Jay Peak bombshell

jimmywilson69 said:

While not as vocal as you BG I too think the state was in on it. They could not have known on at least some level that this scam was going down.

I also agree with kbroderick as I think Stenger the ever positive guy didn't realize until it was too late that he was a major player in a scam that was going to come crashing down at some point. I could be totally wrong but hope I'm not. My guess is Bill was just hoping at some point this thing would get off the ground in some capacity to save face and it didn't.

Waiting for sentencing where hopefully more details emerge.

In the meantime Jay Peak, which was Bill's true love, is left with a lot of nice amenities yet no one wants to buy it. Which basically proves the whole scam as I'm guessing the traffic doesn't support all of those shiny toys they have

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CityPlace Redevelopment Project | City of Burlington, Vermont

www.burlingtonvt.gov

thetrailboss said:

Agreed that the damage to Vermont's credibility is pretty deep. If anything it will hurt the very people that the whole EB-5 program was meant to help. But those people have very little political capital so nothing changes.

That all said, a lukewarm Democratic Governor almost lost re-election and then opted to retire rather than run again, so that shows some of the impact. But the career state officials who were involved in this mess (namely Moulton-Powden and Brent Raymond to name two) simply got on the merry-go-round and found new jobs--Moulton-Powden ending up as President of VTC (a job that she is not at all qualified to handle). And somehow Shumlin got a gig teaching at Harvard. There needs to be a reckoning here.

As to Leahy, I am pretty sure that he and Stenger are actually related by marriage (and both are related to the late Tony Pomerleau by marriage IIRC). So that is interesting. As to Bill, we all hate to see what happened to him, but again he cannot have been "that sophisticated" of a business person and not known or at least suspected what was going on. If anything he may have been in denial until it was too late.

You all should closely watch what is going on with the "CityPlace Burlington" project that is eerily similar to what happened with Newport.

CityPlace Redevelopment Project | City of Burlington, Vermont

www.burlingtonvt.gov

How? A Florida Real Estate Developer pitched a huge real estate project for Downtown Burlington convinces City Hall to cut him and his buddies a bunch of breaks. He purchases several buildings, demos them, then runs out of money and now BTV has a giant hole in the middle of it. We've seen this movie before. All I can say is stay tuned.

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AdironRider said:

Never attribute to malice that which is adequately explained by stupidity. No cash payouts, no windfall, I am just struggling to see how Stenger would go along with the scam without a kickback of some sort.

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thetrailboss said:

Well, well.....

Lawsuit alleges Shumlin administration perpetuated EB-5 fraud - VTDigger

State regulators and the Vermont Attorney General's Office hid the fraud from investors and the public for 13 months before the SEC shut down the Jay Peak projects, according to a suit filed in federal court this week.

vtdigger.org

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Smellytele said:

Those vtdigger articles are thorough but 3/4 of the way through ADD kicks in and I just can’t finish.

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thetrailboss said:

Lawsuit alleges Shumlin administration perpetuated EB-5 fraud - VTDigger

State regulators and the Vermont Attorney General's Office hid the fraud from investors and the public for 13 months before the SEC shut down the Jay Peak projects, according to a suit filed in federal court this week.

vtdigger.org

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BenedictGomez said:

As I predicted years ago, State of Vermont had to be in on it. And as always, once again, I'd really like to see them fully investigate the EB-5 center's brass, which has never happened.

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ss20 said:

I love ya BG but I'm nearly certain "As I predicted years ago..." is gonna be on your tombstone.

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JoeB-Z said:

Did anyone pick this up about receiver Goldberg? https://vtdigger.org/2021/07/13/jay...key-role-in-deadly-florida-building-collapse/
I have been impressed by Goldberg but there is still a lot to be done in VT.

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BenedictGomez said:

What the hades, is this guy like the legal version of The Wolf in Pulp Fiction?

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On New Year’s Day in 2015, Shumlin and Quiros met privately at the governor’s East Montpelier home, according to information from FBI records that has not previously been disclosed. Quiros later told investigators that he and Shumlin discussed “all of the problems at Jay Peak” that day, including cost overruns and state oversight. Shumlin also sought information about the apparent arrest in China of a Vermont EB-5 Regional Center employee, Quiros told the feds.

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Most of the records were included as exhibits to a motion filed in federal court Wednesday by defense attorneys for former Jay Peak President and CEO Bill Stenger. The FBI records recounting the interviews were filed under seal but quoted from in the motion.

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According to the filing, Shumlin and state officials knew from an internal investigation in March 2015 — a year before federal regulators stepped in — that Quiros had stolen tens of millions of dollars from investors in six projects at Jay Peak, a ski area on the Canadian border. A few months later, state regulators had documented how Quiros used the money to buy a Porsche, a Miami restaurant and two luxury condos.

As VTDigger reported at the time, state officials, at the direction of the governor, reinstated the two final projects in an eight-phase development — a biomedical center in Newport and a hotel at Burke Mountain Resort, another ski area in the heart of the Northeast Kingdom.

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The documents show that state officials concealed the results of an internal probe of the Northeast Kingdom fraud in 2015. And, in their motion, Stenger’s lawyers make another bombshell claim: that state regulators and commerce officials made false statements to the public, investors, the U.S. Securities and Exchange Commission, and the U.S Citizenship and Immigration Services.

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The new motion filed by Stenger’s attorneys, David Williams and Brooks McArthur, includes 45 supporting records — mostly emails, in addition to the records from the FBI and other documents — showing that, as the lawyers put it, Shumlin and state officials “knowingly facilitated and participated” in defrauding investors in the Burke hotel.

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Williams and McArthur assert that the state Department of Financial Regulation approved investor offering documents for Burke that made no mention of the fraud — despite knowing it was taking place. Unsuspecting foreigners continued to invest in the hotel in exchange for green cards. State officials wrested control of the project from Quiros, took money from defrauded investors and made payments to the general contractor for the Burke project.

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In a statement responding to the motion, Assistant Attorney General David Groff said, “Let us be clear. We support the release of hundreds of thousands of pages of unredacted documents, which is the vast majority.”

“However, some of these documents should remain sealed because privileges apply to them, including the attorney-client privilege and the work product doctrine,” Groff said.

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Shumlin did not respond to a request for comment Wednesday. The U.S. Attorney’s Office for the District of Vermont is not taking a position on the release of records.

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By the time Quiros showed up at Shumlin’s East Montpelier home, the governor had a political problem on his hands. Local contractors working on the Burke Mountain Resort project were owed thousands of dollars in 2014 and walked off the job before winter. Shumlin was getting calls from builders and state representatives.

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In August 2014 the music stopped. State officials administering the foreign investor visa program suspected the developers of fraud and shut off the EB-5 “spigot” for the Burke project and a proposed biomedical facility in Newport, according to Williams and McArthur.

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After the 2015 New Year’s Day meeting, Quiros apparently succeeded in regaining the governor’s ear. He and Kelly, his top adviser, complained to Shumlin in emails about VTDigger’s reporting on financial improprieties at Jay Peak. Shumlin offered to issue a joint press release alleging inaccuracies in the stories. The governor also expressed concern that Susan Donegan, then-commissioner of the Department of Financial Regulation, and Kelly were not getting along.

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Shumlin, Miller, Moulton and London met with Quiros and Stenger to talk about how to resolve the hold on the Burke and AnCBio projects on March 27, 2015. The goal of the meeting, as Miller put it in an interview with the FBI, was to “unstick things.”

Afterward, Quiros “ducked into a private room” with Shumlin, according to an FBI interview with Moulton that is cited by defense attorneys but was filed under seal. Quiros had brought a manila folder to the meeting, and Moulton “later learned that the file contained pictures Quiros wanted to show to the Governor.” The records do not describe the pictures.

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Donegan met with Shumlin privately and disagreed with him about how to proceed. Afterward, the governor told securities regulators to lift the freeze on Burke and find a way to finish the hotel, documents show. A month later, Donegan tried to stop the projects by describing the securities violations at Jay Peak in a meeting with Miller and London. Donegan suggested that the state pursue receivership, asset seizure or a court injunction.

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