More than 120 people who invested in the redevelopment of Burke Mountain, then were defrauded in a high-profile scandal that rocked Vermont, are set to receive some of their money back.
The foreign investors will get about one-third of their investment from the recent sale of the resort and a previous settlement with a financial institution.
Michael Goldberg, the lawyer overseeing the Northeast Kingdom’s resort receivership for more than 10 years, gained approval last week from a federal judge to distribute $183,322 to each of the 121 EB-5 investors in the Burke Mountain ski area.
Each of those investors put up at least $500,000 through the federal visa program in hopes of obtaining permanent U.S. residency, or green cards. To receive that, their investment in the resort would have had to meet certain job creation requirements.
The resort eventually fell into receivership when the developers were accused by regulators of misusing funds they obtained from EB-5 investors for not only the Burke Mountain development, but upgrades and expansion at nearby Jay Peak ski resort and projects in Newport.
Jay Peak resort had previously sold for $76 million with EB-5 investors who put money into projects at that ski area also receiving pay outs from proceeds of that sale.
In April, Goldberg, a court-appointed receiver, reached a deal earlier this year to sell the Burke Mountain resort for $11.5 million to Bear Den Partners LLC, a group of entities with longstanding ties to the ski area.
Goldberg late last week received approval to distribute the proceeds from that sale to the foreign investors as well as another roughly $10 million from a larger settlement he had reached with the financial firm Raymond James. Raymond James had handled transactions for one of the resort’s developers: Ariel Quiros, who owned both Jay Peak and Burke Mountain ski areas at the time.
All totaled, the receiver wrote in his court filing last week, he had roughly $22 million to distribute equally to the 121 foreign investors in Burke Mountain, or $183,322 each, representing about 36% of the $500,000 they each contributed.
That resolution, Goldberg added, “treats all Burke investors equitably based on their original investments.”
The EB-5 development projects in northern Vermont were led by Quiros as well as former Jay Peak resort president and CEO Bill Stenger and attorney William Kelly, a close adviser to Quiros.
All three were indicted on federal criminal charges in 2019 and later sentenced to prison, specifically for their roles in one of the EB-5 financed projects in Newport that never came to fruition, the construction of a $110 million biomedical research facility.
Goldberg has served as the receiver overseeing the properties at the center of the financial scandal since 2016. That’s when the U.S. Securities and Exchange Commission first brought a civil enforcement action in connection with the developments and the misuse of the funds.
Regulators brought that action in federal court in Miami, which was where Quiros resided in 2016 and where many of his other business entities were located.
Judge Darrin P. Gayles, who presides in federal court in Miami and oversees Goldberg’s receivership, on Friday approved Goldberg’s fund distribution plan to the Burke Mountain EB-5 investors.
Goldberg could not be reached Monday for comment.
