The beauty of the EB-5 Immigrant Investor Program, Jay Peak co-owner Bill Stenger told SKI Magazine last year, was that it provided him with “patient capital,” the kind he and partner Ariel Quiros weren’t required to pay back on a set timeline as they went about developing Jay and Q Burke resorts in Vermont.
Their wealthy foreign investors did get one immediate return: U.S. visas, and a path to U.S. citizenship, for themselves and their families. And Vermont workers, in specially designated low-employment zones, got jobs. New jobs were a key public-relations point to garner public support for the massive redevelopment vision of Stenger and Quiros in the struggling economy of the region.
But today the federal government announced "fraud charges and an asset freeze" against them.
“In Ponzi-like fashion,” the SEC said, “money from investors in later projects was misappropriated to fund deficits in earlier projects. More than $200 million was allegedly used for other-than-stated purposes, including $50 million spent on Quiros’s personal expenses and in other ways never disclosed to investors.”
According to a report by WCAX news in Burington, Stenger and Quiros have been locked out and operations have been turned over to a third party. Vermont Gov. Peter Shumlin scheduled a press conference for later today, in which more details will likely be disclosed.
The EB-5 program has become an especially hot issue during the current election cycle, as it involves local jobs, citizenship for rich foreigners and millions of dollars in investments poured into regional economies
Details of the charges are in the official SEC complaint: https://www.sec.gov/litigation/complaints/2016/comp-pr2016-69.pdf