Crime and Justice

Jay Peak receiver’s bill for cleaning up EB-5 scandal now tops $9 million

Jay Peak Conference Center
The Hotel Jay and Conference Center at Jay Peak Resort. Photo by Anne Wallace Allen/VTDigger

The person overseeing Jay Peak and Burke Mountain ski resorts as they continue to emerge from an investor fraud scandal has been approved for more than $700,000 to cover his most recent work and that of people helping him.

With the latest payment, the court-appointed receivership of the two Northeast Kingdom ski areas has been paid over $9 million since taking over the management of the resorts more than four years ago.

The receiver, Michael Goldberg, has filed fee requests about every six months in federal court in Miami related to his management of the properties, which are at the center of the civil lawsuit brought against Ariel Quiros and Bill Stenger by the U.S. Securities and Exchange Commission. Quiros lives in Miami, and his businesses are located in Florida. 

Quiros, former owner of Jay Peak and Burke Mountain, and Stenger, Jay Peak’s former president, and two of their associates were indicted on federal fraud charges in May 2019.

Judge Darrin P. Gayles’ recent approval of $728,798 brings Goldberg’s fees and expenses to $9,107,897 since April 2016.

In his latest fee request, Goldberg wrote, as he has in past filings, that along with his firm, Akerman LLP of Fort Lauderdale, Florida, as well as the other professionals working for the receivership, are charging reduced rates for their work. 

A breakdown of the most recent request, which covers March 1 through Aug. 31, shows: 

— Kapila Mukamal, an accounting firm based in Florida, charged $103,845.

— Klasko Immigration Law Partners LLP of Pennsylvania, which has assisted the receivership with EB-5 immigration matters, had fees and expenses of $111,528.

VTDigger is underwritten by:

— The law firm Levine Kellogg Lehman Schneider + Grossman LLP of Miami charged $278,696.

— The law firm of Downs Rachlin Martin PLLC in Vermont had fees and expenses of $44,078.

— Goldberg and his firm, Akerman, had $190,649 in fees and expenses.

During the filing period, Goldberg told the court, he worked with others on several legal and financial fronts, including challenging tax assessments for both resorts in Jay and Burke, and obtaining more than $3 million in federal Paycheck Protection Program funds to help keep the resorts afloat during the Covid-19 pandemic.

He added that more legal action may be coming. 

“The receiver continues to review potential causes of action against pre-receivership professionals and various third parties who may have wrongly profited from the receivership entities,” the filing stated.

“These claims,” Goldberg wrote, “may include common law claims and claims under fraudulent transfer statutes. While the receiver cannot yet predict the likelihood, amount or cost-effectiveness of particular claims or the claims as a whole, the receiver continues to diligently evaluate claims against third parties.”

The money to pay the fees and expenses comes from previous legal settlements and from earlier sales of Quiros’ assets, the filing explains.

Quiros and Stenger have reached financial settlements with both state and federal regulators to resolve the civil enforcement actions against them, with Quiros taking the largest hit. Quiros agreed to surrender assets to the government estimated at more than $80 million, including both Jay Peak and Burke Mountain ski areas.

Regulators had accused the developers of concocting in a “Ponzi-like” scheme to fund a series of upgrades at the resorts and other development projects, raising more than $400 million from more than 800 EB-5 investors.

The federal EB-5 visa program allows foreign investors to receive permanent U.S. residency in return for an investment of at least $500,000 in qualified projects, provided those investments meet job creation requirements. 

Because of the fraud, many investors in projects headed by Quiros and Stenger have been unable to obtain their status as permanent U.S. residents. That includes more than 160 EB-5 investors who poured over $80 million into a failed project to construct a biomedical research facility, known as AnC Bio Vermont, in Newport. That project never got off the ground and regulators have termed it “nearly a complete fraud.” 

It’s the AnC Bio project that led to the federal criminal indictment for those who headed it, including Stenger and Quiros. Quiros has since reached a plea deal with prosecutors, agreeing to cooperate and face a prison sentence of no more than eight years.

Stenger has pleaded not guilty to the charges and is currently awaiting trial, which isn’t expected to take place until the fall of 2021.

VTDigger is underwritten by:

Stay on top of all of Vermont's criminal justice news. Sign up here to get a weekly email with all of VTDigger's reporting on courts and crime.


Alan J. Keays

Send us your thoughts

VTDigger is now accepting letters to the editor. For information about our guidelines, and access to the letter form, please click here.


Recent Stories

Thanks for reporting an error with the story, "Jay Peak receiver’s bill for cleaning up EB-5 scandal now tops $9 m..."