State regulators and the Vermont Attorney General’s Office hid the fraud from investors and the public for 13 months before the SEC shut down the Jay Peak projects, according to a suit filed in federal court this week.
The Vermont Attorney General’s office has asked the court for permission to redact records and charge tens of thousands of dollars to produce them. The state also wants to stall depositions of state officials, including former Gov. Peter Shumlin.
Under the deal, the immigration attorney would have to sign a statement saying he relied on the state’s purported oversight of the scandal-plagued developments for ensuring no wrongdoing.
The 32-page document released Tuesday reveals little new, providing mostly background on the state’s EB-5 program as larger questions over how the state allowed the largest fraud in Vermont’s history to occur remain.
New details are likely to come out about the state’s EB-5 program as criminal allegations and an investor case go to court in 2020.
A suit brought by three Chinese investors that alleges an attorney got payoffs for bringing foreign investors to Jay Peak developers is set for trial on April 20.
Investors can proceed with negligence claims against the state for lax oversight of Jay Peak projects.
Attorney General TJ Donovan requested Auditor Doug Hoffer hold off until the criminal cases against Ariel Quiros and Bill Stenger are resolved.
Judge Christina Reiss’ reversal comes in a legal dispute regarding the questioning of a whistleblower about what he knows about an alleged Jay Peak “kickback” scheme.
The judge ruled that a deposition of the principals of Rapid Visas USA must move forward.
In the wake of last week’s federal charges, some are pointing a finger of blame at the state, saying it was responsible for providing oversight through the state-run EB-5 regional center.
Stowe attorney Russell Barr says defrauded foreign investors should be able to sue the state for lack of oversight on EB-5 developments.
The former governor said he never made misrepresentations about the project, despite appearing in a 2013 promotional video in which he later admitted making a false statement.
Chief assistant attorney general William Griffin argues that attorney Russell Barr is making an ‘end-run’ around a previous decision to toss his lawsuit against the state.