Stenger and Quiros Ousted from Management of Jay Peak and Burke

[River19]

To perpetuate a fraud that large for so long typically implies that very few people are involved. However, I cannot believe that Stenger and Q were the only crooks in this thing. I would be surprised if criminal charges were only levied against those two. I can think of a few (state employees and JayPeak/Burke exec.) who must have been facilitators, whether or not they personally gained financially from this mess.

Normally I would agree with this 100%....however when I read through the SEC doc there were mentions of at least a couple other shell companies with principals other than Q and Stenger I thought....I could be wrong but North East Contract Services LLC is run by William Kelly....COO of Jay.

Also, Jr. he had to know something.

RJ broker ex SIL.....oblivious? Probably.

 

[mbedle]

So I am going to show my ignorance here with these questions. Does knowing that someone is doing something illegal and not telling someone, a crime? Even if Ary, Bill's kids or other staff members were aware of this, does that open the possibility to civil or criminal charges? Is it up to these people to understand the rules and regulations governing the EB-5 program to actually be able to determine something is illegal?

On an other note, I was always under the impression that Steiger was part owner in the Jay Peak Resort. After reading through everything it appears that he never was an owner.

 

[Harvey]

Does knowing that someone is doing something illegal and not telling someone, a crime? Even if Ary, Bill's kids or other staff members were aware of this, does that open the possibility to civil or criminal charges?

I have always wondered this too.

 

[thetrailboss]

Stenger responds....at least to the Caledonian Record:

NEWPORT CITY — Jay Peak Resort CEO and President Bill Stenger said he was surprised by some of the state and federal lawsuits over misuse and fraud of millions in EB-5 foreign investments in the Northeast Kingdom projects he spearheaded.

And he thanked his family and employees at Jay Peak for their support in the last few days.

Stenger, a Newport City resident who has lived in Vermont for 32 years and ran Jay Peak back when it was owned by a Quebec ski resort family, was locked out of his offices at Jay Peak Resort Wednesday.

On Thursday, Gov. Peter Shumlin, Attorney General Sorrell and the head of the Department of Financial Regulation unveiled a lawsuit by the state of Vermont and the main lawsuit filed in Miami by the U.S. Securities and Exchange Commission.

The SEC alleges that the fraud and misuse began in 2008, and over time Stenger facilitated misuse and fraud of $50 million by his partner, Ariel Quiros of Jay and Florida.

Both Stenger and Quiros are banned from any EB-5 projects or raising EB-5 investments.

The $200 million plus resort that Stenger built with EB-5 money is now being run by Leisure Hotels and Resorts of Kansas, brought in by state and federal authorities to operate the resort while the lawsuits play out in court.

LHR CEO Steve Olsen promoted Jay Peak chief marketing officer Steve Wright to general manager. The LHR team will work with Wright and his team to keep the resort going, including almost 70 weddings and a summer of already planned entertainment. Skiing continued on the mountain this weekend.

On Saturday, Stenger spoke to The Record.

“I have a wonder family and they are incredibly supportive. I have a wonderful staff at Jay Peak and they are incredibly supportive,” Stenger said.

“I’ve been advised by my attorney not to comment further,” Stenger said.

Stenger confirmed comments he made to the Burlington Free Press.

He told Free Press reporter Dan D’Ambrosio on Friday that he received word of the details of the federal and state lawsuits on Wednesday when they took over the Jay Peak and QBurke hotel offices.

“There was a lot of stuff in the presentation that I got on Wednesday that I was not aware of,” Stenger said. “I can’t go any further than that. I’ve got to let it go at that. I’m trying to figure this out as well. I just need to deal with it.”

He said he and his family are “holding up.”

Both of Stenger’s sons work at Jay Peak. He told the Free Press they still have their jobs. He could not comment on that Saturday on advice of his attorney.

On Monday before the lawsuits were unveiled, Stenger gave an interview with the Free Press about the conflict he was having with the state to do with oversight of the QBurke hotel project.

He said then that he was “disappointed this has gotten sideways.”

About his Northeast Kingdom Economic Development Initiative, Stenger was philosophical. Stenger has said for years that the EB-5 program allowed developers access to what he called “patient capital” in an area where there are few deep pockets willing to invest in projects that significantly would change the local economy.

He spoke two days before the federal and state authorities showed him the allegations and locked him out of his offices.

That puts an end to the proposed AnC Bio Vermont biotech plant in Newport City, which authorities said did not have the money needed to begin construction. It also ends the plans for the companion Renaissance Block hotel and retail space in downtown Newport City.

Stenger and Quiros razed the block where the hotel was to be built last year at the request of the city and merchants who didn’t want the vacant block to become a fire and safety hazard.

Mayor Paul Monette is meeting as early as this week with Shumlin to discuss the future of the cellar hole on Main Street. The property was purchased by Quiros’ business GSI of Dade County, Inc. of Miami in 2013 for $2.85 million. That company is one of those named in the federal lawsuit. But the property itself is not named.

Stenger and Quiros never applied for permission to build the hotel as an EB-5 project. It’s not clear if that property is under federal receivership like Jay Peak and the other EB-5 properties.

 

[mriceyman]

Stenger responds....at least to the Caledonian Record:

Stenger going with the trying to figure it all out defense. Cant blame him


Sent from my iPhone using AlpineZone

 

[Harvey]

I'm using that defense too.

 

[River19]

"What? Me? I couldn't have done those things......we need to get to the bottom of this....."

"For the past 2900 days I had no inkling that all those funds I wired broke damn near every rule of the Limited Partnership agreements........you mean the big Q wasn't dutifully sitting on the investors cash ready to deploy it on those economy saving projects?.....I mean sure I thought it was odd that any accountant that got close to it couldn't get account statements to reconcile for the past 8 years but......wow this is a shock, we need to get to the bottom of this really quick."

".....oh, those revenue projections for ANC Bio? and the FDA process?.....well those revenue projections would be realistic if the Korean firm didn't go belly up a while ago and I have been meaning to call the FDA to find out what I have to do to make fake body parts in VT.......I mean how complicated could that be? Right?.....hey anyone know the number for a good lawyer? I also have this waterfront property in Newport I would like to sell you.....a fixer upper if I ever saw one...."

 

[tnt1234]

https://www.youtube.com/watch?v=SjbPi00k_ME

 

[thetrailboss]

http://www.wcax.com/story/31755600/...ls-in-the-spotlight-after-alleged-kingdom-con

 

[VTKilarney]

The early season pass price window has been extended from May 9th to July 11th for both Jay Peak and Burke.

That is a smart move.

Steve Wright posted the news on Facebook from Puerto Rico. Hopefully he's getting some nice time at the beach before tackling everything at Jay Peak.

 

[VTKilarney]

There was an article in today's Caledonian Record about the new GM taking over at Jay Peak. The article mentioned that there are 550 employees in the summer and fewer during shoulder season.

If $250 million has been invested at Jay Peak, that's 500 EB-5 investors. Each investment is supposed to create 10 jobs, so there should be 5,000 jobs that wouldn't have existed otherwise.

I know that "indirect" jobs are included, but this just shows how absurd these job calculations are. In reality, about $350 million was raised - including Burke and AnC Bio. So in total there should have been 7,000 new jobs created.

 

[from_the_NEK]

How many employees during the winter?

 

[VTKilarney]

How many employees during the winter?

I heard Stenger give the number last year. Unfortunately, I can't remember what he said. My best recollection is that the number is around 1,400. Lots of these are part-timers. Prior to EB-5 the resort employed 100 in the summer. So EB-5 has created a mere 450 jobs for several months out of the year.

Stenger talked about bringing "as many as 10,000 jobs to an area economically depressed for generations." (see here: http://vermontlife.com/tag/jay-peak/ )

But, yeah... he's completely innocent in this charade...

 

[steamboat1]

Don't forget the 3 employees still left at Burke or was that 4.

 

[thetrailboss]

There was an article in today's Caledonian Record about the new GM taking over at Jay Peak. The article mentioned that there are 550 employees in the summer and fewer during shoulder season.

If $250 million has been invested at Jay Peak, that's 500 EB-5 investors. Each investment is supposed to create 10 jobs, so there should be 5,000 jobs that wouldn't have existed otherwise.

I know that "indirect" jobs are included, but this just shows how absurd these job calculations are. In reality, about $350 million was raised - including Burke and AnC Bio. So in total there should have been 7,000 new jobs created.

It took a lot of jobs to build that unit at Trump Place.


Sent from my iPhone using AlpineZone

 

[VTKilarney]

Don't forget the 3 employees still left at Burke or was that 4.

As long as Sarah "stands by the Q," there are three people at the Burke hotel.

 

[abc]

So I am going to show my ignorance here with these questions. Does knowing that someone is doing something illegal and not telling someone, a crime? Even if Ary, Bill's kids or other staff members were aware of this, does that open the possibility to civil or criminal charges? Is it up to these people to understand the rules and regulations governing the EB-5 program to actually be able to determine something is illegal?

I think the bar is a bit lower than that. It's only criminal if they're expected to understand it and advice on the legality of it, like the lawyers and accountants involved.

I don't think it's a crime if you saw a murder but not reporting it. Immoral but not criminal.

On the other hand, if someone took advantage of it and got financial gain, they might be in trouble as part of a conspiracy. They may need a good lawyer.

I'm not a lawyer though.

 

[from_the_NEK]

Also from the article in the Cal-Rec is this quote from Steve:

“This team that comes in from LHR are a real professional bunch,” Wright said Monday.[FONT=Helvetica Neue, Helvetica, Arial, sans-serif]“They are experienced hospitality folks, experienced resort folks.”[/FONT]

Reading between the lines, that doesn't bode well for Q Jr at Burke. His track record for running a resort is exactly the opposite. I really hope he is either gone from Burke within the next month or completely marginalized. I think everyone is really hoping for the former. Ary Jr being off of the payroll would be a HUGE boost to the mountain's image both locally and region-wide.

Unfortunately, we are probably stuck with the "Q" name for the foreseeable future until the legal and financial mess that Ary Sr has created is unraveled and a new "corporation" takes over and can officially drop the "Q".

 

[deadheadskier]

I would think Steve would be championing JRs dismissal. Wasn't Steve promoted to GM at Burke to replace Ary at one point? It lasted a very short length of time IRRC. I can't imagine him being the most positive work reference for Ary with LHR.

 

[VTKilarney]

Also from the article in the Cal-Rec is this quote from Steve:



Reading between the lines, that doesn't bode well for Q Jr at Burke. His track record for running a resort is exactly the opposite. I really hope he is either gone from Burke within the next month or completely marginalized. I think everyone is really hoping for the former. Ary Jr being off of the payroll would be a HUGE boost to the mountain's image both locally and region-wide.

Unfortunately, we are probably stuck with the "Q" name for the foreseeable future until the legal and financial mess that Ary Sr has created is unraveled and a new "corporation" takes over and can officially drop the "Q".

While they can't legally change the name, there is no reason why they need to include the "Q" in their marketing materials.

I really do believe that Ary is a short-timer. Keep in mind that a company in Kansas is going to have absolutely no idea what was happening at Q Burke. They've only been there for a few days. They will learn quickly, no doubt.