Courts & Corrections

Settlements in EB-5 case leave Quiros standing alone

Ariel Quiros
Ariel Quiros at a groundbreaking for AnC Bio Vermont in May 2015. File photo by Anne Galloway/VTDigger
Jay Peak owner Ariel Quiros is now the only defendant left in a case brought by federal regulators alleging the largest fraud in the history of the EB-5 immigrant investor program.

Federal Judge Darrin P. Gayles issued an order last week approving a filing by Michael Goldberg, the court-appointed receiver overseeing the properties and assets associated with the case, that settles lawsuits against a slew of corporate and relief defendants named in the action.

Those defendants were recipients of funds raised through the EB-5 program, which Quiros, a Miami businessman, and Bill Stenger, the former president and CEO of Jay Peak, used to pull in money for projects in the Northeast Kingdom.

The developers are accused of misusing $200 million raised through the program.

Most of the entities named in the case brought by the U.S. Securities and Exchange Commission in April were under the control of either Stenger or Quiros.

The entities include North East Contract Services Inc., which Goldberg now has authority over and which had been headed by William Kelly, a longtime business associate of Quiros.

As part of the order, Gayles wrote that “upon motion” by the SEC he would decide on possible civil penalties and whether it is “appropriate to order disgorgement of ill-gotten gains and prejudgment interest on disgorgement.”

As the receiver, Goldberg has oversight over all the relief and corporate defendants, and in that role consented to judgment against them in the SEC lawsuit.

The developers raised money from immigrant investors to pay for a series of projects at Jay Peak ski resort and a proposed $110 million biomedical research center in Newport, called AnC Bio Vermont, which never materialized. Kelly was paid $7.9 million for services he allegedly provided for that project.

Relief defendants are entities that have received “ill-gotten gains,” though they may not have necessarily taken actions that led to the fraud allegations.

The corporate defendants include six limited partnerships formed to raise money for the Jay Peak projects as well as for AnC Bio Vermont.

Quiros has denied wrongdoing in the case. Stenger settled with the SEC. He agreed to cooperate with investigators and faces a possible civil penalty. A state lawsuit alleging fraud remains pending against them.

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Alan J. Keays

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  • Seems very neat and cozy. People like William Kelly pocketed how many millions for doing what exactly?
    Relief defendants are entities that have received “ill-gotten gains,” So should most if not all the “ill-gotten gains” be clawed back to help relieve the Honest Contractors?

  • chris halpin

    Godspeed Receiver. Any pending action in Federal Court?

  • Kim Fried

    I still can’t understand how the past Vermont administration hasn’t been under the scope of this investigation. The Governor and his “over seers” were clearly involved and embarrassed Vermont and did great harm to Newport and many honest hard working Vermonters. Do you get a pass on illegal activities if you are part of Vermont’s government? Is this really Vermont?

  • Bill Rowe

    It would be interesting to know if any of the ‘relief defendants’ kicked back any of their ill gotten gains to Quieros or Stenger. Hope it’s being investigated.

    • That is exactly how the Game is usually played. A contract of $400,000 in value is written for $800,000. The additional $400,000 is the slush.
      As far as I know they was no state oversight of a honest ethical bidding process.
      No one from the state was paying attention to the schedule of values for each construction project .

  • Nothing against VTDigger; you’re the best. I mean it.
    But don’t we need an Annette Smith of EB-5 Affairs?
    So much about this is really rotten and only Quiros (the bad guy in the story, for sure) is going to catch hell for it.
    Lots of people sat back and let this happen.
    VTDigger is probably the ONLY entity that will chase it all down.
    No one in government has much incentive to so. Unless you think TJ Donovan wants to make his name of taking down names like Leahy, Sanders and Shumlin.

  • Ron Gunther

    Bernie Sanders and Patrick Leahey should still be standing beside Quiros like they were at the kick off for the state side hotel at Jay Peak. Without their endorsements in the beginning, this fraud would not have had a chance. Both of them should be recognized for their involvement in this fraud. It’s no wonder why Leahey is hammering Jeff Session so hard in his AG endorsement, he has a lot to hide.