By Michael Bielawski
A new report details mistakes made by the state concerning its handling of the infamous EB5 scandal of 2016, when millions of dollars were extracted from major development projects involving a federal foreign worker program.
Developers Ariel Quiros, William Stenger, and William Kelly were all convicted following their indictment in federal court.
The report by Auditor Doug Hoffer comes to defense of the state by suggesting they were deceived with false information, but it still acknowledges more could have been done to protect huge losses for investors.
“This report is intended to contribute to the public record of the Jay Peak scandal by providing, in a single source, a comprehensive summary of the State government’s role and answers the following questions,” the Hoffer report states.
There are three primary questions it seeks to answer. One: “How did ACCD [Agency of Commerce and Community Development] and others describe ACCD’s oversight and what oversight actions did it take?”
The next is, “What actions did the State take regarding its approval of the AnC Bio Vermont and Burke Mountain EB-5 projects before April 2016?”
A report appearing on VermontBiz in 2021 offered some background on AnC Bio which had business dealings across the world.
“A fourth defendant, Jong Weon Choi, also known as Alex Choi of South Korea, remains on the run, federal authorities have said,” it states. “Choi was convicted in South Korea for financial fraud in 2016 in connection with AnC Bio Korea, which the proposed Vermont venture was tailored after, officials said.”
AnC Bio was intended to be a drug manufacturing operation, but it was never built.
VermontBiz notes that overall, there was a general sentiment that the state was not fully transparent with the public.
“Both sets of lawyers have maintained Vermont officials kept the public in the dark while trying to ensure most of the EB-5 construction work was completed,” their report states.
The third question they ask is, “What is the reported immigration and investment repayment status of the investors in each of the Jay and Burke EB-5 project phases?”
The status of repayments is not great. The report recalls the damage done to the victims.
“Many of the investor/victims of the fraud perpetrated by Quiros, Kelly, and Stenger are still experiencing negative effects years later. Most have received only a fraction of their investments back and many have not received green cards, a principal draw of the EB-5 program,” it states.
It alleges that false information was preventing the state from detecting the fraud. It states, “As part of the fraud scheme, the offenders lied and provided false and misleading documents to State officials. Undoubtedly this played a role in the State taking years to take action against Jay Peak, Burke Mountain, and AnC Bio Vermont EB-5 Fraud.”
Still, it concedes that more could have been done.
“Nevertheless, it is at least possible that a more proactive approach by ACCD (e.g., refusing to sign MOUs without financial audit clauses, going through with its warnings to cancel the AnC Bio Vermont MOU) could have mitigated investor losses. The Governor’s decision to bring the expertise and authority of DFR into the VRC was key to
stopping the fraud since DFR’s investigative work, in conjunction with that of the SEC, led to enforcement actions.”
The report rocked Vermont media, the scope and scale of the incident seemed overwhelming to Vermonters.
“Six years ago, federal regulators revealed the largest financial fraud in Vermont’s history,” Vermont Public wrote when they reflected on the affair in 2022. “The owners and developers of Jay Peak ski resort were accused of misappropriating more than $200 million that they’d raised for development projects in the Northeast Kingdom.”
The author is a writer for the Vermont Daily Chronicle
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Categories: Business, Crime, State Government
NO
The states roll was not to let the money out until something was built, just like a bank, with a contractor and construction loan. It’s really not that hard.
This was fraud on epic proportions. And everybody was in on it.
Why do you think the big banks shelled out millions of dollars for this to just go away? Vermont is very cavalier with other people’s money.
If your store manager, didn’t lock the door every night upon leaving and everything was stolen, several times, AND they happen to find out the thieves were friends with the store manager…..WHAT WOULD YOU DO AS THE STORE OWNER?
This is the case with EB5 in Vermont.
When you look under the hood of Vermont government, you are going to find much wrong with the motor of that car….
You’d think they’d at least give them a green card, they held up their part of the bargain, bet they are a bit “upset” they could have come across the border illegally and been put up in a 5star hotel and given a credit card! And allowed to vote in Vermont….where’s the love they are probably wondering…….
Montpelier’s only love is for money, the rest of you can go pound sand, Vermonter or Foreign investor, we got you money, now go screw, we don’t care what you think.
Correct. Peter Shumlin was in on it. Senator Leahy and his wife, Marcel Pomerleau (niece of real estate mogul Tony Pomerleau – who was an early participant in the dealings), not to mention political hangers-on, Peter Welch and Bernie Sanders, all of whom endorsed the project until it started to go south. Tony Pomerleau was one of the first to figure out the scheme when he bailed on a related Newport, VT real estate deal. But not one of them warned the rest of us that the shady dealings were under foot at the time. And all Mr. Hoffer can say is that the State could have done better at managing its fiduciary responsibility to taxpayers.
But when Trump makes a deal, get’s a loan, pays it back on time and with interest, with no victim, no fraud, he’s crucified for claiming his billion-dollar estate, Mar A Lago, determined by current appraisals, was worth more than $18 Million. Never mind the poor slob who owns a Slate Ridge property in Pawlet who was been busted for a zoning violation, and then had a tussle with a deputy local yokel that maced him in the face. I can even imagine hearing the Queen of Hearts (VT A.G. Charity Clark) yelling ‘off with their heads’.
This isn’t law and order or accountability. It’s anarchy. And if it keeps up, no one will respect the law.
To Doug Hoffer…. Has a statute of limitation expired on this scam? If not, then why aren’t you asking for charges to be brought against Donovan, Shumlin, Leahy and all those that were responsible for the corruption behind this. They just didn’t do their jobs in their so called oversight.
fraud in vermont/// why you must be joking///////// they had to steal the money from some body/// look at all the people they keep working and who made all the money////
Yet, the State still has the program in place. The Agency and Department is operating the program and our taxpayer money is paying for it. Perhaps the reason the CCP was invited to the State House in February 2019 was to sell businesses and properties that cratered after the plandemic and/or salvage defunct EB-5 deals that others were cheated out of? It was all geared toward the Asian Pacific money was it not? China has taken full advantage of real estate fire sales all over the country – they wouldn’t come here to pick up maple syrup – they likely leveraged the land the trees are standing on.
Mike Pompeo pointed out at a governor’s meeting in which the chinese labor party was present that governor Phil Scott is CCP friendly.
It’s unfortunate that we can’t put a video on here because there is a video available and Phil Scott attempts to cover up his face a bit…
I’d like to think he did it out of shame but I don’t think he has any feelings other than greed and deceit..
I follow Vermont Citizen Media X and a lot of information is available concerning governor Scott and others in Vermont government.
We are existing in a cesspool under rule of both the republican and democrat parties in our state.
Elections are coming up again and the ability to discuss openly and freely the people running for office and the people that have been elected to office and what they have done and will do to the people they asked to vote for them has been censored by some of the republican groups.
If they are censoring free speech I wonder what they are up to?
This directive to blindly vote republican leaves a bad taste in my mouth when they don’t allow us to scrutinize who we are voting for.
Where did TJ Donovan go? When this hit the fan, he conveniently disappeared. He and Shummy are nowhere to be found and the good ol boy network isn’t looking.
Put them all in Jail! Beans and maybe a 🌭 hotdog two period !
It’s about time this issue comes back around so that we can finish seeing ALL the players in this dastardly deed that almost got away. Now to arrest them and see that they are punished for their crimes against the people in Newport, Jay and Burke. and all the other places these people have worked to destroy.