The Securities and Exchange Commission on Thursday accused a pair of Vermont developers and the companies they run of committing massive fraud in the state’s rural Northeast Kingdom.
The civil case, which was unsealed Thursday in U.S. District Court in Miami, alleges that Jay Peak Resort owners Ariel Quiros and Bill Stenger misused hundreds of millions of dollars they raised from foreign nationals through the federal EB-5 investor visa program. Of the more than $350 million they collected to build hotels, ski resort improvements and a biomedical research facility, the SEC said, more than $200 million was misappropriated.
The state of Vermont, which collaborated with federal investigators for more than a year, filed a similar suit Thursday morning in Washington Superior Court. That afternoon, a Burlington-based federal prosecutor said he was conducting an investigation to determine whether criminal charges should be brought.
According to the SEC, Quiros and Stenger lied to investors and “omitted key information” while raising money for the Northeast Kingdom Economic Development Initiative — a series of projects planned for Jay, Newport and Burke. Rather than direct the money to its intended projects, the agency alleged, the developers diverted a large portion of it “to fund deficits in earlier projects.”
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