William Kelly and Bill Stenger will stand trial at the same time before the same jury later this year on criminal fraud charges tied to the EB-5 scandal in the Northeast Kingdom.
A judge has rejected Kelly’s request to be tried separately over concerns that not only the prosecutor will accuse him of wrongdoing, but so will the attorneys for Stenger.
The case involves Stenger, Jay Peak’s former president; Ariel Quiros, the resort’s former president; and Kelly, who had been a key adviser to Quiros. All were indicted in May 2019 for an alleged scheme to defraud EB-5 investors.
More than 160 foreign investors seeking green cards in exchange for their investments each put at least $500,000 into a failed $110 million biological research facility in Newport, known as AnC Bio Vermont, that never got off the ground.
Quiros has already pleaded guilty to federal charges and is awaiting sentencing. Under a plea deal, he can’t get more than 97 months in prison.
Kelly and Stenger have maintained their innocence and are tentatively scheduled for trial in October. However, Kelly’s attorneys had moved for a separate trial, contending Stenger was going to blame Kelly for the criminal conduct.
In an order late last week, Judge Geoffrey Crawford denied Kelly’s request.
“Because the core of Mr. Stenger’s defense is that he was neither involved in nor aware of the alleged fraud,” Crawford wrote, “there is no fundamental antagonism between his position and whatever position Mr. Kelly takes at trial.”
In September 2020, according to the decision, Stenger’s attorney did email Kelly’s lawyer about their defense strategy.
“I want to communicate to you that central to Bill Stenger’s defense at trial will be that Ariel Quiros and Bill Kelly (as well as others) acted in concert to defraud investors in the Jay Peak and Anc Bio EB-5 projects and purposefully conspired to keep Bill Stenger in the dark about their fraudulent activity,” the email stated.
“Quiros and Kelly knew that if Bill Stenger found out what was going on, he would have put a stop to their criminal activities,” the email stated. “At trial, we plan on making every effort to demonstrate that Bill Kelly was aware of and involved about the criminal activity.”
That email, and the defense strategy laid out in it, should have been enough to warrant a separate trial, Kelly’s lawyer, Robert Goldstein, argued in an earlier filing.
“Mr. Kelly argues that Mr. Stenger’s defense — that the other defendants kept Mr. Stenger in the dark about the fraud and that he would have stopped it if he had known — is mutually antagonistic to his own defense,” Goldstein’s filing stated. “If Mr. Stenger’s account is believed, Mr. Kelly argues, then Mr. Kelly must be guilty.”
The U.S. Attorney’s Office in Vermont, which is prosecuting the case, did not support separate trials.
According to the federal prosecutor’s office, “In the government’s view, finger-pointing and blame among co-defendants are common features of conspiracy trials and do not require severance.”
Stenger’s lawyers did not support separate trials, either.
Brooks McArthur, Stenger’s attorney, called the ruling “thorough” and “thoughtful.” He said Tuesday he was not surprised by the decision, since such motions are rarely granted.
Goldstein, Kelly’s lawyer, declined comment Tuesday, as did the U.S. Attorney’s Office.
