Court Rules that Another Vermont EB-5 Project was Corrupt

A Vermont state court has ruled that another failed EB-5 project in the state was corrupt, not just a financial disaster.

This is in addition to the big failure and multi-million dollar swindle in the Jay Peak ski lodge and at an associated medical laboratory that has caused so much controversy and press coverage, as we noted earlier.

This is the smaller-scale story of EB-5-supported Seldon Technologies, whose departure from business we reported earlier. At the time we said that the water-filtration company, based in Windsor, VT, had lost its only paying customer (a firm in Mexico) and had laid off all 32 of its employees. We also pointed out Seldon’s ties to a multi-millionaire ally of Zimbabwe’s notorious dictator, Robert Mugabe, and to George Gilder, the supply-side economist, a member of its board as recently as 2015.

Subsequently we have learned, from a Vermont state court, that in addition to being quirky and incompetent, Seldon Technologies was a corrupt organization.

A former employee of Seldon, Linda West, who was familiar with its finances because of her job, said that she was fired by Seldon when she objected to the diversion of EB-5 money to pay the state and federal income taxes of an officer of the firm, and to help that unnamed officer buy stock in the company. The judge and jury hearing the case awarded her $400,000 in damages, according to newspaper accounts.

There is an almost identical situation in Florida, that we will report on soon, in which a misbehaving EB-5-supported company fired one of its front office employees when she objected to the treatment of EB-5 money. So she sued. The moral – or maybe the immoral – of this story is that if you are running a cheating EB-5 company, make sure to share some of the ill-gotten gains with the lady who is keeping the books!

Meanwhile, elsewhere in Vermont, Patricia Moulton, the Secretary of the Agency of Commerce and Community Development, has publicly asked the Department of Homeland Security to grant visas to the EB-5 investors whose money has been stolen. There are about 400 investors in this category.

Bear in mind that she was and is a public official, acting in an open manner, seeking benefits for persons who had either lost or were about to lose money because of the federal and state governments’ mishandling of the EB-5 program. Bear further in mind that she was a Democratic state cabinet official in a state with one of its senators running for president and the other the ranking member of the Senate Judiciary Committee, and that she is asking this of a federal agency in a Democratic administration.

What did Ms. Moulton get from DHS?

A form letter telling her how one applies for EB-5 visas.

According to the VTDigger news site: “USCIS is an interesting agency,” Moulton said. “You can’t speak with a human, you have to file a letter through the general mailbox.”

Secretary Moulton is largely – but not totally – correct on the refusal of DHS to allow its people to talk with those seeking benefits from it, a posture which has some utility. In the EB-5 program, thanks to a change made during the Obama administration, there is, under a precise set of circumstances, an opportunity for an agent of what is usually a private-for-profit outfit, the middleman entities called regional centers, to talk to DHS decision makers, as we reported more than four years ago.

But there are no exceptions for mere state officials.

While the State of Vermont’s earlier passive management of the EB-5 program has come under appropriate fire, it has been much more alert on these matters in the last couple of months.

http://cis.org/north/court-rules-another-vermont-eb-5-project-was-corrupt

Mentions

• Seldon Technologies
• Vermont EB5 Regional Center

Litigation Cases

• State of Vermont vs Bill Stenger & Ariel Quiros
• UNITED STATES SECURITIES AND EXCHANGE COMMISSION vs Ariel Quiros & Bill Stenger

States

• Vermont