[T]he state of Vermont released Thursday 443,000 documents in the Jay Peak Resort fraud case.
The documents were made available on the Department of Financial Regulation’s website. It is unknown at this juncture just what has been released as each of the 21 batches of zip folders on the website is so large that downloads take an hour or more. None of the folders are labeled and no index is provided. The records in batch 1D3, for example, consist of bills and reports from DEW Construction for the Stateside Hotel and other projects, images of plumbing fixtures and architectural specifications.
The Department of Financial Regulation, which regulates securities, took over the oversight of Jay Peak and other EB-5 projects in January 2015.
The Vermont EB-5 Regional Center, part of the state commerce agency, was originally responsible for administering, managing and overseeing the Jay Peak projects from 2006 to 2014. The former director of the Vermont EB-5 Regional Center, Brent Raymond, has said in a deposition he raised questions about possible financial improprieties with Lawrence Miller, the secretary of the commerce agency. No action, however, was taken to stop the fraud.
Since 2016, VTDigger has sought all of the records between state officials, the Jay Peak developers and the federal government. The state has blocked the release of the records, citing a relevant litigation provision in the Vermont Public Records Act. Specific records requests filed by the media nonprofit in 2015 were also blocked.
In previous statements, Michael Pieciak has said the release would be largely comprised of financial documents related to the state’s investigation, with the Securities and Exchange Commission, of the $200 million fraud at Jay Peak.
The state probe was launched in the spring of 2015, seven years after the Ponzi-like scheme began. On April 14, 2016, SEC brought 52 counts of securities fraud against Ariel Quiros, the former owner of Jay Peak, and Bill Stenger, the former CEO and president of the ski area.
Gov. Phil Scott announced the release in a prepared statement Thursday morning. The governor said he has pushed for public disclosure of the Jay Peak documents “given the significant public interest in the largest fraud cases in Vermont’s history.”
Scott promised to release the records in 2017, shortly after he was first elected. Over the course of the past two years, however, he has deferred to the Vermont Attorney General’s office and the Vermont Department of Financial Regulation, which have blocked release of the records, citing a relevant litigation provision in the Vermont Public Records Act, despite the high level of public interest in understanding how the state could allow the fraud to continue for an eight-year period.
“I share the frustration of Vermonters who have been waiting for the release of documents related to this matter,” Scott said. “This is an important step forward in our efforts to provide transparency and I will continue to advocate for the release of documents previously exempted from disclosure. I appreciate the work the Department of Financial Regulation has done to investigate and facilitate the prosecution of the fraud and to carry out this disclosure effort.”
Foreign investors, each of whom put up $550,000 to invest in the Jay Peak projects, sued the state for not properly overseeing the program. The case was dismissed out of hand before any discovery took place and has been appealed to the Vermont Supreme Court. Arguments in the case will be heard next month. The state has cited the government’s absolute immunity.
Earlier this month, VTDigger successfully sued for forms the Vermont EB-5 Regional Center was required to submit to the U.S. Citizenship and Immigration Service. These records are part of the public release on the DFR website.
VTDigger has argued that the records should be released because there is no discovery in the investor lawsuit and therefore no need to cite the relevant litigation exemption, which is being used at the discretion of the Vermont Attorney General to withhold the documents.
The Vermont Attorney General’s office has said there are more than 1.5 million pages of EB-5 records.
