Jay Peak bombshell

[thetrailboss]

More thoughts since, in an AZ first, I wrote too much and have to break it down into two messages! :lol:

Donegan and Pieciak discovered the full extent of the scheme in the summer of 2015, Williams and Kelly wrote. The regulators produced a “spaghetti map” of the thousands of bank transactions Quiros used to cover up the fraud. They also drafted a lawsuit against the developers in the summer of 2015 with “an army of attorneys” from the state Attorney General’s Office. In a slideshow for top officials presented to former Attorney General Bill Sorrell and Shumlin in August and September, respectively, Pieciak said “the immigration status of [every Burke and AnC Bio] investor would likely be negated.”

The state regulators, who were “charged with insuring compliance with state and federal securities law,” chose not to disclose that information in offering documents provided to investors.

Ultimately, in response to pressure from the governor and requests from the Securities and Exchange Commission, Donegan and Pieciak continued investigating the fraud and at the same time collected an additional $43 million from 86 investors in the Burke hotel.

I don't even know where to start with this one....just unreal.

Included in the filing by Williams and McArthur are two affidavits authored by Pieciak. One denies there was any misuse of funds at Burke. The other lists amounts from other investor projects that were funneled into the hotel development. The affidavit that omitted the comingling of funds was submitted in the state’s lawsuit against Quiros and Stenger in April 2016 and was later used by the state in response to a request for information from U.S. Citizenship and Immigration Services.

Yeah having two different signed affidavits does not look good at all. Especially when one used the affidavit that had LESS information in it.

I'd say that the State is hosed. I hope they resolve this in order to get this behind them. It just shows that Shumlin will go down as one of the worst governors in recent history (if not the worst) who opted to overlook the law in order to save his own political ass, burning the State's credibility for a very long time.

 

[thetrailboss]

Court records point to state cover-up in EB-5 fraud at Burke Mountain Resort - VTDigger

The Shumlin administration misled investors and federal agencies in a push to finish the Burke hotel, according to a new filing in federal court.

vtdigger.org

More on the Burke side of things, but sounds like Shummy might go down in this.

I think that VTD buried the lead--Q had dirty incriminating pics of Shummy! Can we say, blackmail?

"Peter, I have these pictures of you with some of my Korean girls. It would be a shame if these were to get out now wouldn't it?"

 

[Zand]

Going back to the first pages of the thread is fun...

Gotta love this quote from here: http://www.eb5fullservice.com/blog/2232/
James Candido, the principal overseer of State of Vermont EB-5 projects, stated to me that he inspects Jay Peak’s financial records at least four times per year and that he has not seen any financial irregularities or problems in Jay Peak’s finances.

Especially this link!

 

[thetrailboss]

Going back to the first pages of the thread is fun...

Especially this link!

Yeah, that link takes me to some nonsense spam page.

 

[Zand]

Yeah, that link takes me to some nonsense spam page.

I think it got taken down shortly after it was posted here. But the quotes taken from it are funny in hindsight.

 

[thetrailboss]

I think it got taken down shortly after it was posted here. But the quotes taken from it are funny in hindsight.

Oh absolutely.

I think that before these latest revelations, we were all thinking that the State's "fraud" was Shumlin in 2012 making statements in the promo video that Vermont was special in the fact that it audited the EB-5 projects when in fact it did not. Now with these latest revelations it looks like the claims are far more specific and sinister. They are claiming that the real fraud occurred in 2015 when Shumlin and the State ALLOWED fundraising to resume knowing that the whole thing was a fraud and that they did so in order to perpetuate the fraud in order to get the Hotel built. That, in addition to Shumlin's 2012 statements, looks pretty bad.

 

[BenedictGomez]

vUrMoNts E-BeeFive ProGrAm is tEh MoHst SaFest BeeCuz iTs THe OnLy WoN GoverMeNt rUn!

 

[BenedictGomez]

As I stated many years ago, Brent Raymond had absolutely no financial background necessary for the accounting/audit/finance work required of that EB-5 program. I dont believe this was a bug, I think it was a feature.

When was he appointed? December 2011.

 

[BenedictGomez]

we now have a (D) administration in charge on the federal level and they don't want (D) team members to look bad.

I'm old enough to remember when Senator Patrick Leahy was Mr. EB-5, taking credit for even the slightest incremental EB-5 announcement. Now he's like, "EB-5, what's that? Sounds familiar, but I dont know what that is".

 

[thetrailboss]

I'm old enough to remember when Senator Patrick Leahy was Mr. EB-5, taking credit for even the slightest incremental EB-5 announcement. Now he's like, "EB-5, what's that? Sounds familiar, but I dont know what that is".

He was the one I was thinking of in terms of political pressure. He seems to have disappeared from the scene on this matter. I'd say Shummy is the fall guy.

 

[JoeB-Z]

Numerous pictures of Grant and Franklin in that envelope?

 

[BenedictGomez]

Numerous pictures of Grant and Franklin in that envelope?

So long as we're speculating, some of the trips were in China, and prostitution is in-your-face everywhere out in the open in China.

 

[thetrailboss]

Numerous pictures of Grant and Franklin in that envelope?

Let's put it this way. Shumlin started out his term as Governor a married man to a wife of many years with two daughters in their late teens/early twenties. When he left, he had ditched the family and married a woman almost have his age (31 years vs. 59 years). What does that tell you?

 

[BenedictGomez]

What does that tell you?

He couldnt find a 24 year old.

 

[jimmck]

I think it got taken down shortly after it was posted here. But the quotes taken from it are funny in hindsight.

Blog

web.archive.org

The internet never forgets!

 

[thetrailboss]

Blog

web.archive.org

The internet never forgets!

Yep, that Bill Stenger guy had NO idea what was going on......

It was very clear during my stay at Jay Peak Resort that Bill Stenger is a very hands-on owner/operator. I spotted him before our first meeting darting into the kitchen of one of the Resort’s restaurants to solve a problem. While touring the facilities, he would address every worker by first name (he apparently interviews every new hire, from what a ski instructor told my wife), check operations, issue orders or suggestions, and even pause at one point to gather and throw out empty plastic cups that a bartender hadn’t yet cleared. It’s plain from conversations with the Resort’s staff that morale is high and that Mr. Stenger is held in high esteem. Worker attrition is not a problem.

And Jay was the 5% that were approved by the State to proceed. I can only imagine what the other 95% of those EB-5 projects were:

James Candido, the principal overseer of State of Vermont EB-5 projects, stated to me that he inspects Jay Peak’s financial records at least four times per year and that he has not seen any financial irregularities or problems in Jay Peak’s finances. He noted that Jay Peak Resort was selected as the first Vermont EB-5 project because of Bill Stenger’s “30 years of demonstrated business acumen.” He emphasized that the State of Vermont is particularly careful in overseeing Jay Peak projects because it is hoping to leverage Jay Peak Resort’s success with development and job creation into promoting additional EB-5 projects in Vermont, several of which are in development or already online. Candido noted that the State turns down or discourages 95% of Vermont businessmen pitching projects to the Vermont Regional Center.

Also note that the "Exit Plan" was pretty vague and should have raised flags--the investors were to get, at this juncture, a share of the real estate project that they created. Almost like a timeshare:

I’ve always been concerned about Jay Peak’s exit strategy. Loan-based EB-5 investments have a clear exit point when the loan is repaid by the borrower, whereupon the general partner returns investment principal to the immigrant investors. Equity-based investments don’t have the same fixed point for exit, but in virtually every project the general partner enters the project with the intention to sell the project equity in its entirety once the property becomes profitable and a market develops for resale. Jay Peak is different. The plan is for investors to sell fractional shares in the part of the resort that was developed with their money. Bill Stenger predicts that Phase I investors will be able to sell shares and secure return of their investment principal starting in September of this year.

 

[thetrailboss]

He couldnt find a 24 year old.

:lol:

 

[thetrailboss]

Speaking of failed plans, before Q there was Bobby Ginn and Lubert Alder at Burke. When he took over Burke he also looked west to Blue Sky Basin and a massive development in a small Colorado mining town named Minturn. He was going to clean up that Superfund site and also made a lot of big promises to the town. So, what ever happened to Minturn? Well, read on:

Minturn wrestles with the decade-old promises of a big-dream developer

Minturn weights changes to 2008 plan by Florida developer Bobby Ginn, who promised town $162 million in perks for annexation of 4,300 acres

coloradosun.com

 

[VTKilarney]

THe prosecutors say that Stenger was not the innocent pawn that he claims to be:

Prosecutors dispute Stenger was ‘duped,’ call it a tale of ‘greed, glory and desperation’ - VTDigger

Assistant U.S. Attorneys Nicole Cate and Paul Van de Graaf alleged in a court filing Tuesday that the former Jay Peak president and CEO was “not just a bystander to the fraud that occurred, but an integral part of the sweeping fraud scheme.”

vtdigger.org

 

[thetrailboss]

THe prosecutors say that Stenger was not the innocent pawn that he claims to be:

Prosecutors dispute Stenger was ‘duped,’ call it a tale of ‘greed, glory and desperation’ - VTDigger

Assistant U.S. Attorneys Nicole Cate and Paul Van de Graaf alleged in a court filing Tuesday that the former Jay Peak president and CEO was “not just a bystander to the fraud that occurred, but an integral part of the sweeping fraud scheme.”

vtdigger.org

"He could not fail,” the prosecutors wrote. “He became desperate to keep the projects going forward. Even when he knew he was in the wrong, he furthered the fraud, to keep his place on the high pedestal of public perception.”

[....]

“Throughout the life of the scheme, Stenger held himself out as a knowledgeable businessman in control of the EB-5 projects. He traded on the trust that people had in him,” the prosecutors wrote. “Even if he did not have answers to questions about the money, or about the AnC project, he had the power to demand them. When Stenger failed to seek or provide answers, it was because he knew the answer.”