[B]ill Stenger, a businessman who was Vermont Chamber of Commerce’s “citizen of the year” less than a decade ago, walked into federal court in handcuffs Wednesday.
He is facing 10 charges including conspiracy to commit wire fraud, wire fraud and making false statements regarding ANC Bio, the company at the heart of the criminal case against he and fellow Jay Peak developer Ariel Quiros.
Bill Kelly, an adviser for Quiros, and Jong Weon (Alex) Choi, the operator of AnC Bio Korea, were also named in the indictment released Wednesday.
According to the indictment, the defendants met in Korea in November 2012 to finalize plans for the project and during that visit, Quiros and Choi “documented their plan to split $34 million.”
“They also documented that Kelly was to receive $4 million and Stenger was to receive $1 million in connection with the ‘management fee,’” prosecutors wrote.
Stenger, 70, appeared drawn as he pleaded not guilty and was freed on $100,000 bail. His voice trembled as he told the judge he was on blood pressure medication and seeing a cardiologist.
His defense attorney, Brooks McArthur, said the government has put forward “zero” evidence proving Stenger’s involvement in any criminal activity.
“This is a man who spent his life working for the Northeast Kingdom and the people of Vermont,” McArthur said after Stenger pleaded not guilty Wednesday morning. “What possible motive would he have?”
McArthur, later Wednesday, pointed the finger of blame on Quiros and the other defendants, saying that his client “trusted” the wrong people.
“Bill Stenger has admitted that he should have exercised greater oversight over Ariel Quiros, Bill Kelly and Alex Choi,” McArthur said. “But he trusted them. Why he trusted them is 20/20 hindsight beyond him, but he trusted them.”
McArthur said, as part of his client’s defense, he will not be “working with” the other defendants in the case. “From our perspective, Bill Kelly and Ariel Quiros and Alex Choi are the individuals who engaged in criminal activity here,” the defense attorney said.
McArthur added that there is no evidence that his client profited from the EB-5 financed projects at the center of the scandal.
“He hasn’t benefited one nickel,” the defense attorney said of Stenger and the EB-5 developments. McArthur did say later that Stenger’s annual salary at Jay Peak prior to the filing of civil lawsuits by regulators more three years ago topped out at about $175,000.
Stenger was key to getting support for the Jay Peak and ANC Bio projects from high-profile Vermont politicians like Sen. Patrick Leahy, D-Vt., and former Govs. Jim Douglas, a Republican, and Peter Shumlin, a Democrat. He is still a paid consultant to Jay Peak, which was at the center of the fraud allegedly carried out by him and Quiros.
It is fraud related to a separate biomedical research project, ANC Bio, which also received millions in EB-5 investor funds, that drew the criminal charges filed by the U.S. Attorney’s Office Wednesday.
Stenger handed in his passport Wednesday and is not allowed to travel outside the country. Other conditions of his release include avoiding all contact with witnesses, victims or co-defendants in the prosecution.
He is still allowed to contact Elizabeth Button, his longtime assistant at Jay Peak, and Michael Goldberg, an attorney appointed to run the company after the Securities and Exchange Commission filed charges against the developers.
Goldberg did not immediately respond to a call seeking comment Wednesday.
“I don’t believe that he has heard from Mr. Goldberg today,” McArthur said Wednesday of Stenger. “My understanding was that Mr. Goldberg was aware that these charges were forthcoming and imminent and he, at this point, has made the decision to keep Bill Stenger on.”
Stenger has previously reached settlements in civil lawsuits brought by state and federal regulators, and was required to pay $175,000 in fines. However, he did not admit any guilt as part of the settlement.
He has been making $50 an hour as a consultant to Goldberg regarding the resorts since the SEC lawsuit was filed more than three years ago.
Kelly and Quiros also pleaded not guilty Wednesday. Choi is at large, prosecutors said.
