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Alleged EB-5 Fraudster Asks To Swap Attys In $350M SEC Suit

Alleged EB-5 Fraudster Asks To Swap Attys In $350M SEC Suit

EB-5 Visa, EB5 Visa, EB-5 Investment

Jay Peak resort owner Ariel Quiros has asked to swap out his counsel in the U.S. Securities and Exchange Commission's $350 million EB-5 visa suit against him, requesting a Florida federal court allow León Cosgrove LLC and Mitchell Silberberg & Knupp LLP to leave the action. 

In the Wednesday filing, Quiros asked to replace the firms with Melissa D. Visconti of Damian & Valori LLP as his counsel.

“Defendant Ariel Quiros has terminated the undersigned law firms and instructed them to do no further work on his matters,” according to the motion.

The firms could not be reached for comment late Thursday.

Quiros has already experienced counsel-related issues in the SEC suit, which accuses Quiros and Jay Peak CEO William Stenger of misappropriating the bulk of $350 million raised from investors hoping to obtain visas through the EB-5 program, which provides green cards to foreign nationals who invest in job-creating American businesses.

Last year, the court froze Quiros' assets, including a Miami condo and the resort, and placed them in a receivership under the control of Akerman LLP’s Michael I. Goldberg days after the SEC unveiled its fraud suit against Quiros and Stenger.

Quiros had asked the court for about $497,000 to pay lead counsel Mitchell Silberberg, about $25,000 to pay Vermont counsel Dinse Knapp & McAndrew PC, $37,000 to pay Florida local counsel León Cosgrove and about $15,000 to pay former Florida counsel GrayRobinson PA.

In October, a Florida federal judge approved a fraction of the attorneys' fees Quiros sought. U.S. District Judge Darrin P. Gayles said he would only approve the disbursement of $80,000 from Quiros' frozen assets to pay for his attorneys, just part of the almost $560,000 he had requested to defend himself in the SEC's action and others, including a case filed by the state of Vermont, a suit filed by the receiver, three federal class actions and two state court lawsuits.

In November, Judge Gayles found that the SEC’s evidence supported a preliminary finding that Quiros had fraudulently enriched himself with investor funds and issued a preliminary injunction barring him from selling securities or managing a company that has issued securities. Quiros is appealing that order to the Eleventh Circuit.

A trial is scheduled in the case for Sept. 17, 2018.

The government is represented by Robert K. Levenson and Christopher E. Martin of the SEC.

Quiros is represented by David B. Gordon and John S. Durrant of Mitchell Silberberg & Knupp LLP, and Scott B. Cosgrove and James R. Bryan of León Cosgrove LLC.

The case is Securities and Exchange Commission v. Quiros et al., case number 1:16-cv-21301, in the U.S. District Court for the Southern District of Florida.


Source: https://www.law360.com/articles/907988/alleged-eb-5-fraudster-asks-to-swap-attys-in-350m-sec-case

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