Business & Economy

Breaking: Investigators on scene at Q Burke Resort

An unannounced raid by authorities occurred at the Q Burke resort on Wednesday, and the president of the company said the locks were changed and evidence collected.

Attorney General Bill Sorrell confirmed that state officials, including the governor, were aware that law enforcement officials were at the resort Wednesday.

Sorrell declined to comment on the investigation other than to say an announcement would be made Thursday. He would not answer questions about what law enforcement agencies might be involved.

“Tomorrow (Thursday) with at least an hour’s notice to press, there will be discussion of developments in the Northeast Kingdom,” Sorrell said early Wednesday evening.

WCAX-TV reported on Wednesday night that Q Burke President Ary Quiros said authorities had changed the locks and asked to see property. He declined to comment to WCAX, other than to say he was cooperating with authorities.

A statement from the governor’s office indicated the activity at Q Burke was a “coordinated effort” among several agencies, which were not defined. The statement also indicated that Department of Financial Regulation Commissioner Susan Donegan and Patricia Moulton, the head of the Agency of Commerce and Community Development, would also attend the press briefing.

“We’re aware of the situation in the Northeast Kingdom. This is a coordinated effort. We are unable to comment until relevant information is made public. We expect that to happen tomorrow,” the statement from the governor’s office said.

Gov. Peter Shumlin was not available for comment Wednesday night.

Q Burke is one of several projects that are part of a massive $500 million development in the Northeast Kingdom being undertaken by Bill Stenger and Ariel Quiros. They are raising the money from immigrant investors through the EB-5 investment program, which requires foreigners to put up $500,000 in return for permanent residency in the United States.

Stenger could not be reached Wednesday night.

The federal Securities and Exchange Commission has been investigating some of the projects by Stenger and Quiros. The developers have labeled the SEC action a “review.”

U.S. Attorney Eric Miller declined to comment Wednesday night.

State financial regulators have also raised serious financial questions about the projects, including Q Burke, where the general contractor says he is owed several million dollars.

Donegan could not be reached Wednesday.

A high-level source said no arrests would be made.

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Anne Galloway

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  • Joe Perry

    Ok Ari is in state, but Bill is in S. Africa, wonder if he’ll come back?

  • Michael Sher

    Read the history/follow story by joining > 3,100 members of Friends of Burke Mountain at https://www.facebook.com/groups/1519820171658214/

  • Don Peterson

    Anne Galloway is the only journalist in Vermont willing to go to the land of Oz and ask: “Who’s that man behind the curtain over there?”

    Whatever happens here, Thanks Anne.

    • Carl Werth

      If Anne is the only one – then why does the story above refer to a report aired by WCAX? It would seem that WCAX is also hot on the trail as well.

      • WCAX broke the story. We confirmed, but didn’t get there in time.

      • Bruce S. Post

        We will see what the investigation reveals. In the meantime, I think two media outlets deserve enormous credit and much appreciation for dogging the EB5 issue for the past few years:

        — VTDigger and Anne Galloway have been persistent in trying to sort out what has been going on with the Jay Peak/Q-Burke saga and with state administration of EB5 generally; and

        — WCAX-TV also has done excellent work. I particularly remember Gina Bullard’s comprehensive and probing four-part series “Building a New Kingdom” as an excellent example of television journalism. See: http://www.wcax.com/story/23885482/building-a-new-kingdom-part-1

        Thanks to both organizations.

        Remembering the early rush of political figures to embrace this program in Vermont, I keep hearing these words in my ears: “Victory has a thousand fathers, but defeat is an orphan.”

        • Willem Post

          Bruce,

          Here is some reporting by the Valley News:

          According to the Valley News article of April 19, 2016, it is likely someone tipped off the SEC regarding fishy doings and securities fraud at Jay Peak in the beginning of 2014.

          The SEC made an investigation for about 5 months, and then grilled Quiros for seven hours in the SEC Miami office on May 22, 2014. The SEC likely did not inform Vermont’s ACCD and DFR.

          In May 2014, the EB-5 investors first complained to ACCD, which promotes and oversees projects under EB-5 the program.

          After some preliminary investigating, Shumlin realized in late 2014 something fishy had been going on regarding Jay Peak and Newport projects, and that ACCD had not been doing its job.

          Shumlin transferred EB-5 oversight from ACCD to DFR in January 2015. It is likely Campbell, Smith, and others, had been aware of the ACCD lack of performance.

          The most incredible news is, ACCD had oversight of EB-5 at Jay Peak for about 6 years (about Jan 1999 – December 2014) and apparently found nothing wrong!! Will anybody be fired? Punished? Fined? Anybody jump ship since that time?

          About March 2015, i.e., after 3 months of investigations, DFR sensed a lot was fishy with the Jay Peak and Newport projects, and after 5 months of investigation, about May 2015, DFR imposed restrictions on Quiros to prevent further misappropriations of EB-5 funds.

          About $200 million had already been misappropriated PRIOR to December 2014, per SEC indictment. Basically, during these 5 months, DFR was learning about some of the information the SEC already knew.

      • Rita Pitkin

        VT Digger has been the only news media to consistently follow the story of the EB5 program in the NEK and ask questions. I am grateful for the persistence.

    • bruce wilkie

      WCAX has been really late to the table on this whole story. Now they have been dragged kicking and screaming into belated coverage.
      Probably has something to do with the volume of Jay Peak advertising that CAX runs.

      • Carl Werth

        That is inaccurate, Bruce Wilkie and Rita Pitkin. WCAX has been following this story from way back – as Bruce Post correctly points out above.

        Here is a link to a search page result on wcax.com that links the many stories WCAX has done on Q Burke and the other EB-5 projects in the NEK:

        http://www.wcax.com/search?vendor=ez&qu=Q+Burke

        Also, please note that Jay Peak buys advertising with all 4 stations in the market, not just WCAX.

      • Carl Werth

        ALSO. – That wcax search link is only to the first page of results. Go a page or two further and you can see for yourself how long ago WCAX started covering this story.

        • Carl Werth

          Not to take ANYTHING away from Anne’s fine reporting. That was never my point.

  • Kim Fried

    Really bothers me how this administration was so supportive of Bill Stenger and his business and suddenly they turn on him. Hope the investigating parties are independent and take a close look at this administrations involvement or negligence in over site. Some how this administration is immune to all accountability.

    • Michael Stahler

      Good point, Kim. Hope that if the Governor shows up and participates at this advertised press event that someone asks him about this issue.

    • Karl Riemer

      Nothing sudden about it. The escrow account, demands for financial records and increased scrutiny have been widely reported for months. Frustration and suspicion have been mounting all that time and have been publicly expressed. This is an inevitable culmination, not a turn. You may have missed it, but all this has been extensively discussed.

      • Kim Fried

        Come on Karl the EB5 program and Bill Stenger’s business has been around for years and years. Yes the problems have only been an issue for a couple of months, no I haven’t missed it. Years of ultra state support and a cold shoulder for the last couple of months tells me something is amiss with this administration.

  • Jamie Carter

    I find it a little disconcerting that the media presents this story and can’t give any more information on what agencies were there. They bring up the SEC investigation… so was there federal agencies there… the ones that have GSA license plates? Wear vests that say FBI on them? Or were the agents driving vehicles that had Vermont plates? Alas these days we have reporters, not investigative journalists…

    But, we have a press conference with Shumlin and his henchmen Sorrell, Donegran, and Moulton so it would seem this is a state issue. Isn’t it odd that these guys are all on their way out the door, Shumlin and Sorrell aren’t running for re-election and Donegran is resigning. Makes one wonder why after several years, hundreds of millions of dollars, and at the completion of the project we have a situation where state officials all of a sudden take an interest… as they are heading out the door.

  • Zoltan Sachs

    A scheme where money can “buy” U.S. residency is suspect from the outset. Citizenship should be earned, not bought. Well done Anne; someone had to have the fortitude to investigate. Stenger and the administration were way too chummy and it all seemed way too good to be true.

    • fred moss

      Democrats have essentially been buying citizenship and votes for the last 6 years or so by refusing to enforce immigration laws. This is just another tool in the tool box to destroy the country.

      • Yeah, our problems all stem from those %#[email protected]*^! immigrants. All would be fine if we just kept them out and supported all the so-called job creators who stash their money in Panama. Get some perspective here, Freddy.

  • bruce wilkie

    It’ll be real interesting to see what happens with the BIG HOLE in Newport.
    Maybe the state will build another office building there.
    Every ten years or so a “white knight ” rides into the NEK with pie in the sky promises which invariably turn out to be scams. No wonder there is no hope in Newport-and no hope translates into unemployment and used syringes in the gutter.
    What an excrement show!

  • Bill Peberdy

    All fall down?
    It is still early but it will be interesting to see how this spills over,if at all into the planned expansion at the NEK Newport Airport which Stenger’s Q-Resorts manages.
    Federal and other public funds are involved in the expansion but no EB-5 funds.

  • Walter Sobczak

    At Joe Perry.. Please get your facts straight as you are no better than the ‘media’ who seems hell bent on defaming anything that the EB-5 program touches. Fact is, Bill IS in Vermont, I saw him with my own eyes yesterday. Joe, you only serve to fan the flames. Fact is..NO ONE has taken step one to provide jobs to one of the most economically depressed areas of our country..NO ONE.Just remember that as you are vilifying Mr. Stenger. Maybe you all prefer to see the entire NEK on public assistance.

  • Lee Stirling

    Without much info to go on, speculation abounds. Are we talking about something akin to a John DeLorean-esque scheme to obtain the money necessary to save the company?

  • Mark Renkert

    Senior State Economic Officials Have Known For Years About Fuzzy Math of EB-5. And the must be held accountable. They have failed in their fiduciary responsibility to their constituents. Welch, Shumlin, Leahy, Sanders – once staunch advocates…. now are wildly finger pointing….. “Not Me.” State leaders have diminished the State’s brand with too-good-to-be-true Ponzi scheme. See Blame Game: http://bit.ly/1MvTBIG

  • VT Digger has been a good example of a free and vigorous press. In many countries much of what’s going on would either be suppressed, someone would be paid off, etc. etc. Since EB-5 is a government program the public has a right to a full and transparent accounting of events. This sets a good example of investigative reporting for the rest of the Vermont media. We need more!

    Congrats Anne!

  • Bob Zeliff

    The North East Kingdom badly needs jobs and investments in its future.

    It saddens me to see these investments in growth and jobs falling apart. People will lose their jobs.

    I don’t know if there is illegal activity going on….time will tell.

    It angers me to see people seemingly rejoicing in these disappointing turn of events.

    • Bob, I agree we shouldn’t be rejoicing because ultimately its the people there who are getting screwed. However, if the alleged fraud is found to be true, then its the owners who have let the N.E.Kingdom down and should get the blame and be held accountable. There will some satisfaction they haven’t gotten away with it, unlike the bankers and others in the sub-prime fraud.
      I have always felt the ethics or morality involving the EB-5 program was suspect. There are millions of refugees world wide, many because of our own governments past actions, who are in dire straits and more deserving of a “green card” but don’t have the $500,000!

      • John E Pierce

        I too thought that nothing good can come of a funding scheme based on a bribe from rich people to get a Green Card. Bad Karma.

  • Ed Fisher

    Vermont Digger , should begin an investigation into donations to Vermont political leaders , Shumlin , L:eahy , Sanders , Welch , Dean , Douglass ? Where this might end either in outright graft and corruption , or at least massive mismanagement by state officials. While most media source’s have done nothing but play the glory game , Vermont Digger has broken this ?

    Perhaps now the State of Vermont can begin to treat the Northeast Kingdom like something besides a red headed step -child , No offense to red heads ! It is also so obvious that the tax revenues in Vermont go to Chittenden Co.. Montpelier , Barre , !

  • Lea Terhune

    Re: Bill Stenger and Ariel Quiros “are raising the money from immigrant investors through the EB-5 investment program, which requires foreigners to put up $500,000 in return for permanent residency in the United States.”

    Are the EB-5 investments backed by the state? Same sloppiness and lack of oversite with the TIF program. TIF loans are backed by the taxpayers, and if for example the mall redevelopment in Burlington flops, taxpayers get the bill.