On May 14, 2015, Jay Peak President Bill Stenger (right) hosted Ariel Quiros (left), dignitaries and the press to the groundbreaking of the proposed AnC Bio facility in Newport. It is the alleged fraud at this facility that has mostly resulted in Quiros being charged and now willing to take a plea deal. He and Stenger were arraigned in federal court almost exactly four years later. VBM photos.
by Mike Donoghue, Correspondent, Vermont Business Magazine A proposed change of plea court hearing for the reported mastermind behind a major federal EB-5 investment fraud in the Northeast Kingdom was delayed on Friday in Burlington for one week.
Ariel Quiros, the former owner of the Jay Peak Ski Resort, has signed a plea agreement that could net him more than an 8-year federal prison term.
But Chief Federal Judge Geoffrey W Crawford said Friday he wanted to ensure the defendant’s lawyer was clear of any conflict of interest or divided loyalty.
Crawford discussed two potential conflicts with Quiros and his defense lawyer Neil Taylor of Florida. Crawford said he was required to confirm that Quiros was fully aware of the issues, had time to seek outside legal counsel to discuss in detail those concerns, and not be rushed into making a final decision.
Taylor told the court Quiros had discussed the conflict issues with Burlington lawyer Robert Katims on Thursday. Taylor told the court Friday that Quiros was prepared to go forward and did not think anything would change by next Friday.
Crawford said he still wanted to wait a week to ensure Quiros had enough time to process all he heard and for a written waiver.
One possible problem centers on Taylor also representing a previous creditor of Quiros years ago.
The other case involved Taylor’s previous relationship with Douglas Hulme, a potential witness in the upcoming Vermont trial.
Prosecutors have said they do not believe Taylor should be disqualified, but also wanted the issue on the record to prevent legal problems down the line.
Quiros 64, of Key Biscayne, Fla. plans to plead guilty to three felonies: conspiracy to commit wire fraud, money laundering and the concealment of material information, according to his signed plea agreement filed in U.S. District Court.
He has pleaded not guilty to 12 felony charges, including 7 counts of wire fraud and 3 counts of false statements.
Under the 9-page signed plea agreement, the maximum sentence the government will seek for Quiros is 97 months in prison, but Judge Crawford is free to impose less based on defense arguments.
Prosecutors have agreed to drop the other nine pending charges at the sentencing. They also will not seek any forfeitures if the court imposes a restitution order, the agreement notes.
Quiros and prosecutors also have decided to recommend to the court that the defendant’s sentencing be postponed until after two co-defendants are sentenced, if convicted.
The defense plans to fight that provision and Crawford postponed consideration.
The government’s case centers on claims that Quiros worked out a scheme to defraud various foreign investors for a biomedical research center in Newport. The proposed AnC Bio facility was expected to bring high paying jobs to an area with high unemployment.
Instead the only lasting gift for Newport is a large construction hole on Main Street after a couple of old buildings were knocked down.
Under the federal EB-5 program foreign investors could obtain Immigration cards to live in the United States in exchange for spending $500,000 in a series of Northeast Kingdom ventures.
The House of Cards eventually collapsed. The government maintains the fraud began in 2008.
During a separate court hearing Friday afternoon in Burlington, Judge Crawford agreed to delay the trial of two co-defendants, William Stenger, 71, of Newport and William Kelly, 71, of Weston, FL.
Stenger is the former president and CEO of Jay Peak, while Kelly was an adviser to Quiros.
They are now set for trial on April 5 in Burlington.
A fourth defendant, Jong Weon Choi, a South Korean businessman, remains at large. The indictments names Choi for 10 criminal counts. The government has said Choi, who operated AnC Bio in Korea, was a “hidden partner.”
Bill Stenger listens as his attorney Brooks McArthur answers questions from the press outside the federal courthouse in Burlington on May 22, 2019.
Quiros, Stenger and Kelly were initially scheduled for trial on Oct. 5, but it was recently delayed until Jan. 21, 2021.
Assistant U.S. Attorney Paul J. Van de Graaf said he believes another delay would make sense in light of the complications the COVID-19 pandemic would cause executing a jury trial.
He said the plan for a January trial appears premature and the defense was willing to change to April 2021.
Crawford agreed, noting that federal court in Vermont is just looking to resume jury trials. He said it made sense to get a few shorter trials completed under COVID conditions before undertaking the Stenger/Kelly case.
Prosecutors had said earlier they expected to need 15 days to present the evidence against the three defendants. The defense has estimated it would need 4 to 6 days. It is unclear if Quiros drops out how much time might be cut from both estimates.
Stenger and Kelly have pleaded not guilty to 10 felony counts following the return of the indictment in May 2019.
Quiros attended both hearings on Friday by video from Florida. Stenger and Kelly waived their appearance.
Crawford reminded Quiros that he was free to attend the court session in person in Vermont, but he declined the invitation.
Crawford made a finding that due to restrictions required by the deadly COVID-19 pandemic the ends of justice were met by proceeding through video-conferencing.
Defense lawyers Brooks McArthur and David J. Williams, who represent Stenger, said they are interested in ensuring that Quiros is available for their trial if he goes forward with the change of plea.
They maintain having Quiros unavailable as a witness would violate Stenger’s constitutional right to call an exculpatory witness on his behalf.
Crawford said he would deal with that question down the road.