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In Lawsuit, EB-5 Investor Accuses State Of Jay Peak Cover-Up

In Lawsuit, EB-5 Investor Accuses State Of Jay Peak Cover-Up

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

A man who invested a $500,000 in Jay Peak through the federal EB-5 foreign investment program is suing the State of Vermont and accusing state officials of being complicit in multi-million-dollar fraud allegedly perpetrated by Jay Peak owner Ariel Quiros and CEO Bill Stenger.

In 2014, EB-5 Tony Sutton, showed state officials documents that he said suggested investor funds were being used improperly. The Securities and Exchange Commission formally accused Stenger and Quiros of fraud in April 2016.

The new, 85-page lawsuit from Sutton says state officials helped Jay Peak's fraud continue even though they were well aware of what Stenger and Quiros were doing.

The civil suit, filed May 30 in Vermont Superior Court in Lamoille County, alleges that the Vermont Regional Center, which was created to manage and oversee EB-5-funded development projects in Vermont, helped Stenger and Quiros get away with fraud.

The lawsuit says that the Vermont Regional Center retaliated against an early whistleblower for bringing attention to possible fraud, hired a lawyer with a direct financial conflict of interest to do a study of the project’s oversight, and conspired with Jay Peak – the business it was supposed to monitor – to conceal the fraud.

The lawsuit says that the “Conspiracy to conceal the fraud becomes so effective, that even well-intentioned state officials were duped into submitting investor complaints to the VRC [Vermont Regional Center] – effectively forwarding the complaints for investigation by the wrongdoer.”

Officials at Vermont’s Department of Financial Regulation did not immediately respond to request for comment Wednesday morning.

Update 4:25 p.m. Secretary of Commerce and Community Development Michael Schirling issued the following statement in response to reports of the lawsuit:

“We have been made aware of a draft complaint against the State and others regarding the Vermont Regional Center, but at this stage we have only received documents provided by a member of the press.  We will review and respond to the complaint if and when it is formally received. We continue to support the projects in the VT Regional Center and, with regard to Jay Peak, are working closely with the Federal Receiver, Michael Goldberg, to ensure the best possible outcomes for investors and impacted parties.  Unfortunately, we cannot comment in greater depth on a matter anticipated to be in litigation.”

Staff at Lamoille County superior court have confirmed that the case was filed. As of Wednesday morning, staff said the court's computer system showed that the defendants in the case had not been served notice that they were sued.


Source: http://digital.vpr.net/post/lawsuit-eb-5-investor-accuses-state-jay-peak-cover#stream/0

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