EB-5 investor says Jay Peak developers double-sold Hotel Jay - VTDigger
 

EB-5 investor says Jay Peak developers double-sold Hotel Jay

Jay Peak, Hotel Jay

The Hotel Jay is the signature project of the Jay Peak Resort expansion. The developers used EB-5 immigrant investor money to build the five-story hotel. An investor alleges that the fifth floor was double-sold to two sets of investors. Photo by VTDigger

An investor alleges the developers at Jay Peak Resort double-sold the same fifth-floor units at the signature Hotel Jay to two separate groups of investors.

An investigation by VTDigger confirms discrepancies between what the developers promised investors and what they actually built.

According to the investor and the VTDigger review, the developers apparently used the money raised from the second group to pay for cost overruns in the project financed by the first group of investors — in particular, the signature water park that went way over budget.

Bill Stenger and Ariel Quiros, the developers of Jay Peak Resort, raised $75 million from immigrant investors to build the Hotel Jay project, which in addition to the hotel includes the water park, a golf course, ice rink and other amenities. While the $37 million hotel was under construction, the developers sought an additional $32.5 million from a separate group of investors for a project called Penthouse Suites.

Stenger and Quiros told Penthouse Suites investors in offering documents that $28.3 million of their investment would be spent on 55 “ultra luxury” suites that would be built on an expanded fifth floor at Hotel Jay.

Originally, the fifth floor was not designed to cover the entire fourth, and the developers said the Penthouse units would be built as part of the expansion where the fifth floor would be fully built out.

However, a state permit shows that the developers got permission to build 10 additional suites for the expansion on the fifth floor — not 55, as advertised to investors. Another public document shows the resort planned to spend $3.5 million on the 10 suites — nowhere near the $28.3 million the investors put up for the Penthouse Suites project.

Stenger and Quiros told investors they were building 46,000 square feet for the Penthouse Suites project and 250,000 square feet for Hotel Jay.

State permits, however, show the total square footage of the five-story Hotel Jay, including the fifth floor Penthouse Suites, is 258,300, according to Kirsten Sultan, the Act 250 district commissioner for the Northeast Kingdom.

No one has explained the missing 37,700 square feet.

Stenger denies any wrongdoing.

New allegation

Tony Sutton, an immigrant from England who invested in Tram Haus Lodge, the first EB-5 project at Jay Peak, raised concerns about alleged fraud in 2014 — two years before the Securities and Exchange Commission and the state brought charges against Quiros and Stenger.

Sutton, who is the spokesman for investors in Tram Haus, says investors also warned the state about double-counted rooms at Penthouse Suites, but the allegation was never investigated.

He believes investors in Penthouse were hoodwinked by the developers.

Tony Sutton

Tony Sutton, an investor in the Tram Haus Lodge at Jay Peak Resort. Courtesy photo

“There was a crossover between what they called a suite for the Penthouse and just the normal Hotel Jay hotel rooms,” Sutton said in an interview. “We have a crossover where, in effect, they’ve sold the same rooms or suites to both Phase 2 [Hotel Jay] investors and the Phase 3 [Penthouse Suites] investors.”

Stenger, the president and CEO of Jay Peak Resort, said the investors in Hotel Jay and Penthouse Suites got what they paid for.

“The Penthouse project is a separate project from the Hotel Jay,” Stenger said. “There are 65 investors in the Penthouse Suites project and 150 in the Hotel Jay project.”

Stenger adamantly denies allegations of selling the same units to different sets of investors.

“If you’re trying to get at the fact that we didn’t build what we were supposed to build, that’s crazy,” Stenger said. “If anything the story should be that we built more than we had to.”

The developers promised 175 units or 120 suites to Hotel Jay investors, and 55 units to the Penthouse Suites investors. Jay Peak Resort obtained permits for 10 units for the hotel addition. VTDigger could not independently verify how many rooms and suites were built at the hotel for the second and third floors.

Act 250 officials had plans available only for the fourth and fifth floors. The fifth floor shows 51 rooms and suites; the fourth floor has 52, four of which are part of the Penthouse project, according to Jay Peak. The architect and contractors did not offer plans for review. The state Division of Fire Safety said the drawings for the hotel were not on file, and the Jay Fire Department refused to provide plans to VTDigger, citing business privacy.

Sutton’s allegations are only now coming to light. Although complaints were filed with the Department of Financial Regulation in November 2015 about alleged discrepancies in the way the developers marketed Penthouse Suites to investors, the allegations do not appear to have been investigated by state or federal officials.

State and federal officials declined to comment on the investors’ allegations.

Both the SEC and the state of Vermont filed fraud charges in April against Stenger and Quiros, a Miami businessman and owner of Jay Peak Inc.

Bill Stenger

Bill Stenger. Screenshot from New York Times video

Regulators accuse Quiros and Stenger of buying the resort with investor funds and routinely backfilling previous projects with money from new investors in a “Ponzi-like” scheme. The SEC and state officials have said the resort ran deficits from the beginning as Quiros and Stenger built out the six-phase development, starting in 2008. The SEC maintains that the deficits were caused by misuse of $200 million of investor funds and “systematic looting” by Quiros.

The national EB-5 program allows immigrants to invest $500,000 in projects located in high-unemployment areas. If each investment creates 10 jobs, the investors are eligible for permanent U.S. residency.

Sutton says the Penthouse Suites project was a vehicle for getting more money out of investors without actually building an additional project.

“You have to try and get into the mind-set that they had at the time,” Sutton said. “If (the developers) already were starting to find the money that they were getting from investors wasn’t cutting all the money that they needed for the projects … it looks to us as though someone came up with this plan to build this additional floor, sell it to 65 investors, but only build 10 additional suites.”

Stenger rebuffed Sutton’s claim that the Penthouse Suites project was simply a way to raise money from investors by double selling the same real estate.

“What do you think? I mean, come on,” Stenger said. “It was an investment program where 65 people were welcomed. They invested in a highly successful hotel. They received their green cards.”

But construction of the Hotel Jay project, particularly the now-popular water park, had cost overruns, according to Jerry Davis, who was the project manager for DEW Construction at the time. Davis said he remembered there was a budget issue, “definitely over a few million dollars.”

Jerry Davis

Jerry Davis. Youtube video image

“We noticed there was going to be a budget issue with Phase 2 [Hotel Jay], particularly when it came to the hotel and the water park,” Davis said. “There was some agreement that the budget would be increased, and that’s when the construction and design estimate was changed. Again, I don’t know where the money comes from. I just know that when we bring an issue of budget increase, we look at it — we go back and forth.”

Davis said, “Stenger came up to me, actually I remember it to this day, it was a big deal. He came into my office and said, ‘I want to add additional floors to these zones.’ The bottom line was, the entire hotel would have five floors.”

Davis said the developers originally planned to build a fifth floor for two zones of Hotel Jay, and the Penthouse project was for three additional fifth-floor zones. But the before and after rendering the developers provided to Act 250 officials show the developers sought a much smaller increase in square footage for the fifth floor — from 33,313 to 41,575.

Davis recalls that Stenger asked him for the fifth floor changes very late in the process — late winter 2010 — and the hotel had already been designed and put out to bid. “But the way he said it is, ‘Look, we’re going to break off the entire fifth floor for all of the zones and make it a separate EB-5 offering.’”

After that, Davis said, he didn’t differentiate between Hotel Jay and Penthouse Suites. To him, it was all one project.

“When I was with DEW, we never broke out the value of Penthouse Suites,” Davis said. “I don’t know how the owners did that. They may have done that internally, but I never broke that out.

“It’s all as one to me. Hotel Jay, water park, to me it was one project and one contract that included the fifth floor,” Davis said. “How the owner broke that out, just like how they broke out the water park or arcade, I don’t want to say. I don’t care, but we’re building the project.”

Jay Peak, water park

The water park at Jay Peak had cost overruns. Photo by VTDigger

Luxury Penthouse Suites?

Penthouse Suites is the third phase of a six-phase development at Jay Peak Resort, a ski area on the Canadian border in the Northeast Kingdom. Stenger and Quiros planned to spend $282 million from immigrant investors under the federal EB-5 visa program to expand the resort, and five out of the six projects were constructed from 2008 to 2015. The sixth — Stateside — was only partly completed because the developers ran out of money, according to the SEC.

Jay Peak, Hotel Jay

Hotel Jay entrance to the water park. Photo by VTDigger

The $37.5 million Penthouse Suites project featured ancillary developments valued at $4.4 million including an 8,000-square-foot “Mountain Learning Center.” As part of the offer to investors, the Jay Peak developers said they would spend $5 million of their own money on “mountain bike and tour trails, infrastructure, common areas, and parking.” The SEC alleges the developers did not fulfill promises to contribute to the Jay Peak projects.

Unlike the other six phases in the EB-5 program at Jay Peak, the Penthouse Suites project is not a standalone development. It was designed to be part of Jay Peak’s signature project, the grand Hotel Jay.

In the offering memorandum to investors in 2008, two years before the Penthouse Suites project was offered, Hotel Jay was billed both as a 175-room hotel and as a 120-suite hotel, with “penthouse units,” conference rooms, spa and fitness center and restaurants.

The state permit describes Hotel Jay as a five-story building with 120 units. Levels three through five consist “of a mixture of studio, one, two, and three-bedroom hotel suites.” In addition, the project features a golf and cross-country ski center, bowling area, ice rink and the large indoor water park.

The expansive development was in the works for several years before the developers started construction in June 2010.

Penthouse Suites, on the other hand, was not part of the original design and appears to have been something of an afterthought. Quiros and Stenger registered the Jay Peak Penthouse Suites limited partnership with the Vermont secretary of state in May 2010, a month before DEW broke ground on Hotel Jay.

Jay Peak, Ice Haus

The Ice Haus is part of a $282 million expansion of Jay Peak Resort. Photo by VTDigger

The developers gave Black River Design Architects and DEW Construction six to eight weeks to redesign the fifth floor of Hotel Jay to accommodate Penthouse Suites, according to Davis, the project manager.

“We definitely had to fast track it,” Davis said.

At the same time they were building Hotel Jay and pulling Penthouse Suites together, Stenger and Quiros were soliciting investors overseas. The offering memorandum they gave to investors said there would be 55 suites in Penthouse, totaling 46,000 square feet. Later Stenger told investors there were 56 in all. Four of the suites are on the fourth floor, the rest on the fifth floor, according to a state permit.

The only way the developers appear to be able to claim they are selling 55 guest rooms is to count square footage they already counted as part of the Hotel Jay investment.

An amended state permit for Hotel Jay shows the original design included open terrace areas on the fifth floor totaling 8,300 square feet. The Penthouse Suites project filled in these areas with 10 additional units.

Sultan, the Act 250 commissioner, said the May 2010 application was for “an approval of a change to the design” for Hotel Jay. The construction of a sixth “additional” story, alluded to in an offering document given to investors, was not built, Sultan said. “It was more a matter of using the space for the existing Hotel Jay,” she said.

About 8,300 square feet was added to the existing plan for the 250,000-square-foot hotel, according to Sultan.

Jake Webster, the vice president of real estate development at Jay Peak, told the Jay Zoning Board, according to minutes from an August 2010 meeting, that he was seeking “the addition of 10 suites and one additional conference room on the top floor of the building valued at $3.5 million. This will maximize the use of space within the structure.”

The DEW Construction Corp. website describes Hotel Jay as a 230,000-square-foot, five-story hotel with “176 units [130 suites].”

Sutton says it appears the Penthouse Suites investors put up $28.3 million for what may have been as few as 10 units in the 8,300-square-foot expansion.

Stenger described Hotel Jay as “an expensive building” and said the developers charged investors the appropriate amount for Penthouse Suites.

“That’s what, you know, it’s also the top floor, and it’s more expensive at that level, but you know, that’s, the cost, a building of that magnitude, a four or five-star hotel with a penthouse location like that. It’s expensive,” Stenger said.

The offering memorandum is short on details about what Penthouse Suites was supposed to look like. It is simply described as “one floor of upscale accommodation within the Jay Peak Phase II Hotel units building.” A photo of the proposed suite given to investors showed an expansive living area, full kitchen, large bedroom and bathroom.

Jay Peak, Penthouse suites bathtub

Jay Peak, Penthouse Suites bathtub. VTDigger photo

In a recent visit, VTDigger found that the Penthouse Suites had black granite countertops in the kitchen and bathroom. But inexpensive finishes were used elsewhere. The suites feature basic carpeting, tile floors, basic toilet fixtures, and fiberglass bath and shower units.

Jay Peak, Penthouse suites bathroom sink

Penthouse Suites bathroom sink. VTDigger photo

While there is a discrepancy in the square footage the developers represented to the two separate groups, whether Jay Peak accurately represented the number of hotel rooms that investors would be buying into depends on the definition of the word “suite” and how developers counted the different kinds of rooms.

Jay Peak, Penthouse Suites

Penthouse Suites living room. VTDigger photo

Stenger and Quiros used terms such as “suites,” “units” and “hotel rooms” interchangeably, and they told investors one thing and Act 250 officials another, making it very difficult to discern what they actually built.

Penthouse Suites, as described to the Penthouse investors, included living rooms, full kitchens, several bedrooms and bath. But plans show there are 51 rooms total on the fifth floor, including full suites and what Jay Peak calls “lock out suites.”

Lock out suites are single bedrooms with a bathroom — not full suites with a living room, kitchen and bedroom. They are sometimes connected to another bedroom or the full suites. In some cases, they are single rooms and are not interconnecting.

Most of the lock out suites have a separate door on the hallway with its own number.

About half of the 51 suites on the fifth floor are “lock out suites.”

VTDigger toured the facility and spoke with staff at Jay Peak who said each of the “lock out suites” can be rented separately as hotel rooms.

Investor blames the state

Sutton said several investors in Penthouse Suites believe that 45 of the suites they invested in are missing. It was difficult to know for sure, he said, because Stenger and Quiros deliberately kept investors in the dark and state and federal regulators haven’t investigated the matter.

“Nobody in Phase 2 [Hotel Jay] or Phase 3 [Penthouse] ever got any ownership documents, and again that was just to make sure that nobody smelled a rat at an early stage. I mean, it was, it was a very deliberate act,” Sutton said.

“When you look at a permit and you can see the permit only ever asks to build 10 additional suites on the top floor, you can be fairly sure that’s all they built,” Sutton said. “They didn’t ask for a permit for 10 and then build another 45 just on top of it.”

Brent Raymond

Brent Raymond, former director of Vermont’s EB-5 Regional Center. File photo by Hilary Niles/VTDigger

Sutton said investors contacted state officials with questions about Penthouse Suites in November 2015.

But the Vermont EB-5 Regional Center, which was responsible for overseeing the Jay Peak projects, did not investigate, Sutton said. Nor did the Vermont Department of Financial Regulation.

“We told them, ‘You need to go and see what’s happening with Hotel Jay and Penthouse because you will find there’s 45 suites missing,’” Sutton recalled.

But Brent Raymond, who was director of the EB-5 center at the time, and Patricia Moulton, the outgoing secretary of the Agency of Commerce and Community Development, which oversees the program in Vermont, did not respond to investor complaints about Penthouse, according to Sutton.

Sutton said state officials’ unwillingness to investigate was part of a pattern. Moulton and Raymond did not respond to earlier complaints by investors in the Tram Haus project at Jay Peak about the developers’ conversion of their ownership stakes into loans.

“The state had missed that 45 suites never got built?” Sutton said. “I can sort of understand why the state doesn’t want to look into it because it completely exposes them to being utterly negligent.”

State and federal regulators declined to comment for this story, including whether they were investigating Sutton’s allegations that the developers in essence sold some of the same units twice. The allegations were not part of the charges filed by the SEC.

Attorney General William Sorrell declined to comment on whether he was investigating the apparent discrepancies in the two projects.

Moulton said via email: “I am not in a position to discuss matters that are under litigation and related to investor complaints.”

Anne Galloway

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  • Bill Olenick

    A poorly though out program, pushed through by desperate politicians, seeking funds, after they regulated home grown investors right out of the game…

    I lay the blame firmly at their feet.

    If you do not like this program, and the crumbling results, I’d advise all to vote out any elected official, of this poorly planned,managed,morally corrupt program,who voted for, and publicly supported it.

    You can make a difference…had enough? VOTE!

    Time to clean house…

    • If the EB-5 had any hope of succeeding, it had to have responsible, rigorous and regular oversight at the state level. The state failed miserably in this regard under Gov. Shumlin’s leadership.

      What makes this failure even more odious is the fact that Gov. Shumlin fully recognized the need for comprehensive oversight of EB-5 and even used this fact as a selling point to induce potential investors. He starred in a video directed at investors touting the state’s robust oversight program.

      Gov. Shumlin knew state oversight was required. He told investors that oversight was in place. He failed to provide the promised oversight. He thus failed the investors……he failed Vermont.

      Regardless of any inherent flaws in the EB-5 program originating at the federal level, it is the failure of the Shumlin administration that has to bear burden of Jay-Peak and the related activities of Quiros and Stenger.

      • Willem Post

        Peter,

        You are saying Shumlin aided and abetted a fraud?

        Is that not a state and a federal felony?

        Why is no one being indicted?

    • Linda Quackenbush

      EB-5 needs to be abolished asap! Senator Leahy needs to apologise to Vermonters for subjecting US to failed federal policies that puts us in further debt to foreign nationals~

    • William Hays

      Including the Vermont Senator who is up for the umpteenth re-election.

  • Are we saying that Stenger and “Q” lied? Is this a bait and switch or fraud?
    ” give us your money and will build 55 or three units” – 10 units were built. It’s more transparent than ever, this” wink and handshake” relationship between the State and Jay Peak owners.

    • Neil Johnson

      What about the attorneys involved with this deal?

      • Come on Neil,
        Politicians and Attorneys are S P E C I A L

      • Neil,
        There time will come! It’s how billy made his money after rapid visas walked out. Brought in Charles Leamy who would share the finders fees with him….. Another guy billy most likely rolled on to sweeten his plea deal. Billy is putting that puzzle together for the SEC focusing on preserving his ego! Typical stenger, must have mentored that marketing guy on that cause the apple did not fall far from the tree.
        Goldberg and his partners plus quiros attorney’s will be making a lot of coin off this.
        Sad and yet who is going to hold the state/billy/Leahy accountable?? Who on the state level will speak up for the residents that see the obivious truth? Phil Scott needs to go after Shumlin and his cronies in this disaster!
        With all this bs it’s going to take a long time to expose the truth. Setting up like the investors won’t get a penny back because it’s all going to be used up.

  • What’s most surprising to me is the seeming lack of project oversight up and down the state and federal ladder. My wife is Dir. of Finance/Admin. for a Community Development Corp. that has the contract assurance contract for a wide 2 county/multi. town swath. They’ve been doing site and financial record checks on local housing agencies reporting to H.U.D. and state alike.

    I surely am not the first to marvel on the big question of, how then, is ONE single multi-million dollar project run so loosely with SO little direct accounting when it’s a model project that stands out, well….like a mountain!!?? Then there’s the fact that Burke was hung off the side of Jay which surely grabbed my meager attention over the sheer simultaneous capital outlay.

    I’m still more surprised that at least one set of formal charges haven’t been filed along with a couple passport surrenders by this point. I hope VT Digger isn’t the only hand on a shovel…

  • Interesting to me that Stenger keeps using the phrase “you know” in his responses. Of course the fact is that we don’t know. Stenger and Quiros went above and beyond to make this whole opperation as obtuse as possible. So no Bill, we don’t know. I find that people I work with use that phrase when they don’t have an answer and are simply hoping that the listener will fill in the blanks on their own. At no point in his response does Stenger ever actually give a response to refute the claims of the investor. “We built more than we had to.” Really? How so? Just saying it doesn’t make it true.

  • Anne THANK YOU for all your great investigate reporting on this mess! The onion is peeling apart and you are exposing them for who they really are! Billy is showing us how he is not and was not qualified to be part of a project of this scale!! All these state officials and billy were hiding the truth! The truth always finds a way out even if it takes time to be exposed.
    It is disgusting that billy is still denying the facts. I am sure there are more facts to come out as this onion is peeled apart.

    “If you’re trying to get at the fact that we didn’t build what we were supposed to build, that’s crazy,” Stenger said. “If anything the story should be that we built more than we had to.”
    Built more than you had too?? Billy please explain….. I don’t know where the bowling ally is???? You keep building because you were in a hole and it was getting deeper! You had no qualifications to be running a business like this and it is now showing. Please retire and get off the mountain, take your cronies with you too.
    One way or another you will be held accountable. Keeping telling yourself you did no wrongdoing if that let’s you sleep at night.
    If billy and the state are not held accountable then we know the fix was in from the beginning!

  • Gary Murdock

    “I can sort of understand why the state doesn’t want to look into it because it completely exposes them to being utterly negligent.”

    Meanwhile, the Enabler In Chief Shumlin is focusing on Scott and climate change. “Utterly Negligent” is the ultimate understatement, and defines his entire administration.

    • Shumlin announced his decision not to run for re-election on Dec 8, 2015 – knowing full well he would lose his re-election battle even if the Republicans decided to nominate Norm McCallister after the lid blew on the Stenger/Quiros debacle. The feds filed their charges on April 12, 2016. By my calculations, we have paid Shumlin $55,424.06 since the day the charges were filed and today. We will pay him $53,430.39 more between now and January when he turns over the reigns to the next governor. (Not Norm, thankfully.) Has he taken any steps to mitigate the damage done by Stenger and Quiros to our state? No. Stenger continues to drive the company car, live in the company condo and draw a nice fat paycheck – while he responds to questions from the press with obfuscation and deflection. So sad. Read the Vermont Constitution lately? “The Governor shall have power to grant pardons and remit fines in all cases whatsoever.” Uh oh…

  • David R. Black

    I am looking at the States involvement (you all know what I mean) in this scam. If it was a private endeavor, all involved would be terminated. I am always reminded of that Magnificent Seven Picture, posted earlier in this series. Remember in November and thanks again Ann Galloway and staff.

  • Steve Beck

    Oh my! I have not read all of these stories from start-to-finish, but two quotes that I read somewhere over the years that I have saved in a file come to mind. This one makes me laugh: “Men are liars. We’ll lie about lying if we have to. I’m an algebra liar. I figure two good lies make a positive.” ~ Tim Allen. And then this one which gives me pause: “No doubt, corporate CEOs who lie to their shareholders and politicians who lie to their public know and believe intellectually that lying is immoral. Why then do they lie? They lie to others because they first lie to themselves” ~ Lewis B. Smedes You all know who Tim Allen is. Smedes is a Christian author, ethicist, and theologian. I am not at all religious, but I do try to be ethical in my dealings with the people and the world. A trait that seems to be missing in a lot of this and has contributed to my cynical view of the world and my ever-increasing sarcasm. I am not amazed that this happened, but that those involved thought it was appropriate.

  • Lee Madden

    How many of the people wanting to blame the lack of government oversight would have agreed to hiring more regulatory staff before there was an obvious con going on?

    • Lee you are assuming they need more staff to Open their Eye?

    • Benedict Gomez

      The “regulatory staff” they did have literally, not figuratively, didn’t even bother with the most basic of fiduciary checks. They did NOTHING. This is the clearest example of complete government incompetence one could ever put forth.

      • Willem Post

        Benedict,

        That is the same incompetence regarding dysfunctional renewable energy, i.e., insisting on destroying pristine mountain ridges, and fertile meadows, and regarding the holy grail of single payer and a $200 million website that is still not working, and regarding the wood chip fired District Heating Plant that emits more CO2 than before, and is losing about $250,000 per year; if the $20 million had been provided by private investors that plant would lose over $1.5 million per year.

    • William Hays

      Hiring more regulators would have been unnecessary, if those in place were competent and did their jobs properly.

  • Mark Trigo

    I find it interesting that Stenger is still employed at the mountain with a big fat paycheck. Either Stenger knew what was going on (extremely likely) and was part of the alleged fraud, or he is the most clueless general manager the earth has ever known. Either way he should be long gone.

    • Willem Post

      Mark,

      He had to be given a job, because he knows where all the skeletons are buried, and he could talk about dirty linen.

      • Donna Boutin

        lol good one Willem..Bet he has a lot buried all over along with Mr Q’s bodies..

  • “Act 250 officials had plans available only for the fourth and fifth floors. The fifth floor shows 51 rooms and suites; the fourth floor has 52, four of which are part of the Penthouse project, according to Jay Peak. The architect and contractors did not offer plans for review. The state Division of Fire Safety said the drawings for the hotel were not on file, and the Jay Fire Department refused to provide plans to VTDigger, citing business privacy.” Really!

    There should be an independent investigation as to why there was an apparent complete lack of oversight starting in 2008. The officials of the EB-5 and state regulators, etc. appear to completely incompetent, indifferent or worse. This is not just about Stenger and Quiros.
    The above paragraph is just the latest example.

    • You would think these Plans and Permits would be Public Record?

      • Yeah you would think, Steve.
        “The state had missed that 45 suites never got built?” Sutton said. “I can sort of understand why the state doesn’t want to look into it because it completely exposes them to being utterly negligent.”
        This quote really says it all, and Moulton and Raymond should be made to testify to why they obviously turned a blind eye to previous complaints.

  • Josh Fitzhugh

    Great reporting Anne. What struck me was Stenger’s quote, “After all they got their green card!” The commingling of an investment with the green card benefit changed the dynamics of a real estate investment. It seems like the developers felt the investors didn’t really care about details as long as they got the card.

    • With most crooked people, The Ends justify the Means….Isn’t that what Bill is saying? We lied, cheated, and ruined many contractors but ““After all they got their green card!”

      • William Hays

        I still feel sorry for those investors that didn’t get their ‘green card’, or will have it revoked. As far as I can see, they took the EB-5 Program on good faith. Shame on the US Government and the State of Vermont.

  • Perry Merrill

    How many lies does Stenger need to tell in order for him to be held accountable? It’s time to de-Stenger the mountain, just as Burke did with the ‘Q’.

    • Donna Boutin

      How many lies does Shumlin and the rest have to tell to cover their butts before being held accountable?? From Leahy on down they all should be held accountable, From the EPA, the Agency of Commerce and Community Development, he Act 250 commissioner, the Vermont EB-5 Regional Center, etc..every single last one of them..especially the ones who are getting out of the job they were holding..Because if everyone open their eyes, sounds like people were and still getting their pockets lined.. for the state officials’ unwillingness to investigate..No one wants to show files or anything..sounds/looks like things are being hidden..they don’t want their butts in the frying pan..things are getting hot and will be burning fast..

  • Tiki Archambeau

    Great article! Glad Mr. Sutton was so candid with his observations. It helps add teeth to the vagaries of “we’re investigating” from the state & SEC.

    It’s easy to shrug one’s shoulders and look the other way because it’s a complex story. But if an elderly woman had her purse snatched with millions of dollars in it, you can be sure that any and all suspects would be behind bars while awaiting their day in court. When the suspects have heavy political connections, it appears they are free to carry on with their lives.

    Welcome to America, EB-5’ers!

  • Benedict Gomez

    Is someone….anyone… ever going to investigate Brent Raymond’s potential role in this? At best it appears he’s completely financially incompetent………at…….best.

  • William Hays

    Something truly rotten here, Gov. Shumlin. Meanwhile, you, and your Federal buddies, put on a happy face and Stenger, and his progeny, are on the payroll at very nice salaries. Yeah. Wait out the clock and it will all go away, especially if Minter replaces you. Jay Peak does need a few dozen wind generators!

  • Steve Merrill

    OK Then! “Investors warned the state..” and “State and Federal Officials declined to comment..” Any outdoors person knows that removing a tick by pulling still leaves the head intact, that you need to apply heat or deny oxygen to make it “leave” voluntarily. And yet Stenger still remains firmly attached to the mountain, making his $2,000 a WEEK and “state officials” request “more time” to comply with Federal requests for info? “Jobs” are on the way! It’ll take an ARMY of lawyers to untangle this mess..SM, N.Troy.

  • What is it going to take to get criminal charges filed! This should have been done months ago. Be sure to find out what your gubernatorial candidate of choice plans to do about this situation .Enough is enough.

  • William Geller

    For sure great article about the huge amount of abuse and fraud in projects ,which almost always involve project with OPM.

    Not only has thre been no oversight by the state with EB 5 projects . But it also seems there is no oversight by the state of the projects that are awarded grants. Huge gramts seem to be awarded to projects that could be built and rebuilt with much less size & glitter,

    • Great point, the State doesn’t oversee the bidding process either. How are we assured these project comply with ethical bidding and payment protocol? Anyone can start a company and the Developer/GC can pay them, whether they did work are not.

  • Dave Bellini

    Vermonters might have been better served if Digger staff were appointed to oversee the EB-5 program. I’m sure state officials were fooled by parties in question but I don’t see anyone from the state taking responsibility for oversight miscues. I hope the next Governor will place more emphasis on ethical behavior, not merely staying within the boundaries of law.

  • Bruce Wilkie

    Peter Shumlin has been complicit in this fraud from day1. He must resign now.

    • Patrick Leahy has been complicit in this fraud from day 1 too. He helped build this scam by writing letters and making apprences on behalf of jay peak! Show us those e-mails Leahy…

  • Dan Allard

    This sounds a lot like the movie The Producers starring Zero Mostel and Gene Wilder.

  • John,
    You are right on about how can Goldberg not see the FACTS of what billy has done. Goldberg you are telling us there is no one else who you can get your invaluable information from up there at Jay. Billy is guilty just like Quiros, just in a different manner. He facilitated this whole mess and needs to be held accountable!!
    Goldberg remove billy so he can face the piper.
    Billy must be protected by the SEC/Leahy for this all to be going down the way it is.

  • Joe Torter

    Why should we summarily allow the deceptive actions of a few crooks disrupt a program that is beneficial to our area ? Instead of dismissing EB5, we should severely punish those who have abused this program. Extensive prison terms may discourage future abuse. Let’s not throw the baby out with the bath water.

    • I agree Joe, Developers, State & Local officials, General Contractors, Sub-Contractors, should all be strongly discouraged if they played any role in this.

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