EB-5 investors in failed Newport project can get money back

EB-5 investors in failed Newport project can get money back

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

Gov. Scott and Michael Goldberg explain the recent EB-5 financial settlement at the Statehouse in Montpelier on Thursday, April 13, 2017.

The foreign investors in a failed biomedical business project connected to the alleged EB-5 fraud in the Northeast Kingdom have a path to get their money back.

In some cases, the investors may choose to re-invest in another EB-5 project in the hopes of receiving permanent residence status in the United States.

Federal Receiver Michael Goldberg sent letters to each of the investors on Aug. 3, explaining that he plans to use money from a $150 million settlement agreement with Raymond James, an investment firm caught up in the alleged fraud, to return investors' initial $500,000 investment. 

Goldberg took over the EB-5 projects at Jay Peak, Newport and Burke Mountain after owner Ariel Quiros and his partner Bill Stenger were accused of fraud by the U.S. Securities and Exchange Commission last year.

The biomedical project in Newport, called AnC Bio, attracted 166 investors who put up $500,000 each for a total of $83 million. The investors were able to apply for conditional green cards that would become permanent, giving them permanent residence status, when the project was completed and it was determined the project had created a certain number of jobs.

Bill Stenger, at podium, and Dr. Ike Lee, AnC Bio CEO, at the groundbreaking ceremony for the new biotech facility in Newport. The project was caught up in an alleged fraud and never got underway. 

In the case of AnC Bio, the project was never built, leaving no assets with which to repay investors. The settlement with Raymond James solved that problem.

As Goldberg explains in his letter to the AnC Bio investors, the 83 investors who had not yet received their conditional cards can get their $500,000 investments back. The 83 investors who do have their conditional green cards can choose between getting their money back, or having it "redeployed" into a new EB-5 project, and remain eligible for a permanent green card.

Goldberg advises the investors who have a conditional green card that if they choose to get their money back, it is his belief that they will "lose any EB-5 priority and eligibility to obtain permanent residence status that you may have."

Goldberg said he is in the process of finding one EB-5 project for those seeking a visa to re-invest in; investors can not choose the project.

Attorney General William Sorrell speaks during a newsBuy Photo

"I hope to complete the process of selecting this project this month," Goldberg writes in the investor letter.

In making his decision, Goldberg says he will take into account the reputation of the developer and the track record of the EB-5 regional center overseeing the project. He said he would also consider the ability of the project to "create jobs within a relatively short period of time," and the likelihood of investors getting a return on their money.

There are currently more than 100 EB-5 projects underway across the United States, including two in Vermont at Mount Snow and South Face Village at Okemo.



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