Jay Peak bombshell

[tnt1234]

How was the fraud discovered?

 

[thetrailboss]

How was the fraud discovered?

Enough investors complained to the SEC and VT that the Vermont regulators had to investigate.


Sent from my iPhone using AlpineZone

 

[thetrailboss]

Very good read from JJ Toland about the day Jay and Burke were seized:

http://saminfo.com/current-issue/item/171-a-challenge-to-the-jay-way

 

[BenedictGomez]

You say this sarcastically but in actuality the Jay peak EB-5 investors who were scammed are getting their money back AND their lawyers paid! (i guess it was safe)

I'm not sure if you're saying this seriously or in jest.

On the off chance you're serious, successfully defrauding an incompetent government out of hundreds of millions of dollars so massively that politicians feel they need to "make good" on it to cover their azzes and political careers, as well as the fact that that same government opened itself up to untold millions of dollars in legal jeopardy, is really not my definition of a "safe" program.

Not to mention, FWIW, not all investors have been made whole (though I imagine they will be due to "azz covering" mode & legal threat).

 

[fbrissette]

I'm not sure if you're saying this seriously or in jest.

On the off chance you're serious, successfully defrauding an incompetent government out of hundreds of millions of dollars so massively that politicians feel they need to "make good" on it to cover their azzes and political careers, as well as the fact that that same government opened itself up to untold millions of dollars in legal jeopardy, is really not my definition of a "safe" program.

Not to mention, FWIW, not all investors have been made whole (though I imagine they will be due to "azz covering" mode & legal threat).

As far as I know, the AnCBio investors in Newport are the only ones getting all of their money back. But with no green cards since the project was never built. The tramhouse lodge investors may have had a special deal also.

All the other investors will receive some amount of money once the resort is sold. How much remains to be seen, but considering the money that disappeared, the fact that constructing management fees were ridiculously high, and that the asset values are likely worth less than construction costs, I doubt investors will get back a lot more than 30 cents on the dollar.

 

[mbedle]

As far as I know, the AnCBio investors in Newport are the only ones getting all of their money back. But with no green cards since the project was never built. The tramhouse lodge investors may have had a special deal also.

All the other investors will receive some amount of money once the resort is sold. How much remains to be seen, but considering the money that disappeared, the fact that constructing management fees were ridiculously high, and that the asset values are likely worth less than construction costs, I doubt investors will get back a lot more than 30 cents on the dollar.

I don't think I have read that the receiver plans to dissolve all of the limited partnerships and sell their assets free and clear. If they do that, I would assume that all of those investor will end up seeing Vermont and the Federal Government to recoup the reaming amounts. I actually don't think it would be legal to do that to the investors. I assumed that the new owners would be required to enter into new agreements with the investors honoring the original agreement's terms and conditions. I think it would be easier to find a buyer for a significantly lower priced resort only purchase, than one that is going to pay outright for the resort, plus all of the hotels, golf club, waterpark, etc (as you noted, are not worth near what the cost was to build them). The only other way that I see this happening is like the Tram House Lodge, they convert all of the LPs into loan (maybe secured loans) between the new owners and investors. That would be one hell of a loan for a company to take on.

 

[mbedle]

I'm not sure if you're saying this seriously or in jest.

On the off chance you're serious, successfully defrauding an incompetent government out of hundreds of millions of dollars so massively that politicians feel they need to "make good" on it to cover their azzes and political careers, as well as the fact that that same government opened itself up to untold millions of dollars in legal jeopardy, is really not my definition of a "safe" program.

Not to mention, FWIW, not all investors have been made whole (though I imagine they will be due to "azz covering" mode & legal threat).

When did Quiros defraud the government out of 100 or millions of dollars?

 

[BenedictGomez]

When did Quiros defraud the government out of 100 or millions of dollars?

Huh?

 

[luvinjaycloud]

I'm not sure if you're saying this seriously or in jest.

On the off chance you're serious, successfully defrauding an incompetent government out of hundreds of millions of dollars so massively that politicians feel they need to "make good" on it to cover their azzes and political careers, as well as the fact that that same government opened itself up to untold millions of dollars in legal jeopardy, is really not my definition of a "safe" program.

Not to mention, FWIW, not all investors have been made whole (though I imagine they will be due to "azz covering" mode & legal threat).

Oh there was a lot of "jest" in my reply , just like there was a lot of "azz covering" in yours..haha

My general point is these Jay Peak EB-5 investors will have done very well in a situation that completely blew up on them. Maybe some won't get their green cards, which this was what the program is all about, but those that won't get them, are getting whole. In Madoff's ponzi scheme investors got less than half of their original investments plus forfeited all gains. Thats the way these things usually end up.
I think the remaining investors, Phases 2-5, will be in much better shape than they would have if this had been a traditional real world secured note obligation.

What you were right about from the beginning is that the EB-5 structured program doesn't really work in the long run for a lot of reasons. That can be a whole other thread on its own.

 

[yeggous]

FYI the pricing of the upcoming EICSL trip to Jay Peak has been announced. It includes a free season pass for participants. I'll keep that linked thread up to date with information including registration.

 

[mbedle]

Huh?

Sorry for the miss quote - your wrote "On the off chance you're serious, successfully defrauding an incompetent government out of hundreds of millions of dollars so massively that..."

I was just asking where that amount came from. I was only aware of him defrauding the investors, which I thought was around 50 million.

 

[BenedictGomez]

It includes a free season pass for participants. I'll keep that linked thread up to date with information including registration.

That is such an almost unbelievably good deal that I had to take a double-take at it.

Were I living in Vermont again, or somewhat local, I'd be all over that.

I was just asking where that amount came from. I was only aware of him defrauding the investors, which I thought was around 50 million.

The investors only became monetarily defrauded because it was the government that was literally defrauded, but the sum of misappropriated funds (which I don't think has ever been 100% categorized) is much larger than $50M and closer to $200M.

 

[mbedle]

That is such an almost unbelievably good deal that I had to take a double-take at it.

Were I living in Vermont again, or somewhat local, I'd be all over that.



The investors only became monetarily defrauded because it was the government that was literally defrauded, but the sum of misappropriated funds (which I don't think has ever been 100% categorized) is much larger than $50M and closer to $200M.

Okay - I was taking defrauding as defined by the deliberate stealing of money from an entity. I understand you point that he deceived the government and the investors for the 200 million in misappropriated funds...

 

[yeggous]

That is such an almost unbelievably good deal that I had to take a double-take at it.

Were I living in Vermont again, or somewhat local, I'd be all over that.

We've had this deal going for several years. I've tried to advertise it every year. I've gone a few times myself.

 

[thetrailboss]

Gee, I wonder why they are so quick to move away from that awesomely run State Government EB-5 Center?

https://vtdigger.org/2017/09/10/mou..._dc3c5486db-2faa3e0fd6-405558657#.WbbjDsiGO70

 

[BenedictGomez]

Gee, I wonder why they are so quick to move away from that awesomely run State Government EB-5 Center?

That's a solid blow to State of Vermont's recent desperate bid to not release its' claws from that never-ending cash pile & source of political job patronage.

 

[mbedle]

I love the fact that Peak's has Raymond running their EB-5 projects...

 

[thetrailboss]

Passholders are about to get a gift.....

 

[Jcb890]

Stickers and a hat?

 

[dlague]