[S]ome EB-5 immigrant investors in the Statewide condo village project at Jay Peak Resort, which is at the center of a massive fraud scandal, have had their applications seeking permanent green cards denied by a federal agency.
Michael Goldberg, a court-appointed receiver now overseeing the resort and other projects in the Northeast Kingdom caught up in the alleged fraud case, revealed news of the denials by the U.S Citizenship and Immigration Services in a court filing this week.
“Although the United States Citizenship and Immigration Services (“USCIS”) has started approving Phase VI investors’ I-829 petitions,” Goldberg wrote, “the USCIS has also issued some Phase VI investors ‘Notices of Intent to Deny’ (“NOIDS”) their I-829 petitions due to USCIS’s belief that the Stateside Project did not create enough jobs.”
Goldberg added that he and his immigration counsel believe that USCIS’s position was based on outdated information. The receiver has worked with accountants and economists “in formulating a template reply setting forth the most up to date information” for Stateside investors.
The receiver wrote that the “template” has been provided to all investors in the Stateside project who have received notices of denials of their “unconditional,” or permanent, green cards.
“This new information evidences that the Stateside Project has created enough jobs for all Phase VI investors and the Receiver is hopeful that USCIS will soon start once again approving Phase VI investors’ I-829s,” Goldberg wrote.
Goldberg said on Thursday morning that he was in court and couldn’t immediately respond to a message seeking comment.
He did reiterate in an email that he believed the denials were “based on outdated information. He added that he is “optimistic” that the petitions will be approved by USCIS once that agency reviews the additional information.
A USCIS spokesperson said the agency does not release information on EB-5 applications, investors, or related projects due to privacy act restrictions.
Goldberg’s filing does not state how many Stateside investors have received notices of denial of their I-829 petitions.
More than 800 foreign investors from 74 countries each put up at least $500,000 in series EB-5 projects proposed by the developers of Jay Peak and other initiatives in northern Vermont.
Each investor hoped to become eligible for permanent U.S. residency in exchange for the investments. If their $500,000 investment led to the creation of 10 jobs, an investor became eligible for permanent U.S. residency.
The alleged fraud at Jay Peak put the immigration status of roughly half of the investors in jeopardy.
That’s because several of the projects, including AnC Bio Vermont, a proposed biomedical research facility that never got off the ground, and the Stateside condos, which didn’t get finished, failed to meet promised job creation targets, required by the USCIS.
For more than a year and a half, Goldberg has made finishing the Stateside condos at Jay Peak a priority in an effort to meet the job targets and help dozens of investors in the project to obtain citizenship.
With funds from a settlement, work began to complete the Stateside condo village project at Jay Peak, known as Phase VI.
Goldberg reached an agreement with Raymond James & Associates Inc. last year to settle claims that the financial services assisted Quiros in diverting investor funds. Raymond James, which admitted no wrongdoing as part of the settlement, agreed in April 2017 to pay the receivership $150 million.
About $20 million of the Raymond James settlement went to finish the Stateside project.
Goldberg was appointed receiver in April 2016 by a federal judge after the U.S. Securities and Exchange Commission leveled an investor fraud lawsuit against Jay Peak’s owner Ariel Quiros and the resort’s former president, Bill Stenger.
The SEC and state regulators in a separate legal action accused Quiros and Stenger of misusing $200 million of the more than $400 million raised from investors through the federal EB-5 immigrant investor program meant to fund a series of projects, including massive upgrades at Jay Peak.
Goldberg has said that when the receivership began in April 2016 USCIS “completely” stopped administering investor petitions associated with the projects headed by Quiros and Stenger.
The developers started to run out of funding for the developments in 2014, and by the time the SEC filed its investor fraud lawsuit in April 2016 about 400 investors in three incomplete projects had not received “unconditioned” green cards.
Investors who have not received that status include about 120 who put money into the Burke Mountain Hotel & Conference Center project, which opened in September 2016, as well as another 75 investors in the Stateside project, Goldberg has said.
Also, most investors in a failed project headed by the two developers to build the proposed $110 million AnC Bio Vermont facility in Newport won’t be able to get their green cards for their investments in that project.
Many of investors in that AnC Bio Vermont project have been offered the option of a refund of their $500,000 investment, or to have that money “redeployed” into a different EB-5 project as a way to obtain their green cards.
According to the latest filing this week from Goldberg, Judge Darrin P. Gayles, presiding in the SEC case pending in Florida, approved a modified plan last year for completion of the construction at Stateside.
That plan reduced the number of cottages to be completed from 84 to 60 and eliminated the plans to build a medical center, the receiver wrote.
“Instead, the Receiver is using these savings to build a more comprehensive recreational center as well as soccer and lacrosse fields,” Goldberg wrote. “The Receiver and his hospitality experts believe that this will help improve occupancy in the slower summer months and in turn increase revenue and profitability.”
By December 2017, he added, the 60 cottages and the recreational center were completed, with construction of the soccer and lacrosse fields expected to begin in April 2018 and be completed by mid-September 2018.
