The federally-appointed person charged with overseeing properties at the center of an investor fraud scandal that rocked Vermont appears to be winding down his work after nearly a decade on the job.
Michael Goldberg wrote in a recent court filing that he expected soon to sell off the last receivership property, a piece of land in the heart of downtown Newport known as “the pit” on Main Street.
Properties tied to the scandal were placed into receivership when federal and state regulators began enforcement actions against the developers of the project in 2016. VTDigger broke news and drove coverage of the scandal.
Goldberg, who has served as the court-appointed receiver since that time, has sold most of the properties off, including two ski resorts. Now, according to the update on his work last week, the receivership is nearing its end with the expected sale of the Newport property.
Goldberg wrote that he “has been in extended negotiations to sell this property and is hopeful a sale can be consummated within the next six months and the proceeds of the sale along with other funds the Receiver is holding can be distributed to investors as the Court directs.”
The sale of the site would be a major step forward in cleaning up a highly visible reminder of dashed hopes for a project that turned out to be riddled with problems.
No other details about the potential sale, including the identity of the buyer or price, were included in the filing, and Goldberg could not be reached for comment.
Newport Mayor Rick Ufford-Chase said this week there was nothing he could add to the statement included in the receiver’s court filing.
“All I’m at liberty to say is that it jives with my understanding of where he is in the process,” Ufford-Chase said.
Buildings that had been on the property had been razed more than 10 years ago amid plans to redevelop the site, which had been known as the Spates Block. Those plans were scuttled after the developers were brought up on civil enforcement actions in April 2016 and later criminal charges related to investor fraud allegations.
The developers had proposed turning the Main Street block into a four-story development to be known as the Renaissance Block. It was to feature retail and office space and a restaurant, as well as a hotel and longer-term suites.
The project was among the many initiatives headed by developers to boost the economy of Vermont’s Northeast Kingdom, which included massive upgrades to Jay Peak and Burke Mountain ski resorts.
The developers had raised hundreds of millions of dollars for their work through the federal EB-5 visa program, which allows foreign investors to obtain green cards or permanent U.S. residency, in exchange for putting money into rural development projects.
Some of the work headed by the developers did take place, including improvements to the ski resorts. However, their proposed $110 million biomedical research facility planned on the outskirts of Newport, as well as the Renaissance Block initiative in the heart of the city, never materialized when the scheme–called “Ponzi-like” by the regulator–fell apart.
The developers in Vermont – Ariel Quiroes, Jay Peak’s former owner; Bill Stenger, the resort’s past president; and William Kelly, a former advisor to Quiros – each later reached plea deals and were sentenced to prison for their roles in the scandal.
Over the course of the receivership, Goldberg and other financial and legal professionals working for him have been paid more than $13 million to cover their costs in cleaning up the financial mess.
Goldberg’s latest filing was made in federal court in Miami. The case was brought in federal court in Florida because that was where Quiros was living at the time the civil enforcement actions were brought against him.
Quiros received five years behind bars, the longest sentence in the case, and was released from custody in October, according to the U.S. Bureau of Prison’s website.
