Quiros agrees to settlement

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copyright the Chronicle August 30, 2017

 

by Joseph Gresser

 

Ariel Quiros, the owner of Jay Peak, has followed the path blazed several months ago by Bill Stenger, the resort’s former president, and agreed to a settlement on civil charges of investment fraud. Mr. Quiros promised to accept U.S. District Court Darrin Gayles’ decision on how much of the money he got from illegal actions he will return to investors and what penalties he must pay.

Mr. Quiros, in agreeing to the settlement, neither admitted nor denied guilt.

Judge Gayles accepted the settlement worked out between the federal Securities and Exchange Commission (SEC) and Mr. Quiros, and the case was marked closed on August 23.

A temporary injunction that forbade him to be involved with companies seeking investments through the federal EB-5 program has been made permanent. In addition, Mr. Quiros has agreed to not appeal any penalties the judge assesses or try to deduct them from his income taxes.

He will be required to pay whatever amount Judge Gayles deems appropriate with interest calculated from April 16, 2016, the day charges were unsealed. The agreement says Mr. Quiros will pay the same interest rate the Internal Revenue Service charges taxpayers who owe it money.

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Judge approves $150-million settlement

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copyright the Chronicle July 5, 201

 

by Joseph Gresser

 

U.S. District Court Judge Darrin Gayles cleared the way for contractors, merchants, and some EB-5 investors to recover money Jay Peak and Burke Mountain Resorts owes them.

On Friday he gave final approval to a $150-million settlement reached between Michael Goldberg, the court-appointed receiver, and Raymond James & Associates, a financial services company accused of enabling Jay Peak owner Ariel Quiros’ alleged fraud.

Judge Gayles tersely described the EB-5 program as one “through which an investor who invested $500,000 in a project that created ten or more jobs per investor would be eligible to apply for unconditional, permanent residency in the United States on an expedited basis.”

While Mr. Quiros owned Jay Peak and Burke Mountain Resorts, his companies ran eight such EB-5 projects. Six of them were completed or will soon be completed so their investors will qualify for permanent residency in the U.S.

The Burke Mountain Hotel opened for business last fall, but some planned amenities were never built, so not enough jobs were created to make all its investors eligible for green cards.

AnC Bio, the biomedical facility that was to be built in Newport, barely got off the ground, so none of its investors will qualify for U.S. residency.

According to civil fraud charges filed by the U.S. Securities and Exchange Commission (SEC), Mr. Quiros misappropriated about $220-million of the $350-million investors put into his projects. He was also accused by the commission of taking more than $50-million for his own use.

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EB-5 investor sues state

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copyright the Chronicle June 21, 201

 

by Joseph Gresser

 

An investor in the first of Jay Peak’s EB-5 projects is suing the state Agency of Commerce and Community Development, the Department of Financial Regulation, the Vermont Regional Center (VRC), and a number of those agencies’ employees.

The lawsuit, filed in the Civil Division of Lamoille County Superior Court, claims the two branches of state government and the named individuals effectively acted as Ariel Quiros’ and Bill Stenger’s partners, helping them to perpetrate fraud.

Mr. Quiros is the subject of a civil suit filed by the federal Securities and Exchange Commission (SEC) that charges he mishandled around $200-million of the approximately $350-million he raised to pay for hotels and other facilities at Jay Peak and Burke Mountain Resorts, as well as a biomedical facility in Newport.

The suit claims that Mr. Quiros also took about $50-million of the investors’ money for his own use.

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Raymond James agrees to $150-million settlement

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copyright the Chronicle April 19, 2017

 

by Joseph Gresser

 

A year and a day after the federal and state governments filed civil charges connected with Jay Peak’s EB-5 projects, the receiver in the case announced a settlement intended to pay money owed to contractors and return the money invested in some failed enterprises.

Michael Goldberg, who was appointed to oversee businesses and other assets owned by Ariel Quiros, appeared at a press conference April 13 in Montpelier with Governor Phil Scott to announce an agreement with Raymond James & Associates, Inc., that could be worth as much as $150-million.

The same day, Raymond James posted the text of the settlement reached with Mr. Goldberg in a filing with the SEC. As a publically traded company, the financial services firm is required to disclose events, such as legal settlements, that may affect its business prospects.

Although it agreed to pay, Raymond James did not admit any wrongdoing.

According to the settlement documents, the company and the receiver have been discussing a settlement since last summer. Last June the Vermont branch of Raymond James reached a $5.95-million settlement with the state. That money will be subtracted from the $150-million the national firm is to pay out.

In a telephone interview Tuesday, Mr. Goldberg said he is pleased with the settlement, but said it had taken a lot of hard work to come to terms.

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Lawsuit claims EB-5 fraud started in 2008

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copyright the Chronicle April 12, 2017

 

by Joseph Gresser

 

BURLINGTON — Two investors in EB-5 projects at Jay Peak Resort claim that securities fraud at the ski area started in 2008 when Ariel Quiros paid for the resort using money meant to build hotels. They also say Jay Peak’s former owner had to know what was going on.

Antony Sutton and a man referred to only as John Doe filed a civil lawsuit in U.S. District Court for Vermont on April 7 and charged Saint-Sauveur Valley Resorts, Inc., the former owner, with turning a blind eye as Mr. Quiros paid with money that they told him was meant solely for improvements to the resort.

The two want Saint-Sauveur to return $21.9-million they claim it first gave to Mr. Quiros and then improperly accepted as payment when he bought the resort from the Canadian company.

Mr. Sutton invested $500,000 in Jay Peak Hotel Suites LP (Phase I), and Mr. “Doe” put the same amount into Jay Peak Hotel Suites II LP (Phase II).   Both projects raised money through the federal EB-5 visa program, which trades investments in job-creating companies for a U.S. Green Card and a path to citizenship.

The first two of what would eventually be seven such projects were started by Saint-Sauveur and taken over by Mr. Quiros when he bought Jay Peak.

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Federal receiver fields questions in Jay

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copyright the Chronicle March 8, 2017

 

by Joseph Gresser

 

JAY — Residents here heard from the effective owner of Jay Peak Resort before they began their Town Meeting Tuesday morning. Michael Goldberg, the receiver appointed by U.S. District Judge Darrin Gayles to oversee the businesses owned by Ariel Quiros, answered questions from voters about the ski area’s future.

The big news was that construction will soon begin on the remaining portion of what is known as the Stateside project. Mr. Quiros, who is facing civil charges of investment fraud in state and federal court, raised money from foreign investors to build a hotel, a recreation center, a medical center, and around 84 homes at the resort.

Mr. Goldberg said work will begin in the next few months on the medical and recreation centers as well as the homes. The hotel was completed and opened in 2013.

The receiver said it is important to finish all construction at the resort so as to get the best price when it goes on the market. The sale, he said, will probably take place in a year or two.

Mr. Goldberg said the area had a record winter, and has already booked 60 weddings for the coming summer.

“To book a wedding a year out, you have to have faith the place is going to be there,” Mr. Goldberg said.

A year or two more of profitable operation should make sure the resort fetches top dollar when it goes on the block, he said.

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SEC wins early victory against Quiros

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copyright the Chronicle November 23, 2016

by Joseph Gresser

 

In a ruling issued Monday, U.S. District Judge Darrin Gayles gave the Securities and Exchange Commission (SEC) an early victory in its suit against Ariel Quiros. The federal agency was granted its request for a preliminary injunction to keep things as they have been since it went to court in April and charged Mr. Quiros with securities fraud.

The judge’s ruling maintains the status quo until the underlying issues in the civil suit are resolved at trial. That means Mr. Quiros’ property remains under the control of Michael Goldberg, the court-appointed receiver, and Mr. Quiros is barred from any kind of involvement in businesses connected with the federal EB-5 visa program.

When the case comes to trial, Mr. Quiros faces the prospect of being forced to disgorge as much as $200-million in money the government said was improperly used. Mr. Quiros has also been charged with taking more than $50-million for his personal use.

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Lawyers for Stenger tell state to bring it on

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copyright the Chronicle October 19, 2016

by Joseph Gresser

NEWPORT — Lawyers for Bill Stenger have told the state to bring it on. In a September 7 filing in the Civil Division of Washington County Superior Court, they denied all the fraud charges related to EB-5 visa funded projects sponsored by Jay Peak and have demanded a jury trial.

Mr. Stenger recently settled similar charges levied against him by the federal Securities and Exchange Commission (SEC). In the settlement, Mr. Stenger did not admit or deny the charges against him, but he agreed to accept whatever penalties U.S. District Judge Darrin Gayles may decide to assess.

Mr. Stenger also promised that he would not say anything that contradicted the SEC charges.

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Potential Jay Peak buyer accused of fraud

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copyright the Chronicle September 21, 2016 

by Joseph Gresser

JAY PEAK — When Michael Goldberg got a letter offering to buy Jay Peak for $93-million some aspects of it set off alarms. His suspicions proved to be justified when a quick search showed that the man who made the offer has been accused of a $3-million stock swindle.

Mr. Goldberg explained his concerns about the offer from Jean Joseph of Bellwether Business Group and his follow-up correspondence in a report filed September 16 in U.S. District Court for the Southern District of Florida in Miami.

Mr. Goldberg said the original offer was unusually vague, and didn’t fully specify what the purchaser wanted to get for his money. In addition, the due diligence list, setting out the kind of information about Jay Peak the potential purchaser hoped to get before finalizing the deal, included a number of items that were not applicable to a ski area.

The timeframe for completing the sale proposed by Mr. Joseph also appeared impossibly short, Mr. Goldberg said.

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Stenger settles, no longer works at Jay

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copyright the Chronicle September 7, 2016

by Joseph Gresser

Bill Stenger, the former president of Jay Peak Resort, is no longer a defendant in the civil lawsuit filed by the federal Securities and Exchange Commission (SEC) against him and the owner of the resort, Ariel Quiros. Mr. Stenger is also no longer employed by Jay Peak.

After several months of negotiations, Mr. Stenger reached an agreement with SEC lawyers under which he will be liable to whatever penalties U.S. District Judge Darrin Gayles might impose for securities fraud. Although Mr. Stenger neither admitted nor denied the charges filed against him, he will allow himself to be treated as if he were guilty of the charges for purposes of punishment.

As part of the settlement, Mr. Stenger is permanently barred from participating in any way in selling securities connected to the EB-5 visa program or having any control over a business that does.

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