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Quiros appeals order freezing assets

Quiros appeals order freezing assets

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

Miami businessman Ariel Quiros is appealing a judge’s order granting a preliminary injunction against him in which he is descrived as the architect of a massive investor fraud scheme in Vermont’s Northeast Kingdom.

The injunction froze his assets accumulated through investor funds, including Jay Peak and Burke Mountain ski resorts, and prevents him from dealing in securities.

James Bryan, a Florida representing Quiros, submitted a filing this week titled, “Notice of Appeal” regarding the injunction granted last month by Judge Darrin P. Gayles. The one-paragraph notice does not state the grounds for the appeal.

The appeal will be heard by the 11th U.S. Circuit Court of Appeals in Atlanta.

Gayles granted the injunction against Quiros in a case brought in April by the U.S. Securities and Exchange Commission.

The SEC alleges that Quiros and Bill Stenger, Jay Peak’s former CEO, mishandled $200 million of the $350 million they raised in federal EB-5 immigrant investor funds for series of development projects at the ski resorts and in the Northeast Kingdom city of Newport.

Gayles, in the strongly worded ruling, wrote that with “severe recklessness,” Quiros intentionally defrauded investors, enriched himself and misappropriated funds.

The judge added that the SEC wove “a compelling and well-documented account of one man’s use of his control over multiple entities to squander investor funds, enrich himself, and, ultimately, commit securities fraud.”

Christopher Martin, an attorney handling the case for the SEC, and Bryan, could not be reached Wednesday for comment.

The freezing of Quiros’ assets has left him scrambling to pay his attorney fees, which total about $2 million since filing of the SEC action against him in April. In October, Gayles only permitted Quiros to use $80,000 from the proceeds of a mortgage he took out on his luxury Setia condo in New York City to pay his mounting legal bills.

Earlier this month, Quiros filed a lawsuit against his insurance company, Ironshore Indemnity, a Minnesota corporation, contending under his policy they should cover the payment of his defense in the cases against him.

In a separate filing in a separate case, Bryan this week requested a stay of the litigation pending the resolution of the SEC legal action.

“The Court should stay this case and allow the SEC to pursue its action against Mr. Quiros,” Bryan wrote in the recent filing. “If the SEC case is unsuccessful, in part or whole, then the Receiver could revive his claims against Mr. Quiros.”

In the case, Michael Goldberg, the court-appointed receiver overseeing properties at the center at the center of the SEC investor fraud allegations, has sued Quiros, the brokerage firm Raymond James, and Joel Burstein. Burstein is Quiros’ former son-in-law who served as the branch manager of a Raymond James office in Coral Gables, Florida.

Goldberg’s lawsuit accuses the financial services company and Burstein of helping Quiros develop a scheme to commingle and “steal investors’ funds for his own use in breach of partnership agreements.”

Goldberg, in a filing last week, asked the judge to not delay the proceeding pending the outcome of the SEC case.

The judge has not yet ruled on the matter.


Source: https://vtdigger.org/2016/12/21/quiros-appeals-order-freezing-assets/

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