A new lawsuit claims the former owner of Jay Peak Resort knowingly participated in fraud when a Miami businessman bought the property in 2008.
The U.S. government has said the businessman, Ariel Qurios, purchased Jay Peak for $25.7 million by raiding EB-5 foreign investment funds that were supposed to be dedicated to new projects at the Northeast Kingdom resort. Federal and state officials allege that Quiros went on to defraud foreign investors through a "Ponzi-like" scheme at seven EB-5 projects at and around Jay Peak.
The federal EB-5 program offers a path to citizenship for foreign nationals who invest $500,000 in projects in the United States that create jobs.
The federal allegations against Quiros are moving toward trial. His business partner, Bill Stenger, has agreed to settle the federal government's civil case, but state claims are continuing against both men.
The new lawsuit, filed April 7 by Jay Peak investor Tony Sutton and another anonymous investor, blames the Canadian company Saint-Sauveur Valley Resorts, Inc. for allowing Quiros to access about $23 million worth of EB-5 money before purchasing the resort.
The U.S. Securities and Exchange Commission said in court documents that Saint-Sauveur Valley Resorts explicitly told Quiros not to touch the EB-5 funds — but Quiros turned around and used the investor money to purchase Jay Peak.
"Despite the fact that (Mont Saint-Sauveur International) clearly explained to Quiros and Stenger they could not use investor money to purchase Jay Peak, Quiros — aided by transfers that Stenger made — did exactly that," the SEC states in court filings. "Over the next two months Quiros, through Q Resorts, used $21.9 million of investor funds ... to fund the vast majority of his purchase of Jay Peak."
In the new lawsuit, the two investors allege that Saint-Sauveur Valley Resorts knew about the fraud and "knowingly relinquished control of the investor funds to Quiros in order to receive the funds back in payment for the sale of Jay Peak to Quiros."
The investors are hoping to force Saint-Sauveur Valley Resorts to return millions of dollars from the sale to defrauded investors.
Alwynn Gillett, an attorney who represents the Canadian company, said she had not seen the lawsuit and was unable to comment Tuesday.
Jay Peak has been under control of a federal receiver, Michael Goldberg, since the allegations of fraud came to light in April 2016.
- 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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