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Investors press case ponzi email search

Investors press case ponzi email search

EB-5 Visa, EB5 Visa, EB-5 Investment

Jay Peak majority owner Ariel Quiros.

Attorneys for a group of investors who claim they were victims in the largest alleged fraud case in Vermont’s history aren’t relenting in a battle over the word “Ponzi.”

The class action lawsuit led by Brazilian investor Alexander Daccache has featured a flurry of motions over what information the former brokerage firm for Ariel Quiros, one of the developers at the center of the EB-5 investor fraud case, should be required to produce.

That includes a search of the firm’s computer files over several years for the word “Ponzi,” a term used by federal regulators in a separate lawsuit to describe the alleged actions of Quiros and his business partner William Stenger in Northeast Kingdom development projects.

The brokerage firm Raymond James argued late last month that the request to search through emails over a nearly 10-year span from about 20 employees would produce an overwhelming number containing the word “Ponzi,” most related to other cases in the news.

But in his motion last week, Thomas A. Tucker Ronzetti, an attorney representing the investors, wrote that Raymond James, referred to in court documents as RJ, made the request for the electronic search for the word “Ponzi” relevant in the case due to one of its own filings.

“In its motion to dismiss, RJ takes the position that: ‘To support aider and abetter liability against RJ, Plaintiffs must allege facts showing that RJ had actual knowledge that Quiros was operating a Ponzi scheme,’” the attorney wrote. “RJ has therefore placed the term ‘Ponzi’ directly at issue.”

Ronzetti added, “Any RJ documents relevant to RJ’s awareness that the Jay Peak fraud was, in fact, a Ponzi scheme must be produced.”

The lawsuit by Daccache and other investors was filed earlier this year against Jay Peak developers Quiros and Stenger as well as Joel Burstein, Quiros’ former son-in-law and a former branch manager for Raymond James.

It was filed about a month after separate state and federal lawsuits were leveled in April against Quiros and Stenger. Those lawsuits allege the two men misused $200 million raised through the EB-5 visa program for projects in northern Vermont, including hotels and condos.

The federal lawsuit, brought by the Securities and Exchange Commission, alleges Stenger and Quiros operated a “Ponzi-like” scheme to attract investors and fund projects. And, the lawsuit states, Quiros siphoned off some investor money for personal expenses, including the purchase of a $2 million condo in Trump Tower in New York City.

Quiros, a Miami businessman, is owner of Q Resorts, a holding company that includes Jay Peak. Stenger, a Newport resident, is former CEO and president of Jay Peak.

Daccache, the lead plaintiff in the case, invested $500,000 in 2010 via the EB-5 visa program in the Penthouse Suites project, which is part of the Hotel Jay.

EB-5 investors put up at least $500,000, plus an administrative fee, in a qualified project. If that investment creates at least 10 jobs, the investor becomes eligible for permanent U.S. residency.

The dispute over the term “Ponzi” highlights an increasing tension between the parties displayed in the sharply worded filings.

In a recent motion, an attorney for Raymond James wrote that some of the requests for documents by the investors’ lawyers amounted to a “snipe hunt.”

“Only when counsel confirmed that there were no snipe to be found could she state with certainty — there are no such documents and none are being withheld,” the Raymond James attorney wrote.

In a response filed last week, Ronzetti wrote, “Histrionics aside, Plaintiffs’ motion seeks to compel the straightforward application of standard discovery rules.”


Source: https://vtdigger.org/2016/11/14/investors-press-case-ponzi-email-search/

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