Getting to the bottom of EB-5

About a dozen or so years ago, one of the largest real estate projects in Vermont history was about to be undertaken in the Northeast Kingdom. The concrete had yet to cure when a massive fraud was alleged to have been conceived and executed by the principals of the company responsible for the development. The $250 million scam was to be known as the EB-5 scandal. 

Notwithstanding the fact that over 800 foreign investors were snookered out of hundreds of millions of dollars, a dozen years later, not one of the many individuals involved in the fraud has yet to serve a day in jail. 

A who’s who list of characters, in addition to the project’s personnel, have had their fingerprints attached to the scandal ranging from Vermont’s senior political leadership, governors, U.S. senators, congressional reps, administrative officials, law firms, and investment firms. Why has it taken so long?

In part the delay has to do with the fact that about 80% of the investors are not Vermonters, but are from China. So who cares if foreigners willing to invest half a million dollars to obtain a green card suffered a financial loss?

Surely, another reason for the years of atrophy has to do with the personalities and their position. It would have been political suicide for a sitting governor to bring any criticism, let alone an investigation, of the involvement of the state’s congressional team – when $2.055 billion comes to Vermont annually from their base in Washington, D.C.

Then, of course, there were the years of denials and blockage of critical records by public officials. What has not been given as much publicity, but should have, was the pressure brought by the administrations upon the media, not to print anything derogatory about such a critical project in a much needed area of the state.

And what has been so conspicuously absent from this mother of all scandals has been the Vermont Legislature. This body of 180 has had years in which to investigate what was going on – especially so when the federal government closed down a Vermont agency that had jurisdiction and oversight of the project and its related investors. The leadership of the House and Senate failed miserably because they too did not want to have to reveal that many important politicians were deeply involved, who were critical to the legislators’ agenda.

The latest version of hands-off comes from the office of State Auditor Doug Hoffer. This elected state official has acquiesced to the state’s attorney general’s request to hold off any inquiry until the AG’s office completes its investigation. 

The AG’s office should be the last place an investigation be conducted. That office is the law firm for the state in that it provides the litigation support for state officials and departments. And in “The Kingdom Scam,” there are many departments and officials – current and former – who will be required to provide testimony at the many civil suits now filed or to be filed.

A truly independent state auditor would conduct its own investigation and, if he found that the material obtained was going to be compromised by the AG’s office, turn such material over to the federal authorities, who, by the way, uncovered the scandal in the first place. 

The truth of the matter is that no state agency, the AG’s office, the state auditor, or the Legislature, should be involved. An independent commission should be established whose members and lead investigator are appointed by the Vermont Supreme Court. 

Not only has Vermont seen one of the greatest frauds of all time, any inquiry has been compromised by politicians who have too much to lose from any disclosure that will come from an independent investigation. 

This conclusion has been borne out by the facts that the investigation by the AG’s office has taken so long, records have been denied to the media, and individuals personally involved have been told to stay silent. 

The Northeast Kingdom EB-5 scandal, once a massive localized event, has now turned into a statewide coverup conspiracy.

https://vtdigger.org/2019/09/30/don-keelan-getting-to-the-bottom-of-eb-5/

Mentions

• Vermont EB5 Regional Center

Litigation Cases

• United States of America vs Ariel Quiros & Bill Stenger
• Michael I. Goldberg vs Ariel Quiros
• MICHAEL I. GOLDBERG vs The AM Wealth Management Group of Raymond James & Ariel Quiros & Joel Burstein
• JAMES B. SHAW, JOHANNES EIJMBERTS, and LORNE MORRIS Individually and On Behalf of All Others Similarly Situated, vs The AM Wealth Management Group of Raymond James & Bill Stenger & Joel Burstein & Ariel Quiros
• ALEXANDRE DACCACHE, on behalf of himself and all others similarly situated vs Ariel Quiros & Bill Stenger & The AM Wealth Management Group of Raymond James & Joel Burstein
• State of Vermont vs Bill Stenger & Ariel Quiros
• UNITED STATES SECURITIES AND EXCHANGE COMMISSION vs Ariel Quiros & Bill Stenger

States

• Vermont