Stenger and Quiros Ousted from Management of Jay Peak and Burke

[BenedictGomez]

Do you think Quiros is smart enough to do that? I wouldn't be surprised if it was sitting in an offshore account labelled "money stolen from EB5 investors."

If I were an evil person, I'd have it in gold bars, buried on Federal land, with stashed GPS coordinates.

At any rate, I'm looking at my pocket watch wondering when the media is going to start asking the outrageously obvious question of, WHERE are the missing TENS of millions of dollars?

There's a heckuva lot more "missing" than just a $2M NYC condo, that's really just an hors d'oeuvre.

 

[mbedle]

If I were an evil person, I'd have it in gold bars, buried on Federal land, with stashed GPS coordinates.

At any rate, I'm looking at my pocket watch wondering when the media is going to start asking the outrageously obvious question of, WHERE are the missing TENS of millions of dollars?

There's a heckuva lot more "missing" than just a $2M NYC condo, that's really just an hors d'oeuvre.

I think that has already been answered. 22.1 million for Jay Peak, 7 million for Burke, 2.5 million for Condo, 6 million for IRS, 4.2 million for Vermont, 5.5 million went to NECS (that money was most likely spent already) and some amount I think was spent on interest for the margin loans. I think another large chunk of money went into the contractors hands for cost overruns on a couple of the initial projects. I wonder what affect that might have on Peak CM and the other contractor they used for these projects.

 

[BenedictGomez]

I think that has already been answered. 22.1 million for Jay Peak, 7 million for Burke, 2.5 million for Condo, 6 million for IRS, 4.2 million for Vermont, 5.5 million went to NECS (that money was most likely spent already) and some amount I think was spent on interest for the margin loans. I think another large chunk of money went into the contractors hands for cost overruns on a couple of the initial projects. I wonder what affect that might have on Peak CM and the other contractor they used for these projects.

Even if that's the case, and you add all your numbers above, there's still a lot of money not accounted for.

 

[BenedictGomez]

Also, I was curious as to the state of the 84 condos, and where that's at, and it doesn't sound good.

Seems like these cottages might be near-term eyesores:

The Stateside Hotel is done, but construction on the 84 cottages is nowhere near finished, and construction on the recreation center and the medical center has not even begun. Only 36 of the 84 cottages are even close to being done. I am informed that it will cost approximately $11 million to complete the cottages (not including the $2.1 million Stateside allegedly owes to the contractor for constructing the cottages). It is estimated to cost an additional $5.2 million to build the recreation center and $1.3 million to build the medical center. As set forth above, there was only $19,545.85 in Stateside's accounts. JCM, which was the project manager for Stateside, and where Quiros testified he sent investor funds, only has $484,116.70 in its accounts. Q Resorts has only about $1.2 million. This is nowhere near the amount needed to finish Stateside. In short, despite raising all the money the Stateside offering documents said was needed to build the project, the Receivership Defendants did something other than build the Stateside project with the money raised, because the Jay Peak entities no longer have it.

So they estimate $13.1 Million to complete the cottages, and the dedicated Stateside accounts for those funds have less than $500k.

Honestly, will the cottages EVER be built out, or will they be ghost hulks?

The smartest thing right now I think for a new owner would be to invest the $13.1 Million to finish them, and then switch gears/plans and SELL them (assuming you can get the zoning changed, which I imagine would be needed).

 

[steamboat1]

http://vtdigger.org/2016/05/11/sec-receiver-its-time-to-remedy-wrongs/

 

[thetrailboss]

Apologies if already posted here, but Quiros and Stenger made today's NYT:

http://www.nytimes.com/2016/05/11/us/fraud-charges-mar-a-plan-to-aid-a-struggling-vermont-region.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=second-column-region®ion=top-news&WT.nav=top-news&_r=0

My favorite quote:

“In two years, this will look like a bump in the road to good jobs and great resorts.”

That's from the Governor, who in two years will be out of office and probably in a country with no extradition treaty with the U.S. Classy--don't worry, be happy!

 

[thetrailboss]

http://vtdigger.org/2016/05/11/sec-receiver-its-time-to-remedy-wrongs/

This is a recurrent theme:

Quiros and Stenger recently attempted to obtain a $25.8 million loan to finish Stateside, purchase snow guns and repair the Jay Peak Tram. They pledged all of the assets at Jay Peak and Burke Mountain but failed to secure the loan, Goldberg said.

I think that these assets have been pledged now at least once if not twice for things.

And this is just absurd:

The developers took money out of the projects in fees, some of which, the SEC argues, they were not entitled to. In all, Quiros and Stenger took $98.3 million in management fees and land sales, and made direct purchases of two resorts, two condos in New York City and land in Newport straight out of investor funds, the SEC says.

Of that amount, Quiros and Stenger were entitled to take a total of $42.8 million in profits for 10 percent to 15 percent in project management fees, 5 percent for contingencies and a total of $12.68 million for land proceeds, based on agreements they signed with investors.

The SEC alleges that the balance — $55.5 million — was taken from investors illegally.

And the definition of a Ponzi scheme:

Dee described the convoluted scheme: They used People’s Bank, Raymond James investor accounts, Quiros’ accounts — Q Resorts and Jay Construction Management — Treasury bills and margin loans. The flow of funds was circular, and shortfalls for each project were made up by new money from new investors.

 

[mbedle]

Even if that's the case, and you add all your numbers above, there's still a lot of money not accounted for.

What other money are you talking about? I think the total shortfall (missing money) is around 69 million to complete everything. Around 50 million was used, as describe in my previous post. The rest was used to pay for overruns on the Phase I & II projects.

 

[BenedictGomez]

The toughest challenge, though, is figuring out what to do with the AnC Bio Vermont project, which was never built and most of the money has disappeared.

No, actually, that's the easiest "figuring" remaining in this entire mess.

 

[from_the_NEK]

No, actually, that's the easiest "figuring" remaining in this entire mess.

AnC Bio's not even a company anymore in S Korea and NONE of its products are even approved in the US. That project should never be built. Now, keeping all of the investors from being completely screwed by not building a project they paid for is the hard part. Can they have their "money" transferred to another project? Do they take whatever refund the receiver can secure and be happy with that?

 

[BenedictGomez]

What other money are you talking about? I think the total shortfall (missing money) is around 69 million to complete everything. Around 50 million was used, as describe in my previous post. The rest was used to pay for overruns on the Phase I & II projects.

It's gotta' be way more than that. Oddly, the way this is getting reported it's sometimes conflicting info, but it must be north of $100M. Take the worst abuse, the laughably fake bio project for instance, there's over $60M "missing" just from that project alone.

 

[BenedictGomez]

AnC Bio's not even a company anymore in S Korea and NONE of its products are even approved in the US. That project should never be built.

I know, right?

It's almost as if going into business to manufacture artificial organs is riskier and more technologically involved than manufacturing lift ticket widgets.

I may have to rethink my artificial heart business now. Previously I thought it was a lay-up.

 

[mbedle]

Holly shit - just say a bill from Quire's lawyer for the tune of $204,852... WOW and that is for 15 days of work.

 

[BenedictGomez]

Holly shit - just say a bill from Quire's lawyer for the tune of $204,852... WOW and that is for 15 days of work.

Is there no law to prevent this? Not even being sarcastic.

When it's known that an individual has used fraud or theft to aquire wealth, and that "wealth" is being sought to be recovered, why should that individual be allowed to hire an extremely high-priced attorney when it's 100% known that the victims are the ones......and this is just heavy NaCl in the wounds.....paying those bills?

I imagine the answer is as simple as innocent until proven guilty?

 

[farlep99]

Is there no law to prevent this? Not even being sarcastic.

When it's known that an individual has used fraud or theft to aquire wealth, and that "wealth" is being sought to be recovered, why should that individual be allowed to hire an extremely high-priced attorney when it's 100% known that the victims are the ones......and this is just heavy NaCl in the wounds.....paying those bills?

I imagine the answer is as simple as innocent until proven guilty?

Actually, no. This is a civil matter, not criminal, so there is no presumption of innocence.

But on the matter of whether or not the gov't can use asset forfeiture (or freezing assets), which effectively stops a defendant from paying a lawyer, there's actually a case before the Supreme Court right now on this very issue. It deals with a criminal case - but most of us believe AQ will have one of those in the not too distant future...

http://www.csmonitor.com/USA/USA-Up...overnment-freeze-money-needed-to-pay-a-lawyer

 

[JoeB-Z]

Holly shit - just say a bill from Quire's lawyer for the tune of $204,852... WOW and that is for 15 days of work.

We are going to see a series of Quiros "lawyers" as they realize the corpus they hope to feed off is a penniless fool.

 

[BenedictGomez]

Actually, no. This is a civil matter, not criminal, so there is no presumption of innocence.

But on the matter of whether or not the gov't can use asset forfeiture (or freezing assets), which effectively stops a defendant from paying a lawyer, there's actually a case before the Supreme Court right now on this very issue. It deals with a criminal case - but most of us believe AQ will have one of those in the not too distant future...

http://www.csmonitor.com/USA/USA-Up...overnment-freeze-money-needed-to-pay-a-lawyer

Well that's good news, because this seems like a no-brainer.

 

[farlep99]

Well that's good news, because this seems like a no-brainer.

Yeah it really does seem like a no-brainer criminal case. Criminal cases involving financial fraud are complex though & they take a lot of time.

I sent that link on that case yesterday before I realized that the Supreme Court had already ruled on the case in question. They essentially ruled that the Gov can only freeze 'tainted' assets & not those assets that are not in question in a crime. It's actually a really interesting case & it's one area where there really is no party-line view.

I think the court ruled properly, but here's the thing: In the case in question the Gov was accusing someone of a $50m fraud (sound familiar?) When the subject of the case was indicted she had $2m in assets. Gov essentially argued that since much of the 'tainted' funds had been spent already, they had a right to freeze so-called 'legitimate' assets so the subject could pay Restitution, criminal penalties, etc. Subject argued she had a right to the money to pay for a lawyer. Supreme Court agreed with her.

I can easily see a similar situation playing out with AQ. If he's charged criminally, he'll be able to pay a lawyer with any money he may have that's not in question in the fraud. So unfortunately it is 'salt in the wounds' for investors because much of their money is long gone & Ary will still get a high priced lawyer.

 

[from_the_NEK]

In today's shocking news (pun intended), Q Burke was behind in paying it's electric bills.

 

[DoublePlanker]

lawyers always get paid. After all, there are lawyers specializing in bankruptcy. They get paid before creditors.