The Vermont Department of Regulation has reached a settlement with Raymond James and Associates, Inc., in connection with the EB-5 scandal in the Northeast Kingdom.
Raymond James has agreed to pay the state $5.95 million for violations of securities laws by Jay Peak principals Bill Stenger and Ariel Quiros through a Miami branch office of Raymond James.
Susan Donegan, commissioner of the Department of Financial Regulation, said in a statement she was pleased with the settlement because it recovers some of the EB-5 investors' money. The federal program allows foreign nationals who invest $500,000 in a depressed region of the country to receive green cards if a required number of jobs are created by the project they invest in.
"Since the seizure of the Jay Peak-related EB-5 projects, investors have been rightly concerned about possible recovery of funds," Donegan said. "This settlement contributes to their restitution."
The agreement provides for the payment of $4.5 million to the appointed federal receiver responsible for Jay Peak and its related EB-5 projects for the purpose of reimbursing possible claims by investors. The settlement also provides for $200,000 to be paid to the Department of Financial Regulation for the cost of its investigation and $1.25 million paid to Vermont's general fund as an administrative penalty.
Federal authorities seized Jay Peak, Burke Mountain and related EB-5 projects in April after investigations by the U.S. Securities and Exchange Commission and the Department of Financial Regulation resulted in allegations of a massive fraud by Stenger and Quiros. The agencies allege that Quiros misappropriated some $200 million of EB-5 investors' money, including about $50 million for his own personal uses.