Another interesting video:
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Stenger and Quiros Ousted from Management of Jay Peak and Burke
- Thread starter thetrailboss
- Start date
BenedictGomez
Well-known member
I see this as being enormously different than the other examples you posted because.....
And it's even worse than mere boastful claims, Vermont literally was not doing the financial analysis that they literally publicly claimed they were doing, so State of Vermont's actions aided the fraud. I have no idea how this works in a court of law, but that's the logical way to explain what occurred.
Smellytele
Well-known member
not James Tiberius Kirk?
correct, you have no idea how the law works, despite the fact that you've been spouting off incessantly about a whole manner of topics. The govt. does not guaranty private investments whether in an eb5 program, or in the stock market, or a local restaurant. if you want an investment insured, try an FDIC bank account. the only thing the govt. promised here, were the visas if the terms of the program were met.
and its not any different then what the SEC was doing with respect to those other frauds. The SEC investigated madoff, years before the fraud came to light, and those other companies were public entities subject to filings and audits as such. people relied on the govt. oversight, but that doesnt mean the govt. insures their investments or is in any way responsible for the fraud.
No; then they would have had to name the ship the Enterprise and that name is taken.
abc
Well-known member
No, it did NOT.
Madoff came to implosion when the economy went south and his investors wanted their money back!
SEC did NOTHING!!!
However, that's besides the point. SEC never goes out "promoting" any business.
VT government didn't have to promote their business in the EB-5 program. No other state did, except VT? And this looks to be the only one that went up in flame the highest. One wonders whether it's just a mere coincidence?
He's right. They did sniff around Madoff a few years before.....and missed it.
abc
Well-known member
Don't believe so. They got a tip from Madoff competitor but they didn't investigate at all. (they should, but no one lose their job as a result nevertheless)
But like I said, it's besides the point.
VT government didn't have to promote their business in the EB-5 program. No other state did, except VT? And this looks to be the only one that went up in flame the highest. One wonders whether it's just a mere coincidence?
freeski
New member
The governor traveled to Asia and helped sell the EB-5 program. If he told investors the state would audit and be a watchdog for the program then the state could be held responsible.
Re: Maddoff. Check out the PBS "Frontline" episode on him. That's where I saw that the SEC was tipped off, sniffed around, and did nothing.
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freeski
New member
Yes, video on page 112 Gov. Shumlin: "Vermont is the only EB-5 program that covers the entire State of Vermont and is audited by the State of Vermont. We make sure that the EB-5 program offerings are good investments for the investor and good economic development job creators for the State of Vermont." This isn't a pitchman claiming Vermont is overseeing the finances. It's the governor of the State. Stenger also says the 4 programs are put together with the cooperation of the State. Vermont open your wallet.
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BenedictGomez
Well-known member
So you're on record stating that there will NOT be a lawsuite against State of Vermont in this, right?
Because if not, there's no coherent point to the above rambling paragraph.
Actually, it's a helluva lot different.
The SEC wasn't actively promoting Madoff.
The SEC wasn't telling people publicly that they were examining all of Madoff's records on a regular basis, when they in fact were not.
The SEC wasn't (bizarrely) defending Madoff after the first chinks in the armor appeared.
So while the SEC dropped the ball in relation to Madoff in a major way, the two cases aren't similar at all other than the fact they both involved Ponzi schemes, and stereotypical government incompetence.
BenedictGomez
Well-known member
Exactly. This is a rather major point.
The SEC also doesn't lie about conducting financial analysis and investigations that they're not actually conducting, as was the case with State of Vermont.
So yeah, I dont know much about the law, but I do believe there will eventually be a lawsuit against State of Vermont. They have two things going for them that tend to act as Miracle Grow for lawsuits:
1) Obvious negligence that caused real harm
2) Lots and lots of money
abc
Well-known member
I too, have no idea if there will be lawsuit against the state. But Vermont may join Mr Ponzi in creating a new term for government promoting a private business engaging in outright fraud, by committing outright fraud of its own (claiming audit that never conducted).
What's more likely? Will there be a new law forbidding state government from promoting individual business outside the state?
What's more likely? Will there be a new law forbidding state government from promoting individual business outside the state?
mbedle
Well-known member
I am a little confused, if I read the above quote, it states that Vermont completed audits on the EB-5 offerings. That was done, so how is the state at fault for this mess? I haven't read anywhere where the state was committed to auditing the projects during construction, though completion. Am I missing something?
drjeff
Well-known member
I'm guessing it's a case of a simple audit (I.E. There was X millions in Jay's EB-5 account that the state was holding, Jay submitted the required paperwork for release of those funds, VT saw that the paperwork looked in order, and released the funds to Jay) vs. what was the likely the forensic accounting that the SEC did as they compiled the info that lead to that "spaghetti plot" map that they (The SEC) produced when they made their announcement about the fraud.
If it was VT's "job" to just make sure that the $$ was in escrow with the state until Jay provided some documentation of the work, and wasn't supposed to look into it in fine detail, then as absurd as it may seem, the State very well may have done absolutely nothing wrong in this case
from_the_NEK
Active member
The problem is that the process where the money went into an escrow account controlled by the state didn't start happening until the last year or two of this debacle. Before that Q had complete control of the money. VT wasn't really doing any auditing of accounts or expenses other than a very broad overview. It was ridiculously easy for Q to hide the shell game he was playing with money.
Once the SEC started sniffing around, VT decided they better put a state financial regulatory agency in charge of controlling the money rather than just the State EB-5 office which was really just a bunch of cheerleaders.
Once the SEC started sniffing around, VT decided they better put a state financial regulatory agency in charge of controlling the money rather than just the State EB-5 office which was really just a bunch of cheerleaders.
mbedle
Well-known member
I guess that is why I am confused that people feel that Vermont somehow has some liability in this mess. They never stated to investors that they were going to audit these projects. They simple stated that they audited the EB-5 offering documents and that was the extent of their involvement. On the last two projects, they partially audited the Bio project midway when they took control of the escrow account. An the Burke hotel has been under their control since the beginning. The state can not be held responsible for the miss management of monies spent prior to their involvement. The one thing that they might have a case on is the business plans that were included in the offering documents. If someone can determine that they were not factual or riddled with errors, that might fall back on the state.
