headline. Absent law enforcement and regulating authorities in this drama, this was an investment-related risk, nothing more.

    And where would the SEC, and the state of Vermont, have been if I had lost a large chunk of my life savings buying land in Albany near the KCW industrial dump? Quiet desperation there, for lots of folks.

  • David Matthews

    As this thing EB-5 thing continues to blow up in many faces, I figured it was not time to fly off the handle with one’s simplistic perceptions anymore, even though mine are similar to others since my initial awareness of the program about five year’s ago, centering around the four-letter-word, “scam.”
    Thus a quick trip to Google, where I learn that EB-5 has been around since formulated by Congress in 1990 and has been a web of confusion and controversy for over two decades with some success and some failure, both of which reflect upon our own Sen. Leahy.

    I found this link very helpful, after being stunned to learn there are 440 EB-5 approved regional centers throughout the nation.
    http://www.eb-5center.com/faq/14

    One takeaway is that “scam” certainly is a proper adjective in many occurrences in this program throughout the nation, much of it resulting from the unintended consequences of a government program entering uncharted waters.

    As for the crisis of confidence at Jay Peak as takeaway #2, I’m guessing that Mr. Stenger has been simply been taking advantage of a federal government program like many other business persons, has intentionally broken no laws, but now finds himself a victim of those dreaded unintended consequences.

    Takeaway #3. Only three state government agencies are among these 440 EB-5 regional centers. As everyone is aware, Vermont was first in the nation (1997) followed by South Dakota (2003) and Michigan this year. Today, Vermont state government is embroiled in this Jay Peak affair whether it wants to or not, and there are serious questions to be answered on its role, past, present and moving forward. Meanwhile South Dakota’s governmental role is in turmoil, with $120 million missing under their watch. Michigan, watch your wallet and your reputation.

    And now we’re supposed to have our state’s politicians again send us down the road on another first-in-the-nation venture into single payer?

  • Paul Lorenzini

    as much as I love the state of Maine, I would not invest there, I will stay here and fight.

  • Rebekah grace

    How is it state government officials are allowed to have a private corporation( Jay) pay for their trips to China, Uk, et al.

    does this mean other projects in the state would have to pay for their trips as well?

    In which case, Did the state make eb5 a ” pay to play” situation requiring projects seeking money have to pay for all of the state of vt. employees including the gov. to travel to promote their projects? So why isn’t this a conflict of interest? This seems to put people like Brent Raymond and the gov. in the pockets of the developer, and make it tough to be objective. Just don’t understand how its legal for govt employees to be bought Nd paid for by a private project.

    • Jamie Carter

      Slow down….

      EB-5 investors do not have to pay for government official trips. So not it isn’t a pay to play situation and no Brent Raymond is not in the pockets of developers.

      It’s like this, Stenger went to round up investors. As the EB-5 program is a GOVERNMENT program with GOVERNMENT oversight, it’s a good sales idea to bring along a few government officials that can voice their support for the program, etc. So Jay Peak asked and the Governor agreed to go. Now, people would be up in arms if taxpayer dollars were spent so JP paid for the trip. The Guv, gets to promote economic growth and job creation and JP gets to have the Guv tell investors that the state supports these programs and projects.

      It’s not some conspiracy.