No elected officials have been charged for their role in the EB-5 scandal.
Friday, April 29, 2022, NewEnglandSkiIndustry.com
Ariel Quiros and Bill Stenger with Senator Patrick Leahy and Governor Peter Shumlin
Former Jay Peak and Burke owner Ariel Quiros was sentenced to five years in prison today due to charges related to the massive EB-5 scandal. Quiros is also on the hook for $8 million in restitution.
Former Jay Peak CEO Bill Stenger and former COO William Kelly were each sentenced to eighteen months in prison earlier this month. All three accepted plea bargains.
No elected officials have been charged for their role in the EB-5 scandal.
Background
Bill Stenger and Senator Bernie Sanders
Stenger, a political science major at Syracuse University, started working at at Jay Peak in 1985 and in 2008 recruited Ariel Quiros to purchase the resort from Mont Saint Sauveur International. Following the acquisition, the group's EB-5 immigrant investor proposals expanded throughout the Northeast Kingdom with a planned price tag of $500 million. Meanwhile, Stenger and Quiros started a massive campaign of contributing to politicians, paying for their international junkets, and arranging press conferences and committee appearances to boost investor interest.
Senator Patrick Leahy and Bill Stenger
A Federal program created by Senator Ted Kennedy and championed by Senator Patrick Leahy, EB-5 allows immigrants to obtain a green card in exchange for investing $500,000 in a government endorsed business that creates ten jobs. In the case of the Jay Peak program, 20% to 25% of the investment was taken by developers and agents as fees.
The SEC took control of the properties on April 13, 2016, alleging that Quiros and Stenger were running a Ponzi scheme that was defrauding investors. The businesses were placed in receivership under Michael I. Goldberg, with Leisure Hotels and Resorts of Kansas City appointed to run the resorts.
A cornerstone of the SEC's lawsuit was the allegation that margin loans were taken out with EB-5 funds as collateral, a strategy that Quiros described in detail. Quiros and banker Joel Burstein both stated that Stenger participated in margin loan conversations.
The resorts remain under control of the government appointed receiver.
