According the Addison County Independent, the owners of Jay Peak ski resort, VT and Burke ski resort, VT have been accused with fraud by the Securities and Exchange Commission (SEC) and the state of Vermont.

The SEC has filed fraud charges against Ariel Quiros and Bill Stenger and froze their assets.

Investigators are alleging that Quiros and Stenger misused hundreds of millions of dollars raised via the EB-5 investor program.

Quiros and Stenger raised $350 million via EB-5 investment to build ski resort facilities and a biomedical research facility.  The SEC investigators state that over $200 million of that money was not used as investors were informed it would be.  The SEC says that Quiros spent $50 million of that investment money on personal expenses.

Basically, these two guys allegedly stole hundreds of millions of dollars from the EB-5 investment projects via a Ponzi Scheme and left the projects high and dry.

“The alleged fraud ran the gamut from false statements to deceptive financial transactions to outright theft.  As alleged in our complaint, the defendants diverted millions of EB-5 investor dollars to their own pockets, leaving little money for construction of the research facility investors were told would be built and thereby putting the investors’ funds and their immigration petitions in jeopardy.” – Andrew Ceresney, Director of the SEC’s Division of Enforcement

EB-5 investor program =

• a program for foreigners to receive green cards in the USA if they invest $500,000 or more in depressed economies of the USA and maintain 10 or more permanent full-time jobs via that investment.
• Learn more here:  Vermont’s EB-5 investor program

In 2008, Stenger announced a major $250 million expansion at Jay Peak to be completed using EB-5 investment funds.  Stenger even traveled to Asia to secure investors.

In 2012, Stenger and partners announced the large Northeast Kingdom Development Initiative.  The initiative outlined a $500 million EB-5 investment including 7 projects across 4 towns in Vermont.

Since the project was started there have been suspicions.  Especially since many of the projects are incomplete including a makeover of downtown Newport and the newly constructed Q Burke hotel.  The Q Burke hotel is actually complete but hasn’t yet opened due to the contractor who built it and has the permits having not yet been paid.

STATEMENT from JAY PEAK TODAY:

“Sorry we took a few extra minutes reaching out folks. As you may have heard, we here at Jay Peak will be working with Leisure Hotels and Resorts (LHR) to continue managing Jay Peak same as it ever was. Current ownership is working with state and federal officials surrounding their ongoing investigation relative to the EB5 Foreign Investment Program. That process is distinct and not connected to the day to day operations of the mountain, indoor waterpark, golf course, lodging or any of our amenities that continue to be available on a daily basis here. Our longtime CMO Steve Wright has recently been named General Manager and he, along with LHR will be responsible for the day to day operations of the resort.