EB-5 Scandal: Special Loans To Help Contractors Left High And Dry
Contractors left high and dry by the EB-5 scandal that shut down Jay Peak and Burke Mountain projects can now get special loans to tide them over until payments come in.
Special loan programs are now available for affected building contractors from the Vermont Economic Development Authority (VEDA) and the Northern Community Investment Corporation (NCIC).
NCIC and VEDA are collaborating to provide interim working capital financing to eligible and qualified affected businesses – many in the Northeast Kingdom and surrounding counties – as they face a busy summer construction season.
“There are companies who through no fault of their own are caught in a situation where they need working capital to be able to take on new construction contracts while they await payment, and protect their workers in the process,” said Pat Moulton, Vermont secretary of Commerce and Community Development.
VEDA has created the Jay/Burke Contractor Assistance Loan Program, providing financing through the Authority’s Small Business Loan Program.
No state money is involved.
Loans typically will be made for up to six years, with payments in the first year made on an interest-only basis. Loans will be due at the earlier of collection of the contractor’s receivables, or at loan maturity, which may be extended if necessary.
“We believe it is vital to the health and vitality of these affected businesses to help them bridge their way to a robust 2016 construction season,” VEDA CEO Jo Bradley said.
“We are hopeful that an injection of interim working capital financing will help qualified businesses start new projects and keep their workforce employed, which is very important for the region,” Bradley said.
“NCIC is working seamlessly with VEDA in this program to help contractors from the Northeast Kingdom of Vermont and Northern New Hampshire continue operations and sustain employment,” said Jon Freeman, NCIC president.
Both Burke Mountain Resort and Jay Peak Resort are now in federal receivership in the wake of allegations made in April by the U.S. Securities Exchange Commission and Vermont attorney general against owner Ariel Quiros Sr. and his partner, Bill Stenger of Newport City.
The two are accused of a massive fraudulent Ponzi-like scheme in which hundreds of international investors were deceived and $200 million misused. Federal authorities allege that Quiros took $50 million for himself.
Nearly $5 million is owed to subcontractors and two general contractors for the two resorts who built or worked on a new hotel and conference center, housing developments, a scientific research enterprise now unlikely to ever come to fruition, and more.
Deadlines for liens to be perfected for contractors and subcontractors already out substantial sums of money have been extended. All those owed money from the projects will have their claims recognized and heard by the federal receiver appointed by the U.S. District Court judge in Florida, according to a decision earlier in June.
Established in 1975, NCIC is a non-profit corporation that provides capital and expertise to strengthen businesses, communities and employment opportunities across Northeastern Vermont and Northern New Hampshire.
NCIC offices are located in Lancaster, N.H. and St. Johnsbury.
- Vermont EB5 Regional Center
- Jay Peak - Q Burke Mountain Resort, Hotel and Conference Center L.P.
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION
- Ariel Quiros
- Bill Stenger
- State of Vermont vs Bill Stenger & Ariel Quiros
- UNITED STATES SECURITIES AND EXCHANGE COMMISSION vs Ariel Quiros & Bill Stenger
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