Vermont Ski Resort Faces Fraud Charges and Asset Freeze From SEC

Investing

Published: April 15, 2016 11:40 am

Last Updated: January 13, 2020 10:43 am

The U.S. Securities and Exchange Commission (SEC) recently announced fraud charges and an asset freeze against a Vermont-based ski resort and related businesses for allegedly misusing millions of dollars raised through investments solicited under the EB-5 Immigrant Investor Program.

In the report, the SEC alleged that Ariel Quiros of Miami, William Stenger of Newport, Vt., and their companies made false statements and omitted key information while raising over $350 million from investors to construct ski resort facilities and a biomedical research facility in Vermont.

Investors were told that they were investing in one of several projects connected to Jay Peak, a ski resort operated by Quiros and Stenger, and their money would only be used to finance that specific project. However, in Ponzi-like fashion, money from investors in later projects was misappropriated to fund deficits in earlier projects.

More than $200 million was allegedly used for “other-than-stated” purposes, including $50 million spent on Quiros’s personal expenses and in other ways never disclosed to investors.

According to the SEC’s complaint, Quiros improperly tapped investor funds for such things as the purchase of a luxury condominium, payment of his income taxes and other taxes unrelated to the investments, and acquisition of an unrelated ski resort.

Andrew Ceresney, director of the SEC’s Division of Enforcement, commented:

The alleged fraud ran the gamut from false statements to deceptive financial transactions to outright theft. As alleged in our complaint, the defendants diverted millions of EB-5 investor dollars to their own pockets, leaving little money for construction of the research facility investors were told would be built and thereby putting the investors’ funds and their immigration petitions in jeopardy.

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