Donors With EB-5 Ties Gave To Leahy As Probe Ramped Up

A week after federal regulators began questioning a developer about an alleged fraud scheme at Jay Peak Resort, a man who served as counsel for the resort made his first-ever donation to a federal officeholder: $5,000 to Sen. Patrick Leahy of Vermont.

Charles Leamy made separate contributions of $2,600 and $2,400 on May 7, 2014, according to the Leahy campaign. Both were for the “Leahy for U.S. Senator Committee” and were recorded with the Federal Election Commission on May 21, 2014.

The donations represent the only money Leamy has given a federal officeholder. They are part of a cluster of contributions from entities and individuals with interests in the EB-5 investor program who gave to Leahy at a time when officials and angry investors were beginning to turn up the heat on the developers of Jay Peak.

Leahy had long been a booster for economic development in the Northeast Kingdom in general. The Jay Peak developers’ promises of job creation using the EB-5 visa program for foreign investors were of particular interest to the Vermont senator.

At a college funding event in Burlington on Monday, Leahy was taking selfies with students as reporters tried to ask him questions. VTDigger asked if he knew Leamy.

“No,” Leahy responded.

As VTDigger explained that Leamy worked at one time as counsel for Jay Peak, Leahy began walking away and replied, “I may have met him, but it doesn’t ring a bell.”

Leahy later reiterated that he didn’t know Leamy and wasn’t aware the Jay Peak attorney had made a donation to his campaign until after his staff looked him up.

“I asked if I got a donation and apparently I did, $5,000 or so,” Leahy said in an interview Wednesday. “I wouldn’t be surprised if this had to do with an immigration issue.” The senator said he was pushing for passage of reforms to the EB-5 program at that time. The provision failed in the House, and Leahy this year is again hoping to mandate greater scrutiny of developers using immigrant investor funds.

Sen. Patrick Leahy.

Leamy is a former attorney for Jay Peak Resort, according to public documents, and worked closely with Bill Stenger and Ariel Quiros, the developers who have been accused by state and federal regulators of misusing $200 million from immigrant investors in their Kingdom projects.

Leamy received a law degree in 1992 from Loyola University in New Orleans and worked as an associate attorney with the firm Norton Rose Fulbright in Montreal from 2007 to February 2013, according to his LinkedIn profile. In Facebook posts last year, he described himself as in-house counsel for Jay Peak Resort.

Leamy is listed as a defendant, along with several others, including Stenger, Quiros and the state Department of Financial Regulation, in a separate lawsuit filed in Vermont by two Chinese citizens who allege they were defrauded in the Q Burke resort project.

The brother and sister accuse Leamy of charging them a total of $20,000 to retain him as their immigration attorney after he allegedly pitched them an investment proposal in Q Burke in December. Leamy, in a court filing, has denied he had a conflict of interest or that he worked for the resort developers at that time.

Charles Leamy

Neither Leamy nor his attorney could be reached for comment for this story.

In the interview Wednesday, Leahy, a Democrat who is Vermont’s longtime senior senator, said he would give the donations from Leamy to charity if the court finds that the lawyer did “something inappropriate.” The defendants in the civil suit are asking for a stay in the proceedings until after the cases brought by the Securities and Exchange Commission and the state are resolved, which could be several years from now.

“I’ll tell you what I’ll do,” Leahy said. “I don’t know what might come of this court case, so I’m not going to interject myself on either side, but I’m going to go ahead and tell my committee to take his $5,000, set aside and when the court case is done if it looks like he was involved in something inappropriate, we’ll just give the $5,000 to the Northeast Kingdom Fund. That’s what I’ve done with the money Bill Stenger has given me.”

In addition to the contribution from Leamy, Leahy received $5,575 from Stenger and his wife between 1998 and 2009. The Vermont Democratic Party received $48,000 from Quiros and related entities. Gov. Peter Shumlin has received $23,000 in donations from Quiros, Stenger and related entities and people.

Leahy said he was not aware when he received the donations from Leamy that the SEC was investigating Stenger and Quiros.

“I don’t have any way of knowing what the SEC is doing, nor do I want to,” Leahy said. “They’re an independent group, so I didn’t know.”

Federal regulators asked Quiros to fill out a questionnaire April 30, 2014. Stenger was contacted with a similar request on May 12 that year and was deposed by the SEC for six hours May 21. Quiros was questioned May 22.

Also in May 2014, the state began receiving complaints from investors in the Tram Haus Lodge, one of six projects at Jay Peak that the SEC later charged were part of an elaborate Ponzi-like scheme perpetrated by Quiros and Stenger. Tram Haus investors told Vermont EB-5 Regional Center officials overseeing the immigrant investor program that the developers had seized their hotel and converted their ownership stakes into IOUs. The state didn’t act on their complaints.

At about the same time, the AnC Bio Korea headquarters was sold at auction by an arm of the Korean government. When regional center officials found out about the forced sale, they began raising questions about the finances of a related biomedical project the developers had proposed in Newport.

Leamy’s gift to the senator’s campaign on May 7, 2014, was part of a grouping of eight contributions from various people and entities. Those donors all have interests in EB-5 immigration issues, according to data from opensecrets.org and information from websites about the individual lobbying groups.

Jay Tilton, the communications manager for the Vermont senator’s campaign, said there was a fundraiser in early May 2014 and all of the contributions from that event were reported to Leahy’s campaign. He would not disclose the participants or location of the fundraiser.

The Federal Election Commission website shows donations having been recorded May 21, 2014, from the following people and entities in addition to Leamy:

• Patrick Hogan, the CEO of CMB EB-5 Regional Centers, who gave $5,200. CMB operates EB-5 centers in California and throughout the Midwest and South.
• The American Council of Engineering Companies PAC, which gave Leahy $2,000.
• The U.S. Transportation, Energy & Alliance PAC, which donated $1,000.
• Lincoln Stone, a California-based attorney who gave $1,000. In total, Stone has donated $1,700.
• Edward Pagano, former Leahy chief of staff and White House liaison for the Senate, who gave Leahy $250. In total, Pagano has donated $5,400 to Leahy. He began working for the lobbying firm Akin Gump Strauss Hauer and Feld in March 2014.
• The Akin Gump PAC, which gave $1,000 to Leahy on May 21, 2014. Akin Gump has contributed to Leahy’s Green Mountain PAC and has given $15,350 to Leahy this election cycle, according to the Center for Responsive Politics.
• Oracle PAC, which donated $2,500 on May 21, 2014, and $7,500 this election cycle.

Leahy has a $2 million campaign war chest and is running for re-election against Scott Milne, a Republican from Pomfret who runs Milne Travel.

Milne nearly beat Shumlin in the 2014 gubernatorial election. In his run against Leahy, he has criticized the incumbent for not releasing emails between his office and the Jay Peak developers.

Leahy has had many ties to Stenger. Leahy invited him to testify about Jay Peak in the Senate, and the Vermont senator signed a letter of support for the AnC Bio Vermont biomedical facility — a project the SEC later deemed “nearly a complete fraud.” The two participated in a trade mission to Ireland, and Leahy celebrated his 50th wedding anniversary at Jay Peak Resort. In 2014, Leahy helped promote Vermont EB-5 projects, including Jay Peak, to investors while on a trip to China.

Leahy has said that if the allegations against Stenger prove to be true he would feel “betrayed.”

https://vtdigger.org/2016/09/22/donors-eb-5-ties-gave-leahy-probe-ramped/

Mentions

• Vermont EB5 Regional Center
• Jay Peak - AnC Bio Vermont
• Jay Peak - Q Burke Mountain Resort, Hotel and Conference Center L.P.
• Jay Peak Resort - Tram Haus Lodge
• UNITED STATES SECURITIES AND EXCHANGE COMMISSION
• CMB Regional Centers
• Ariel Quiros
• Bill Stenger
• Patrick Leahy
• Peter Shumlin
• Patrick Hogan
• Lincoln Stone

Litigation Cases

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

States

• Vermont