“We survived it.”
That’s about the best Chip Percy can say about the EB-5 fraud scandal that brought construction at two ski resorts and a biomedical research facility in the Northeast Kingdom grinding to a halt.
Percy owns Dale E. Percy Inc., the Stowe-based excavation company started by his uncle, and his business is still owed over $200,000 for work done at Jay Peak Resort and AnC Bio in Newport over the past few years.
Percy has been able to stay afloat, but other contractors haven’t been so lucky.
“We haven’t had to lay people off,” Percy said.
Now, there’s finally light, and at least some financial restitution, at the end of the tunnel for Percy and the other contractors hoping to be paid for millions of dollars in work. In April, a $150 million settlement was reached that will finally reimburse unpaid contractors, trade creditors and investors associated with EB-5 projects at Jay Peak and Burke Mountain Resort.
“All contractors who have worked on” the Jay Peak and Burke projects and are still owed money “will be reimbursed,” Michael Goldberg told the News & Citizen in a phone interview on Monday. Goldberg, an attorney in Florida, is the court-appointed receiver who is now overseeing the EB-5 properties and projects in the Northeast Kingdom.
The two-part, $150 million settlement was reached with the Florida-based company Raymond James Financial Inc. for its role in the alleged fraud at the EB-5 projects in northern Vermont.
The $150 million will be used to pay Chip Percy and 41 other contractors, plus 513 trade creditors and 169 project investors who suffered financial loss as a result of the alleged fraud.
All told, 241 Vermont-based businesses, nonprofits and municipalities will receive $9.06 million. Chip Percy and the other 41 contractors, who aren’t all from Vermont, will be paid $5.8 million for work on Jay Peak’s Stateside Hotel and the Burke Mountain Hotel and Conference Center.
Percy was paid for much of the early work his crews did, but by the end of 2016, he was still owed roughly $125,000 for his company’s work at Stateside.
“We did a lot of work up there,” Percy said. For half a decade, his crews were at Jay Peak working on different parts of the project. “We worked on almost everything.”
So far, Percy and the other contractors have been paid for 33 percent of the outstanding balance on their work at Jay Peak.
“I haven’t been fully reimbursed yet,” Percy said. He’s still waiting on a check for about $90,000 to settle the account.
Goldberg expects those checks to be issued in the next few months.
The settlement supersedes a previous repayment arrangement that would have paid Percy and other contractors only a portion of what they were owed.
“It was always my hope to pay the contractors back in full,” Goldberg said, and the agreement with Raymond James Financial finally made that possible.
The settlement was announced one year after fraud charges were filed against Jay Peak owner Ariel Quiros and resort President and CEO Bill Stenger for misusing roughly $200 million in immigrant investor funds through the EB-5 visa program. The program grants permanent residency to foreign investors who invest $500,000 or more in U.S. businesses to create at least 10 full-time jobs.
The $150 million settlement was filed in U.S. District Court in Florida and is subject to final approval by the court.
“This is significant for the hundreds of businesses, contractors and investors that have been harmed by this alleged fraud,” Vermont Gov. Phil Scott said.
- Vermont EB5 Regional Center
- Jay Peak - AnC Bio Vermont
- Jay Peak - Q Burke Mountain Resort, Hotel and Conference Center L.P.
- 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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