Quiros’ SEC Interview Reveals Depth Of Investigation
Ariel Quiros Sr. was called before an enforcement division of the U.S. Securities Exchange Commission on May 22, 2014, the day after his business partner in the Jay Peak and Q Burke resorts, Bill Stenger, spent a full day being interrogated.
Quiros, like Stenger, was brought back before a team of SEC investigators in Miami as part of the deposition taken from him, in September 2015.
The two days of hearings with SEC investigators resulted in 485 pages of transcripts, documents show.
State officials announced just days ago that Q Burke and Jay Peak partners Ariel Quiros Sr. and Bill Stenger have been running a “fraudulent scheme” using foreign investment money under the EB-5 program.
All of the Quiros/Stenger projects have entered federal receivership and an interim administrative team has stepped in at both Q Burke and Jay.
In the early pages of the first transcript, from May 2014, Quiros stated of being interviewed by the SEC, “I’d just like you people to know that his is the first time in my life I’ve ever done this, so it’s an experience and a half. I’m going to try to do my best, but I want to show full transparency. I want to show that there’s nothing that I have hidden, make that very clear, and that everything I have has been exposed.”
Quiros referenced his childhood, saying he had been born in Harlem and was a strong soccer player and earned a scholarship to Trinity Pawling Prep School.”
“From time to time and for many years, my father would take us to Vermont when we were young,” Quiros told investigators.
How he came to buy Jay Peak was the focus of much of the early testimony, as it had been in Stenger’s deposition, the record shows.
“And Jay Peak had a lot, a lot of buyers, a lot of, a lot of buyers,” he said. “But the Governor, the Senator, Bill Stenger, the selectmen, which are their own governors for every town, were so frightened that Jay Peak will become commercialized. That is to say they didn’t want a new company to come in and buy Jay Peak that would convert it into a Starbucks, Pizza Hut, McDonald’s, Dunkin Donuts, Home Depot.”
“So they said, Quiros, you have a farm, you have friends here, you know Vermont, you know it since you were a baby, why don’t you consider? ” he told SEC investigators.
He said, “…And they had this system — a new system that was a pilot program, a test program, which was called EB-5.” He tells them that the town’s selectmen and Bill Stenger raised the EB-5 concept with him for the first time.
“So they all asked and asked. And they said, Quiros, it can happen, we’ll get this EB-5 going, and we’ll get foreigners to invest, and we’ll re-develop it,” he testified.
He said his instinct was to be suspicious of the program.
“I went to Montpelier, because we don’t believe — I don’t believe this whole thing about EB-5 and immigrants through all the economy is failing at record speed, and I don’t want to get caught in a trap,” he told SEC investigators. “And, oh my Lord, what do I do?”
He said, “But everybody, please Quiros, please Quiros, please Quiros, buy Jay Peak, buy Jay Peak, buy Jay Peak. It was every day, every day.”
Quiros referred to what he said in 2008 to Stenger, “I’ll buy it, but you’ve got to run it, because I wouldn’t even know where to begin. And he said, ‘Quiros, our whole team is here. Everybody is up here. We’ll run it with our eyes closed. We have a lot of support.’”
Quiros said the financials showed that the sellers owed Jay Peak back millions of dollars.
By the time of the closing for Jay Peak, Quiros told the SEC team, the money he said was owed to the new ownership was able to be tapped, “It was a perfect, perfect, perfect situation.”
“I used that money, plus the money they owed me to acquire Jay Peak,” testified Quiros, saying he also used “a couple of million of my money, approximately two and a half million dollars…It is a true story.”
He asks, “Why did it happen? It happened because, one, everybody was afraid to buy Jay Peak. It was too far out there in the country. Number two, they had started this EB-5 program way early than they were going to sell it…And I mean the economy was crashing, Wall Street, Citibank, everybody was closing up.”
Investors, Quiros said, were assured this was safe; the investments were going into Treasury bills.
“I know I don’t make no money, but I can sleep at night, because all the money is there, all the money is there,” Quiros testified. He says he set up a margin account to take what was owed to him from the investments.
Of using investor funds that were raised by the prior owners of Jay Peak for EB-5 projects toward the actual purchase of the resort, Quiros said, “…Once the funds were there now in the new owner’s hand, which is Ariel Quiros and Q Resorts and Jay Peak, now I can do whatever I want… So it is the reason why I tell you I don’t know if they understood about the EB-5 program, because they, basically, left that much money on the table.”
“But you keep on referring to investors’ funds. I did not use investors funds,” said Quiros. “Whatever funds I took into my account, I had full control, and it was my funds, my corporate funds…What everybody’s trying to get at is that I used other people’s money to buy Jay Peak, and that is one hellacious false statement, very false statement. I can show that, and I’ve shown that with documents.”
In the second half of his deposition before the SEC, Quiros says he was due about $100 million from the projects in all, “…If you subtract the funds that I have to pay out to everybody else, the balance that’s left out of my profits is still in excess of over forty to fifty million US dollars.”
“And then if you extract from those forty to fifty million, what I have bought like — I bought some properties,” says Quiros. “Maybe I have spent maybe ten to fifteen million dollars of that profit…I bought Burke. I have bought my home in New York. I bought another home in New York. These are my profits through that.”
Mentions
- Vermont EB5 Regional Center
- Jay Peak - Q Burke Mountain Resort, Hotel and Conference Center L.P.
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Bill Stenger
- Ariel Quiros
Litigation Cases
- State of Vermont vs Bill Stenger & Ariel Quiros
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION vs Ariel Quiros & Bill Stenger
States
- Vermont
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