Bill Stenger pleads guilty to false document charges in EB-5 case

From Left, William Kelly, Alex Choi, Ike Lee, Jerry Davis, Paul Monette, Ariel Quiros, an unidentified contractor, and, at the podium, Bill Stenger, at the AnC Vermont groundbreaking in May 2015. VBM photo.

Vermont Business Magazine The United States Attorney’s Office announced that today former Jay Peak President William Stenger, 72, of Newport, Vermont, pleaded guilty before Chief Judge Geoffrey W Crawford in United States District Court in Burlington to a felony count of knowingly and willfully submitting false documents to the Vermont Regional Center in connection with his involvement in the Jay Peak Biomedical Research Park EB-5 investment project, also called the AnC Vermont project located in Newport. Stenger faces up to five years in prison.

Stenger pleaded guilty to using false documents in a matter within the jurisdiction of a federal agency, namely United States Citizenship and Immigration Services (USCIS), which oversaw the EB-5 program.

According to court records and proceedings, the AnC Vermont project was designed to raise $110 million from 220 immigrant investors in order to construct and operate a biotechnology facility in Newport, Vermont.

EB-5 immigrant investors could qualify for permanent resident status (commonly known as a green card) by investing $500,000 in a commercial enterprise approved by the VRC, which had the authority to approve and monitor EB-5 projects in Vermont, and by USCIS.

In order to obtain a green card, each investor needed to demonstrate to USCIS that his or her investment had created, or would create within a few years, 10 jobs.

So, for the AnC Vermont project, it was necessary to demonstrate a plan to create at least 2,200 jobs in a short time frame in order to obtain USCIS approval.

As described during today’s hearing, according to materials provided to investors, to the VRC, and to USCIS, the AnC Vermont project would include three lines of business: clean room rentals, sales of stem cell products, and sales of artificial organs.

The financial projections for the project forecasted that the three lines of business would generate over $40 million in revenue within three years, and would generate over $300 million in revenue in six years.

These financial projections impacted both the potential that investors would have their investments repaid, and the predicted number of jobs that the project would create.


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In the end of June 2014, Stenger agreed with the VRC to suspend offering and marketing the AnC Vermont project due to the VRC’s concerns about a number of aspects of the project.

Stenger understood that, in order to be permitted to market the AnC Vermont project again, he needed to provide answers to questions the VRC had asked about the financial projections and about the status of US Food and Drug Administration approvals needed for commercialization of the products.

Stenger made a number of submissions to the VRC in an effort to convince the VRC to allow continued marketing of the AnC Vermont project, including a submission on January 9, 2015.

The January 2015 submission addressed, among other things, the AnC Vermont financial projections and the timeline for commercialization of the products.

As to the financial projections, during the plea hearing Stenger admitted that he engaged a third-party consulting firm in October 2014 and asked the consulting firm to conduct a market demand study to analyze the potential market size of the AnC Vermont products and services, if the products and services were developed and FDA approved.

Throughout the rest of 2014, the consulting firm, which spent many hours working on the market demand analysis and had regular update meetings with Stenger and his team, was never asked to review, analyze, or opine on the project’s financial projections.

Instead, the process of working with the consulting firm made clear to Stenger that the AnC Vermont project had no stem cell products, and that the artificial organs either did not exist yet or required updating.

In the waning days of December 2014 and beginning of January 2015, Stenger asked the consulting firm’s project lead to write a letter stating that the AnC Vermont project’s business projections were reasonable.

Although the consulting firm had not assessed the project’s financial projections, the project lead ultimately signed a letter that falsely asserted that, based upon the consulting firm’s market analysis, the financial projections in the AnC Vermont business plan appeared reasonable.

Stenger knew that the consulting firm had not analyzed the financial projections.

Nonetheless, Stenger provided the letter to the VRC as part of the January 9, 2015 package of materials in support of reopening project fundraising.

As to the product commercialization timeline, during today’s hearing Stenger admitted that he knew that each of the three lines of business—clean room rentals, sales of stem cells, and sales of artificial organs—required approvals from the FDA in order to generate revenue.

Stenger also knew that the FDA approval process was potentially a lengthy one, that obtaining FDA approval would require assistance from someone with regulatory expertise, and that no one associated with the AnC Vermont project had communicated with the FDA about any of the AnC Vermont business line ideas since Stenger exchanged letters with the FDA about one of the artificial organs in 2011.

As part of Stenger’s effort to convince the VRC to allow continued marketing of the AnC Vermont project, Stenger caused to be modified a commercialization timeline that he had previously received from co-defendant Alex Choi.

The timeline listed various steps required in order to commercialize the stem cell therapies and artificial organs referenced in the business plan, along with how long each step was expected to take.

In modifying Choi’s timeline, Stenger had the initial year changed from 2012 to 2015, reflecting the delays in the project’s development. He also had four prominent red boxes, which contained text that read “Need to consult with FDA or experts in FDA’s regulation,” removed from the timeline.

As modified, the timeline downplayed uncertainty and lack of progress on FDA approvals, supporting the narrative that the AnC products would become profitable and create jobs in a short time.

Stenger submitted this modified timeline to VRC as part of the January 9, 2015 set of materials.

In the same submission, Stenger represented to the VRC that he had engaged FDA consultants to assist with the FDA process.

Stenger had the red caveats removed from the timeline without receiving any information from the consultants that might provide further support for the timeline, and without asking the consultants to start any work on the AnC Vermont project.

From 2012 to 2016, approximately 169 investors invested approximately $85 million in the AnC Vermont project, in addition to paying approximately $8 million in “administrative fees.”

Fundraising was never completed, and the AnC Vermont facility was never constructed.

Court records show that over $47 million of AnC Vermont investor funds were paid to Jay Construction Management, a Quiros-controlled company, and almost all of those $47 million were used for purposes unrelated to the AnC Vermont project.

Stenger faces up to five years in prison and three years of supervised release for his knowing and willful submission of false documents to the VRC.

For sentencing, as stated in the plea agreement, the government will offer evidence about Stenger’s broader involvement in the fraud scheme as alleged in other counts of the indictment.

The Court will determine the sentence with reference to the federal sentencing guidelines. The government has agreed that it will not recommend a fine or forfeiture, but instead will focus on seeking a restitution order for victims.

Co-defendant Ariel Quiros pleaded guilty to wire fraud conspiracy, money laundering, and concealment charges in August 2020 and currently awaits sentencing.

Co-defendant William Kelly pleaded guilty to wire fraud conspiracy and concealment charges in July 2021.

Both Quiros and Kelly have agreed to cooperate in the government’s ongoing matters. Co-defendant Choi remains at large.

Jonathan A. Ophardt, Acting United States Attorney, expressed his gratitude for the outstanding investigation assistance by the Federal Bureau of Investigation, the IRS Criminal Investigation, the Food and Drug Administration, and for the assistance of the Justice Department’s Fraud Section and Office of International Affairs.

The prosecutors handling the case are Assistant US Attorneys Nicole Cate and Paul Van de Graaf.

William Stenger is represented by Brooks McArthur, Esq and David Williams, Esq. Ariel Quiros is represented by Neil Taylor, Esq and Robert Katims, Esq. William Kelly is represented by Robert Goldstein, Esq and Mary Kehoe, Esq.