Vermont claims immunity from EB-5 lawsuit

Antonio Pomerleau reflects on the occasion of his 100th birthday at his home in Burlington on Wednesday, August 30, 2017. Pomerleau was born on September 28, 1917.

Vermont plans to repudiate a lawsuit over its handling of the troubled EB-5 foreign investment program by arguing that the state is immune from liability.

Megan Shafritz, chief of the Civil Litigation Division of the Vermont Attorney General's Office, gave a preview of the arguments Monday at Vermont Superior Court in Hyde Park. 

The federal EB-5 visa program offers a path to permanent U.S. residency for foreign nationals who contribute at least $500,000 to projects that create jobs in rural or economically depressed regions. 

State and federal investigators have alleged that businessmen Ariel Quiros and William Stenger misused about $200 million that was invested in projects in Vermont's Northeast Kingdom over eight years.

Foreign investors who were caught up in the alleged fraud sued the state in May, claiming that the Vermont EB-5 Regional Center failed to prevent the fraud, despite the state's repeated assurances that it would provide uniquely rigorous oversight. The lawsuit goes on to argue that state officials attempted to cover up the misconduct.

At the first court appearance in the case Monday, Shafritz said the state would ask by October 9 for a judge to throw out the lawsuit, arguing that state officials are immune from liability.

In the meantime, Shafritz argued that the attorneys suing the state should not be allowed to obtain sworn statements from people involved in the EB-5 program.

"The Vermont Supreme Court has been very clear that immunity issues should be, must be resolved at the earliest opportunity, which in this case is the state's motion to dismiss," Shafritz said, "and that no discovery is permitted until that question is resolved."

Vermont Superior Court Judge Thomas Carlson agreed to postpone any depositions until after October 9.

The lawyer for the EB-5 investors, Chandler Matson of Barr Law Group in Stowe, argues the state is not immune from the lawsuit because the Vermont Regional Center was acting as a "securities brokerage house."

He is eager to obtain sworn statements from EB-5 experts as soon as possible.

"Memories fade, evidence goes away, and there's no sense in waiting a year or hopefully less to at least start getting some testimony," Matson said.

http://www.burlingtonfreepress.com/story/news/crime/2017/09/25/vermont-claims-immunity-eb-5-lawsuit/694766001/

Mentions

• Vermont EB5 Regional Center
• Ariel Quiros
• Bill Stenger

Litigation Cases

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

States

• Vermont