A federal judge has approved a process to search information from Ariel Quiros’ personal laptop to determine if he used it to conduct any business associated with investor fraud allegations leveled against him in development projects in northern Vermont.
Michael Goldberg, the court-appointed receiver overseeing properties at the center of the largest alleged fraud case in the state’s history, recently asked the judge hearing the federal case against Quiros to allow him to hire a “third-party” to “inspect” the laptop information.
A third-party review, according to the filing, would protect any privileged, or attorney-client material, that may be on the computer from being disclosed to the receiver, or the U.S. Securities and Exchange Commission, which leveled the investor fraud allegations.
Judge Darrin P. Gayles, who presides over the civil case in U.S. District Court in Miami, approved the request late last week.
Quiros, owner of Q Resorts, a holding company that includes Jay Peak, and William Stenger, his former business partner and past CEO and president of Jay Peak, are accused in federal and state lawsuits filed in April of running a “Ponzi-like” scheme.
The pair allegedly misused $200 million in investor funding through the federal EB-5 visa program. The money was raised to fund development projects in Vermont’s Northeast Kingdom, including hotels and a now-shelved proposal for a biomedical facility in Newport.
Quiros disputes the allegations against him. Stenger settled his case with the SEC by agreeing to cooperate with investigators, but the state lawsuit against him remains pending.
The recent motion from Goldberg regarding the laptop states that the receivership took control of Quiros’ business office on the fourth floor in a building at 111 NE 1st St. in Miami in April, as news broke of the SEC allegations against him.
As part of that process, the motion states, the receivership took possession of a laptop from that office, and with the help of a tech company, “imaged all the information” from the laptop.
“Shortly after the imaging process was completed, Mr. Quiros requested that the laptop be returned to him, claiming that it was his personal laptop,” according to the filing. “Based on that representation, and after confirming that an image had been taken of the laptop, the Receiver authorized the return of the laptop to Mr. Quiros.”
Later, the motion states, an attorney for Quiros told the receiver that the Miami businessman purchased the laptop with his “personal funds” and used it for communications with his attorneys.
“In other words, the representation was that Mr. Quiros did not use a ‘Jay Peak’ email address from the laptop or any other email address associated with the Receivership Entities,” the motion states.
In September, the SEC served the receiver with a request for documents, asking for all non-privileged emails, or other electronic communication to, from, or copying Stenger and Quiros.
The filing from Goldberg states that in reviewing documentation from other parties, he determined that Quiros sent many emails regarding Jay Peak matters from his personal email account.
And, according to the motion, no other laptop, desktops, or computers were taken from Quiros’ office.
“Therefore,” the motion states, “in order to fully comply with the Request from the SEC, and to otherwise fulfill his obligations under this Court’s Receivership Order, it is necessary to review all of the emails imaged from (Quiros’) laptop.”
The SEC and attorneys for Quiros agreed to the proposal of using a “third-party vendor” to conduct the search.
“After that review has been completed, the Receiver can allow the attorneys for Mr. Quiros to review the privileged universe to identify all documents that they submit should remain segregated,” the filing states. “This would provide safeguards to protect against the inadvertent disclosure of privileged items.”
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