Supreme Court allows investors to sue state over Jay Peak
The Vermont Supreme Court ruled Friday to allow a group of foreign investors to seek negligence and breach of contract claims against the state for allegedly failing to provide sufficient oversight of projects at the Jay Peak ski resort that authorities say were fraudulent.
The Agency of Commerce and Community Development induced "plaintiffs to invest in the Jay Peak Projects by promising to provide 'extra safeguard of state oversight,'" the court wrote in its decision. The agency "had a duty to provide that promised oversight," but allegedly failed to do so, increasing the risk of harm to the investors, the court wrote.
Former Jay Peak owner Ariel Quiros and former president William Stenger were accused by federal regulators in 2016 of misusing more than $200 million raised from foreign investors through the EB-5 visa program for developments at or near the resort. They have reached settlements with the Securities and Exchange Commission and the state and pleaded not guilty to federal charges over a failed plan to build a biotechnology plant.
The investors in the lawsuit alleged that the state's failure to provide oversight led them to "turn over their life savings to the fraud at Jay Peak Projects" and caused them to be "displace(d) from their home countries by false promises of permanent residency in the United States," the court said. It was referring to the EB-5 visa program that helps foreigners obtain permanent residency by investing in job-creating developments in the U.S.
The U.S. Citizenship and Immigration Services designated the Vermont Commerce agency as a regional center associated with the program in 1997 and it promoted itself as one that "took a more active role in administration, oversight, auditing and consultation," the court wrote.
The court on Friday also allowed the investors' claims of gross negligence against two former executive directors of the regional center. But it affirmed the lower court's dismissal of the investors' other claims including breach of fiduciary duty. Emails were sent to state commerce secretary and the commissioner of the Department of Financial Regulation late Friday afternoon.
- 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
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