kingdom-tele
New member
They aren't missing anything.
Rich people stealing money and pretending they had no idea they were wrong. It is all for the lawyers now.
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Stenger and Quiros Ousted from Management of Jay Peak and Burke
- Thread starter thetrailboss
- Start date
They aren't missing anything.
Rich people stealing money and pretending they had no idea they were wrong. It is all for the lawyers now.
VTKilarney
Well-known member
The Caledonian Record has an absolutely bizarre editorial that ran today:
Last week state and federal officials held a press conference, announced an SEC complaint, and took down Ariel Quiros Sr. and Bill Stenger.
The 81-page SEC filing alleges that Quiros got in trouble when he bought Jay Peak with investor funds specifically earmarked for other projects. From that point forward Quiros allegedly used new investment funds to cover past bills in a classic ponzi scheme. In order to accomplish that, he had to set up lines of credit through his investment firm – collateralize them with other investor funds – and commingle most of it to keep the money flowing. It means that, from the beginning, money coming into coffers was allegedly diverted from specific uses promised to investors.
Stenger is accused of knowingly facilitating the scheme by transferring money, and fiduciary control of it, to Quiros.
The feds called it a “massive fraud” and painted Quiros and Stenger as really terrible actors. Online chatter suggests the populist masses are ready to take up their pitchforks. That, of course, is what the press-conference was intended to accomplish.
But take the time to read the 81-page complaint, and you might realize two things. First, the list of Quiros’ alleged “ill-gotten gains” – namely the Jay Peak resort and condo at Trump Towers – could have all been covered by lawful fees commanded by the de- velopers. Second, they never stopped investing in their projects. They just did it with shoddy book-keeping and excessive free- wheeling. How does that differ from Peter Shumlin’s $200 million criminal incompetence on Vermont Health Connect? Or daily squandering, commingling, and diverting taxpayer funds from their intended uses by your state and federal governments?
That’s not to forgive Quiros’ alleged mismanagement or ill-gotten gains – if it is indeed proven that he enjoyed any. But it is to recall how much Quiros and Stenger accomplished in an area not historically known as a growth market.
Despite their alleged missteps, we still believe Quiros and Stenger were trying to create jobs and fulfill their promises. And we sincerely believe they would have gotten away with it had not been for the meddling state.
Since the pair actually built a lot of stuff, all is certainly not lost. Attempts will be made to make investors whole and keep the re- sorts operating until such time as new owners can be found. The prognosis is worse for downtown Newport, and the AnC Bio proj- ect, but we wouldn’t ever bet against the hard-working people of Orleans County to turn a liability into an asset.
As far as bottom lines go, though, last week’s press conference took Quiros and Stenger out of the EB-5 development game for good. It takes a lot less time to tear down than to build up, and - however Quiros and Stenger are ultimately judged - last week’s takedown extinguished a lot of high hopes for the Northeast Kingdom.
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Last week state and federal officials held a press conference, announced an SEC complaint, and took down Ariel Quiros Sr. and Bill Stenger.
The 81-page SEC filing alleges that Quiros got in trouble when he bought Jay Peak with investor funds specifically earmarked for other projects. From that point forward Quiros allegedly used new investment funds to cover past bills in a classic ponzi scheme. In order to accomplish that, he had to set up lines of credit through his investment firm – collateralize them with other investor funds – and commingle most of it to keep the money flowing. It means that, from the beginning, money coming into coffers was allegedly diverted from specific uses promised to investors.
Stenger is accused of knowingly facilitating the scheme by transferring money, and fiduciary control of it, to Quiros.
The feds called it a “massive fraud” and painted Quiros and Stenger as really terrible actors. Online chatter suggests the populist masses are ready to take up their pitchforks. That, of course, is what the press-conference was intended to accomplish.
But take the time to read the 81-page complaint, and you might realize two things. First, the list of Quiros’ alleged “ill-gotten gains” – namely the Jay Peak resort and condo at Trump Towers – could have all been covered by lawful fees commanded by the de- velopers. Second, they never stopped investing in their projects. They just did it with shoddy book-keeping and excessive free- wheeling. How does that differ from Peter Shumlin’s $200 million criminal incompetence on Vermont Health Connect? Or daily squandering, commingling, and diverting taxpayer funds from their intended uses by your state and federal governments?
That’s not to forgive Quiros’ alleged mismanagement or ill-gotten gains – if it is indeed proven that he enjoyed any. But it is to recall how much Quiros and Stenger accomplished in an area not historically known as a growth market.
Despite their alleged missteps, we still believe Quiros and Stenger were trying to create jobs and fulfill their promises. And we sincerely believe they would have gotten away with it had not been for the meddling state.
Since the pair actually built a lot of stuff, all is certainly not lost. Attempts will be made to make investors whole and keep the re- sorts operating until such time as new owners can be found. The prognosis is worse for downtown Newport, and the AnC Bio proj- ect, but we wouldn’t ever bet against the hard-working people of Orleans County to turn a liability into an asset.
As far as bottom lines go, though, last week’s press conference took Quiros and Stenger out of the EB-5 development game for good. It takes a lot less time to tear down than to build up, and - however Quiros and Stenger are ultimately judged - last week’s takedown extinguished a lot of high hopes for the Northeast Kingdom.
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abc
Well-known member
Not that bizarre.
Sarcasm poorly executed.
"And we sincerely believe they would have gotten away with it had not been for the meddling state."
Sarcasm poorly executed.
"And we sincerely believe they would have gotten away with it had not been for the meddling state."
VTKilarney
Well-known member
Trust me. It's not sarcasm.
MEtoVTSkier
Active member
Yeah... "meddling State"... When it's now obvious that the Feds have been all over this for a looong time now...
from_the_NEK
Active member
The Cal-Rec has absolutely no love for our current governor and his administration (a lot of which is deserved). However, they are trying WAY to hard to make this look like a foul up by Shumlin while whitewashing the fact that Quiros is a shady character with greedy intentions.
from_the_NEK
Active member
The fact there was a lot of money being skimmed off the top doesn't help any of these projects look profitable.
VTKilarney
Well-known member
That's always been the concern with these EB-5 projects, and BenedictGomez deserves credit for pointing this out a long time ago. There is a reason that the banks won't touch these projects with a ten foot pole.
On the other hand, if you read between the lines, things look more stable at Jay Peak than they do at Q Burke. (Not that this should be a surprise.) The Receiver has asked for money to get Q Burke through the next 13 weeks, but has not made the same request for Jay Peak.
abc
Well-known member
abc
Well-known member
I'm a little confused at the latest blame game towards the state government. Jay Peak is basically a private enterprise, is it not? So some shady character had use it to run a ponzi scheme. What's the state's responsibility in that?
When Madoff's scheme got exposed, SEC was blamed, rightly, for failing to act on tips from ironically, competitors. The NY state or city government were not involved until the stage of filing criminal charges.
In the Jay Peak's case, it's the investors who complain to the SEC. They maybe again slow to act. But I'm missing the connection to the state government. Is it the EB visa program that they're suppose to be overseeing?
When Madoff's scheme got exposed, SEC was blamed, rightly, for failing to act on tips from ironically, competitors. The NY state or city government were not involved until the stage of filing criminal charges.
In the Jay Peak's case, it's the investors who complain to the SEC. They maybe again slow to act. But I'm missing the connection to the state government. Is it the EB visa program that they're suppose to be overseeing?
from_the_NEK
Active member
It was a large EB-5 project(s) that the state agency was supposed to be oversee but looked like nothing more than cheerleaders for a long time before noticing something was wrong (tipped off by the SEC snooping around) and finally beefing up their oversight.
steamboat1
New member
Good article posted over on TGR this morning might explain the state & governments role a little better.
http://www.sevendaysvt.com/vermont/...l&utm_source=facebook.com&utm_campaign=buffer
http://www.sevendaysvt.com/vermont/...l&utm_source=facebook.com&utm_campaign=buffer
MEtoVTSkier
Active member
Good article. Thanks for sharing.
That makes no sense at all. The "they would have gotten away with it" line was just stupid. So it is OK for fraud to occur if it benefited the community? Sounds like a defensive editorial board to me.
from_the_NEK
Active member
The Cal-Rec had been supporting Stenger-Quiros right through this late winter even when things looked like the projects were turning sour. Blaming the entire "failure" at Burke (massive layoff and hotel delays) on the state "withholding" the EB5 money.
Unlike many individuals (I included myself in this group) that have admitted their faith in Stenger/Quiros had been misplaced, the Cal-Rec seems to have doubled down in their defense of them. It almost seems like they took a page out of the Ary Quiros Jr book of doubling down on a position in the face of pretty overwhelming evidence.
Pretty much saying:
These guys really aren't that bad!
Look at all they've done for our region!
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As I have said multiple times, a $55M hotel on Burke, the 9 figure investment in projects at Jay, etc. don't make one ounce of sense outside of the EB-5 program. What kind of ROI can someone really pull out of a $55M hotel investment on Burke Mountain? Does someone really think that hotel building and resort will ever have an EBIT of even $2-4M per year?
Heck it looks like Jay Peak with all its fancy hotels and water parks and skier visits and hockey tournies etc. still can't get into the black let alone turn even a 1% ROI on the funds invested in that joint.
It looks more and more like Stenger and Q were even burning investor funds to keep daily bodily functions of the JP business running.
I still maintain that Q and Jr are barely qualified to run a fast food joint in Vt let alone a 9 figure business.........or should I say a 7 figure business they spent 9 figures of others money building......
Heck it looks like Jay Peak with all its fancy hotels and water parks and skier visits and hockey tournies etc. still can't get into the black let alone turn even a 1% ROI on the funds invested in that joint.
It looks more and more like Stenger and Q were even burning investor funds to keep daily bodily functions of the JP business running.
I still maintain that Q and Jr are barely qualified to run a fast food joint in Vt let alone a 9 figure business.........or should I say a 7 figure business they spent 9 figures of others money building......
The hotel probably wasn't 55M, my guess more like 35-40M for a building that size. Since Peak, S&Q are partners that makes it easy to inflate.
The play is going to be to renovate a majority of rooms into condo units and sell fractional and full shares. Owners can put their units into the rental pool and will pay assocaition fees to cover O&M costs. The discount it will be sold at will allow a developer plenty of room to renovate, sell and still make a nice profit as long as not greedy and overprice. It would be even sweeter if they sold them as individual entities so to not get stuck with the mountain. I think this scenerio will also happen at Jay.
The play is going to be to renovate a majority of rooms into condo units and sell fractional and full shares. Owners can put their units into the rental pool and will pay assocaition fees to cover O&M costs. The discount it will be sold at will allow a developer plenty of room to renovate, sell and still make a nice profit as long as not greedy and overprice. It would be even sweeter if they sold them as individual entities so to not get stuck with the mountain. I think this scenerio will also happen at Jay.
