In breaking news today, the Federal government announced that it had indicted Jay Peak Resort in Vermont on fraud charges, identifying seven specific projects linked to the resort. The criminal investigation is in progress now.
Here’s a synopsis of the Security and Exchange Commission’s statement released today: “The SEC alleges that Ariel Quiros of Miami, William Stenger of Newport, Vt., and their companies made false statements and omitted key information while raising more than $350 million from investors to construct ski resort facilities and a biomedical research facility in Vermont. Investors were told they were investing in one of several projects connected to Jay Peak Inc., a ski resort operated by Quiros and Stenger, and their money would only be used to finance that specific project. Instead, in Ponzi-like fashion, 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.”
Huge news, and huge trouble for one of the East Coast’s biggest winter resorts in a state at the heart of Eastern ski culture.
According to reports, the SEC says Stenger, Jay Peak’s president, and Florida-based owner Quiros, diverted some 200 million of “EB-5immigrant investor funds. And didn’t come close to using those funds the right way. Apparently Quiros’ used part of that fund to pay his income taxes and for a luxury condo in Trump Place. The EB5 program is a way for foreign investors to become permanent U.S. residents if they invest at least $500,000 for a project.
The SEC did little sugarcoating regarding the the seriousness of the crimes, calling the investigation an “emergency action.” “The alleged fraud ran the gamut from false statements to deceptive financial transactions to outright theft,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement.
