The state of Vermont has reached a settlement of $16.5 million to resolve all pending and potential lawsuits from foreign investors in development projects at the Jay Peak resort. This ski area was involved in a significant fraud case with its former owner and president. The settlement was announced on Wednesday.

In 2016, the federal Securities and Exchange Commission and the state alleged that Ariel Quiros, the former owner of Jay Peak, and William Stenger, the former president, were part of a “massive eight-year fraudulent scheme.” The allegations stated that they misused more than $200 million of the $400 million raised from foreign investors through a visa program for various ski area developments. The EB-5 program encourages foreigners to invest in job-creating ventures in the U.S. in exchange for a chance to earn permanent residency.

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Quiros and Stenger settled civil charges with the SEC, with Quiros surrendering more than $80 million in assets, including the two resorts.

In 2019, Quiros, Stenger, and Quiros’ adviser William Kelly were indicted for their involvement in a failed plan to build a biotechnology plant using tens of millions of dollars in foreign investors’ money. Quiros received a five-year prison sentence, Stenger served just over nine months in prison, and William Kelly was sentenced to a year and a half.

Foreign investors filed lawsuits against the state and its immigrant investor regional center, accusing them of inadequate supervision of the projects.

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 Jay Peak resort

Jay Peak resort is pictured in Jay, Vermont, on April 18, 2016. The state of Vermont has agreed to pay over $16 million to settle all pending and potential fraud lawsuits from foreign investors relating to Jay Peak’s development project. (AP Photo/Lisa Rathke, File)

If approved by the court, the settlement announced on Wednesday will “resolve all pending and potential lawsuits against the State that have been brought or could be brought by the approximately 850 investors in the Jay Peak EB-5 projects,” according to Attorney General Charity Clark’s news release. The state will also continue to support the investors’ pursuit of green cards. If successful, this will reduce the overall settlement payment by $4 million, added Clark.

“As I’ve said before, Vermonters, investors, and the State of Vermont were all deceived by the fraud of Ariel Quiros, Bill Stenger, and William Kelly,” Clark stated. “This civil settlement will bring a global resolution to the State’s involvement in this matter, protecting it from additional EB-5 lawsuits and preventing further financial harm to Vermont.”

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The $16.5 million payment will be made over three years into the Jay Peak Receivership, which will distribute the funds. The investors had contributed over $400 million to the eight Jay Peak EB-5 projects.

Last month, the state reached a settlement payment of $750,000 to resolve claims from eight Jay Peak investors.


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