Jay Peak’s receiver nears $6M in fees, expenses, for EB-5 cleanup

Jay Peak’s receiver nears $6M in fees, expenses, for EB-5 cleanup

EB-5 Visa, EB5 Visa, EB5 Investments

Michael Goldberg, the court-appointed receiver in the EB-5 fraud case, speaks at a Statehouse news conference in 2017. 

The Jay Peak receivership’s price tag for overseeing the resort and managing other properties in northern Vermont at the center of an EB-5 investor fraud scandal is approaching $6 million.

Michael Goldberg, appointed receiver in April 2016 when state and federal regulators leveled civil investor fraud lawsuits against Ariel Quiros, then Jay Peak’s owner, and Bill Stenger, the resort’s former CEO and president, has submitted his latest request for fees and expenses.

The filing by Goldberg came days after Quiros and Stenger, as well as Bill Kelly, a key adviser to Quiros, and Jong Weon (Alex) Choi, were all indicted last month by a federal grand jury in Vermont on criminal charges including fraud and making false statements to the government in connection with an EB-5 project.

The charges stem from a failed biomedical research facility, AnC Bio Vermont, proposed for Newport that authorities said was “nearly a complete fraud.”

Quiros, Stenger and Kelly have all pleaded not guilty to the charges against them. Choi, who operated AnC Bio Korea, remains “at large,” prosecutors say.

The fee request from Goldberg spans six months, from Sept. 1, 2018, to Feb. 28 of this year, and totals $695,605, according to the receiver’s latest fee request filed in federal court in Florida. That’s where the federal lawsuit against Quiros, a Miami businessman, was brought more than three years ago by the U.S. Securities and Exchange Commission.

Goldberg’s fee request still requires the approval of Judge Darrin Gayles, who is presiding over the case. Goldberg had previously submitted fee requests over the more than three years of his receivership totaling $5,047,454.

If the latest is granted, the receiver’s total fees and expenses so far will total $5,743,059 since Goldberg’s receivership appointment.

Goldberg could not be reached Wednesday for comment.

In the most recent filing, Goldberg wrote that he and his firm, Akerman LLP of Fort Lauderdale, Florida, as well as the other professionals working with him, have reduced their standard rates.

For example, he wrote, at Akerman, instead of the standard rates ranging from $550 to $750 an hour, all partners are billed out at $395 an hour. Also, associate and paralegal rates are capped at $260 an hour.

“These discounts equate to a $192,416.50 reduction in Akerman’s fees,” according to the receiver.

Over the six-month time period covered in the latest request, Goldberg and his firm billed for 1,099 hours and are seeking payment of $352,643, plus $40,763 for expenses, for a total of $393,406.

A breakdown of the fees and expenses for the other professionals assisting the receivership from Sept. 1, 2018, to Feb. 28, shows:

— Kapila Mukamal, an accounting firm based in Florida, seeks fees and expenses totaling $126,710.

Klasko Immigration Law Partners LLP, of Pennsylvania, which has worked for the receivership in assisting with EB-5 immigration matters, is seeking payment of $20,623.

— The law firm Levine Kellogg Lehman Schneider + Grossman LLP, of Miami, seeks fees and expenses totaling $154,865.

The money to pay the fees and expenses comes from legal settlements in the case and from the sale of Quiros’ assets.

According the civil lawsuits filed by the regulators three years ago, Quiros and Stenger misused $200 million of investor funds raised through the EB-5 program.

The investments were to pay for massive upgrades at Jay Peak and additional projects in other communities in northern Vermont, including the proposed biomedical facility in Newport.

Stenger and Quiros have since reached financial settlements in those civil actions, neither admitting or denying the allegations against them.



Litigation Cases


  • Vermont

Securities Disclaimer

This website is for informational purposes only and does not constitute an offer or solicitation to sell shares or securities. Any such offer or solicitation will be made only by means of an investment's confidential Offering Memorandum and in accordance with the terms of all applicable securities and other laws. This website does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. EB5Projects.com LLC and its affiliates expressly disclaim any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) reliance on any information contained in the website, (ii) any error, omission or inaccuracy in any such information or (iii) any action resulting therefrom.