Ribbon Cutting with Governor Shumlin in September 2016 for the Burke Mountain Hotel and Conference Center. VBM file photo.
by Timothy McQuiston, Vermont Business Magazine Michael I. Goldberg, the court-appointed receiver for the sale of the Burke Mountain Hotel and Conference Center, on Wednesday released a statement on its possible sale, of which he said he is in the final stages of completing. The hotel is part of the $200 million fraud case brought by the federal government and the state of Vermont in April 2016 involving the former Jay Peak Resort owners. It included the several developments at Jay along with the proposed AnC Bio facility in Newport and the Burke Mountain Hotel.
See background and notice to EB-5 immigrant investors below.
Michael I. Goldberg, Receiver: I understand from his numerous statements to the press that Todd Firestone and his proxies want to buy the Burke Mountain Hotel and Conference Center for $10 million. To set the record straight, I directly dealt with the Firestone Group for nine months in 2023-24 and at the last minute they attempted in bad faith to renegotiate a lower price after we had already reached agreement on terms and spent thousands of dollars finalizing a contract.
I am now finalizing a contract with a much more credible and financially capable buyer without any contingencies and at a higher price. In my opinion, this buyer will also be much better for the community as it is committing to invest many millions of dollars into snowmaking and other improvements that will greatly improve the skiing experience at Burke and will directly benefit the homeowners, business owners and others who rely on the success of Burke Mountain.
I have remained mostly silent to date because I don’t want to engage with the Firestone Group in a public war of words. If I am able to consummate a deal with the new buyer I know it will be better for the investors I represent in the form of a higher price and the Burke community as a whole as the new buyer has deep roots in the community and will insure that Burke Mountain will have the stable future it deserves. Please bear with me as I attempt to finalize this matter.
Thank you.
FORT LAUDERDALE, Florida—March 5, 2025—Michael I. Goldberg, Receiver
Burke Mountain Hotel and Conference Center
https://www.jaypeakreceivership.com/
BACKGROUND
Michael Pieciak signed an affidavit (see below) in his former position as deputy commissioner of the Securities Division within the Department of Financial Regulation. Pieciak, in that role, began investigating the Jay Peak, et al, projects funded with EB-5 immigrant investor proceeds. Ultimately the state and the US Securities & Exchange Commission filed criminal fraud charges against the owners.
In the document below, Pieciak explains why the $50 million Burke Mountain Hotel was not included in the April 2016 fraud case. He states that the investment funds for that project, were separate from the Jay Peak projects and that the money raise and expended were within the bounds of the investment agreement (the PPM or private placement memorandum).
Pieciak is now the Vermont State Treasurer.
Vermont Attorney General Charity Clark on May 29, 2024, issued a statement citing Pieciak’s affidavit to assist the EB5 investors encouraging them to use the affidavit in their permanent resident petitions, even if they were previously rejected.
NOTICE TO INVESTORS IN THE QBURKE EB-5 PROJECT
STATE OF VERMONT OFFICE OF THE ATTORNEY GENERAL
109 STATE STREET MONTPELIER, VT 05609-1001
May 29, 2024
Persons seeking permanent resident status in the United States based on their investments in Q-Burke should review the information below.
In the last several months, USCIS has approved the EB-5 petitions of several Q-Burke investors who had filed the project materials made available by the Klasko firm (attorneys for the Receiver) in 2021, including the Affidavit of Michael Pieciak and accompanying exhibits.
If your petition has not been approved, and if the record in your case with USCIS does not already include the Pieciak Affidavit and its exhibits, you may want to supplement your immigration petition by submitting a copy of those documents to USCIS. Depending on your circumstances, you can interfile into a pending petition or file a motion to reopen a denied petition.
The Pieciak Affidavit was prepared by Mr. Pieciak in September 2021, when he was the Commissioner of the Vermont Department of Financial Regulation. The Pieciak Affidavit confirms that EB-5 funds invested in the Q-Burke project were used to construct a hotel and other facilities in the Town of Burke, Vermont. The Pieciak affidavit and accompanying exhibits can be downloaded from this website:
pieciak-affidavit-with-exhibits-092821.pdf
Several investors who supplemented their permanent resident petitions with the Pieciak Affidavit obtained permanent resident status in the United States.
Before taking any action, you should consult with your U.S. immigration attorney.
If you have questions or need more information you may contact: Kelly O’Brien, Vermont Attorney General’s Office Paralegal, at [email protected].
Charity R. Clark
Vermont Attorney General
AFFIDAVIT OF MICHAEL S. PIECIAK
1. My name is Michael S. Pieciak. I am over 21 years of age and have personal
knowledge of the matters set forth herein.
2. I am employed at the Vermont Department of Financial Regulation ("Department
of Financial Regulation" or "Department") as Commissioner of the Department. I have been the
Commissioner of the Department of Financial Regulation since July 2016, having been appointed
to that position by the last two Governors of Vermont.
3. Prior to my appointment as Commissioner, I was employed from February 2014 to
July 2016 as Deputy Commissioner of the Securities Division of the Department of Financial
Regulation.
4. Since December 2014, the Department of Financial Regulation and the Vermont
Agency of Commerce and Community Development together have administered the Vermont EB-
5 Regional Center ("Vermont Regional Center"). Prior to December 2014, the Vermont Agency
of Commerce and Community Development alone administered the Vermont Regional Center.
5. In my capacity as Deputy Commissioner of the Securities Division, I was charged
with overseeing all functions of the Securities Division including securities fraud investigations,
and since December 2014, the Vermont Regional Center securities compliance program.
6. In that capacity, I opened an investigation into the Jay Peak EB-5 projects in early
2015 in which I: (i) analyzed the offering materials and other documents pertaining to the eight
limited partnership offerings (collectively referred to as the "Jay Peak limited partnerships") that
were offered and sold under the auspices of or in connection with Jay Peak, Inc. ("Jay Peak"), a
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Vermont corporation or its officers or owners; (ii) visited the sites for each of the Jay Peak limited
partnership projects; (iii) reviewed bank, brokerage, other primary financial documents pertaining
to the Jay Peak limited partnerships, and account transaction summaries prepared by Department
staff under my direct supervision; (iv) reviewed invoices paid by or on behalf of the Jay Peak
limited partnership projects to contractors; and (v) reviewed other documents provided to the
Vermont Regional Center by Jay Peak or its counsel.
7. As a result of this investigation, and based on my analysis, the Department
identified multiple instances of securities fraud committed by Ariel Quiros ("Quiros") and William
Stenger ("Stenger") and brought a securities enforcement case that was eventually settled.
8. As described in more detail below, I concluded based on this investigation that the
Q Burke Mountain Resort, Hotel and Conference Center LP ("0 Burke B-5 Pro ject LP") investor
funds were not comingled (sic) with investor funds of any other EB-5 project, and were used in a manner
substantially consistent with the representations made in the offering documents. Based on these
conclusions, our Department did not include the Q Burke project as a defendant in our securities
fraud enforcement action against Jay Peak and its principals. Similarly, the U.S. Securities &
Exchange Commission did not include the Q Burke EB-5 Project LP as a defendant in its
enforcement action. 1
0 BURKE MOUNTAIN RESORT
Background: Purchase of the Burke Mountain Resort
9. Our Department's investigation determined the following facts regarding the Burke
Mountain Resort ("Burke Resort") and Q Burke EB-5 Project LP.
1 The SEC included the Q Burke EB-5 Project LP as a "relief defendant" in its action due to the role investor funds
from earlier Jay Peak EB-5 projects played in purchasing the Burke Mountain Resort as described below in
paragraph 12.
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10. Q Burke Mountain Resort, LLC ("O Burke LLC") was organized on May 8, 2012
with the Vermont Secretary of State as a manager-managed limited liability company. Ariel Quiros
was listed as the manager ofQ Burke LLC.
11. On May 12, 2012, Q Burke LLC entered into a Membership Interest Purchase
Agreement to purchase the Burke Resort for $7,260,000 plus the assumption of certain liabilities.
12. The initial deposit of $250,000 had previously been wired on April 20, 2012, from
an Ariel Quiros controlled company to an attorney escrow account. On May 16, 2012, the
remaining purchase price of $7,010,000 was wired from a margin account held at Raymond James
numbered XXXX2589 in the name of Jay Peak, Inc. ("Account 89"). Account 89 was secured by
funds from previous Jay Peak EB-5 projects and ultimately was paid off with funds from previous
Jay Peak EB-5 projects.
Background: The Burke Mountain Resort EB-5 Project
13. Q Burke EB-5 Project LP was organized on May 29, 2013 through a Certificate of
Limited Partnership that appointed Q Burke Mountain Resort GP Services, LLC (' 0 Burke GP ')
as its general partner and initial limited partner. Q Burke GP was organized with the Vermont
Secretary of State on May 17, 2013 and its owners and sole members were Stenger and Quiros.
14. On July 17, 2013, Q Burke EB-5 Project LP, through its general partner, executed
a memorandum of understanding with the Vermont Agency of Commerce and Community
Development whereby it became a designee of the Vermont EB-5 Regional Center.
15. Q Burke EB-5 Project LP offered the sale of 196 limited partnership interests
through a private placement memorandum, initially issued in June 2013, but later supplemented
and revised in July 2015 (the "Q Burke Mountain Resort PPM" or "PPM"; attached hereto as
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Exhibit F). Each Burke investor signed the July 2015 PPM, even if they had earlier signed the
2013 PPM.
16. The Q Burke Mountain Resort PPM required a $500,000 investment along with a
$50,000 administrative fee. The Q Burke Mountain Resort PPM instructs investors to execute a
subscription agreement and send the $500,000 investment to a Q Burke Mountain Resort escrow
account maintained at People's United Bank, N.A.
17. From June 2013 through December 2015, the Q Burke EB-5 Project LP sold 116
limited partner interests totaling $58,000,000 in EB-5 investment.
Background: Q Burke Construction
18. On October 1, 2012, the Q Burke LLC and PeakCM, LLC ("PeakCM") executed a
construction contract for the hotel and conference center, which on April 8, 2014 was
supplemented with a guaranteed maximum price amendment (collectively, the "PeakCM
Contract"). The guaranteed maximum price was $50,980,643.
19. Between December 12, 2012 and December I, 2015 PeakCM issued 36 "preconstruction"
invoices totaling $2,046,261. Further, between September 30, 2013 and December
31, 2015 PeakCM issued 24 "construction" invoices totaling $49,144,649.75.
20. As of January 31, 2016, Q Burke EB-5 Project LP had paid approximately
$47,392,419.06 ofthe $51,190,910.75in pre-construction and construction invoices with Q Burke
EB-5 Project LP investor funds with the remainder still being owed at the time the State's
enforcement action was filed.
21. In February 2016, construction was completed on the hotel and conference center.
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22. The hotel and conference center ultimately opened for business in early September
of 2016. See Doc. 240 at 27, Receiver's Second Interim Status Report, (Nov. 22, 2016), Dkt. #
1:16-cv-21301-DPG S.D. Fla.
Background: Q Burke EB-5 Project LP Financial Detail
23. During the Department's investigation, I determined that the Q Burke EB-5 Project
LP maintained and controlled the following financial accounts in its corporate name:
a. Escrow account number XX-XXX9-97-6 titled "Q Burke Mountain ResortEscrow"
held at People's United Bank, N.A. The account opened in June 2013
and remained open through at least January 31, 2016 ("Escrow Account").
b. Escrow account number XX-XXXS-80-9 titled "Q Burke Mountain ResortAdmin
Fees" held at People's United Bank, N.A. The account opened in June
2013 and remained open through at least January 31, 2016 ("Administrative Fee
Account").
c. Brokerage account number XXXX7674 titled "Q Burke Mtn Res Hotel & Conf
Ctr" held at Raymond James & Associates Inc. The account opened in August
2013 and closed in December 2014 ("Brokerage Accmmt I").
d. Brokerage account number XXXX-X3530 titled "Q. Burke Mountain Resort
Hotel & Conference Center LP" held at Merrill Lynch, Pierce, Fenner & Smith.
The account was opened in January 2015 and remained open through at least
January 31, 2016 ("Brokerage Account II").
e. Checking account number XXXXXX5929 titled "Q Burke Mountain Resort,
Hotel and Conference Center L.P." held at Citibank, N.A. The account was
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opened in March 2015 and remained open through at least January 31, 2016
("Citibank Account").
f. Checking account number XXXXXX6886 titled "Q Burke Mountain Resort Hotel
LP" held at People's United Bank, N.A. The account opened in August 2013
remained open through at least January 31, 2016 ("Checking Account ').
24. The Department issued subpoenas for all banking records associated with the
above referenced accounts and I personally reviewed the responsive documents and traced the
funds transferred into and out of those accounts during the period from account opening through
January 31 , 2016 (the' Reviewed Period').
25. Q Burke LP investor money would generally flow through .these accounts as follows:
a. an investor would deposit their $500,000 investment and $50,000 administrative
fee into the Escrow Account;
b. an investor's $50,000 administrative fee would be transferred to the
Administrative Fee Account;
c. an investor's $500,000 investment would be transferred to Brpkerage Account I
( or, once Brokerage Account I was closed, to Brokerage Account II);
d. an investor's $500,000 investment would be transferred from Brokerage Account
I or II to the Checking Account which acted as principle operating account for Q
Burke LP; and
e. once received into the Checking Account, the funds would generally be spent on
construction invoices, construction supervision fees and other construction-related
expenses.
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26. More specifically, the following is a detailed summary of each of these accounts
and how investor funds flowed from deposit in the escrow account through to payment of Q
Burke project expenses.
Overview of Escrow Account
27. The Escrow Account was the sole entry and exit point for investor funds.2 Every
Q Burke investor deposited their $500,000 investment into this account. Additionally, investors
deposited their administrative fee into this account - the administrative fee was generally
$50,000, but sometimes a lesser amount depending on the circumstances of the individual
investor.
28. In total, the Escrow Account received $84,257,568.83 in deposits during the
reviewed period. Those deposits included:
a. $67,897,738.10 in investor funds, representing their EB-5 investment and
administrative fees;
b. $16,359,218.75 in investor funds previously transferred to Brokerage I that were
transferred back when the Brokerage I account was closed in December 2014;
c. $611.98 in interest income earned from funds on deposit.
29. In total, the Escrow Account transferred out $84,201,079.57 of the amount
received with $56,489.26 remaining on deposit during the reviewed period. The funds
transferred out included:
a. $33,644,218.75 of investor funds to Brokerage Account II;
b. $26,000,000 of investor funds to Brokerage Account I;
c. $16,189,855.31 of investor funds to the Checking Account;
2 With the exception of one investor refund that was made directly from the Checking Account as described in~
42(e).
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d. $5,417,005.51 of administrative fees to Administrative Fee Account; and
e. $2,950,000 of investor refunds.
30. After accounting for the investor refunds, Q Burke LP received investment from
116 EB-5 investors during the reviewed period.
31. The attached Exhibit A is a true and accurate summary of the account statements
for the Escrow Account that I personally prepared supporting the information in paragraphs 27
through 30.
Overview of Brokerage Account I
32. In total, Brokerage Account I received $26,000,000 in investor funds, and earned
$4,369.75 in interest payments, which were used as follows:
a. $16,359,218.75 of the funds (representing the total account balance at the time) were
transferred back to the Escrow Account when Brokerage Account I was closed;
b. $9,144,876 of the funds were transferred to the Checking Account to pay expenses;
c. $500,000 of the funds were transferred back to the Escrow Account to refund an
investor who did not remain in the Q Burke project;
d. $275 of the funds were used to pay bank fees relating to the transfers of funds.
33. The attached Exhibit Bis a true and accurate summary of the account statements
for the Brokerage Account I that I personally prepared supporting the information in paragraph 32.
Overview of Brokerage Account II
34. In total, Brokerage Account II received $33,644,218.75 of investor funds and
earned $721.83 in interest payments. The following is an accounting of how those investor funds
and interest were used:
Page 8 of 14
a. $27,216,990 of the funds were transferred to the Checking Account to pay
expenses;
b. $5,150,000 of the funds were transferred to the Citibank Account;
c. $500,000 of the funds were transferred back to the Escrow Account to refund an
investor who did not remain in the Q Burke project;
d. $500,000 was transferred to PeakCM - the construction manager for the Q Burke
project;
e. $720 of the funds were used to pay bank fees relating to the transfers of funds.
35. In addition, Brokerage Account II maintained a balance of $277,230.58 at the end
of the reviewed period.
36. The attached Exhibit C is a true and accurate summary of the account statements
for the Brokerage Account II that I personally prepared supporting the information in paragraphs
34 and 35.
Overview of Citibank Account
37. In total, the Citibank Account received $5,150,000 of investor funds. The
following is an accounting of how those investor funds were used:
a. $4,910,000 of the funds were transferred to the Checking Account to pay
expenses.
38. In addition, the Citibank Account maintained a balance of $240,000 at the end of
the reviewed period.
39. The attached Exhibit D is a true and accurate summary of the account statements
for the Citibank Account that I personally prepared supporting the information in paragraphs 37
and 38.
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Overview of Checking Account
40. The Checking Account was the primary operating account for the Q Burke project
and almost all investment funds were ultimately transferred to this account.
41. In total, this account received $57,461,721.31 of investor funds. In addition, this
account received $381,599.92 of unrelated EB-5 funds from the entities controlled by the project
developers, and $500,000 from PeakCM to fund the refund described in ,r 42(e).
42. The following is an accounting of how those funds were used:
a. $47,392,419.06 of the funds were used to pay PeakCM - the construction
manager of the Q Burke project3;
b. $5,845,363.20 of the funds were used to pay North East Contract Services - the
third-party construction manager;
c. $2,470,000 of the funds were used to purchase the land for the EB-5 project;
d. $2,020,768.94 of the funds were transferred to entities controlled by the project
developers for reimbursements and construction management fees4;
e. $500,000 of the funds were used to refund an investor who did not remain in the
Q Burke project;
f. $108,240.39 of the funds were used to pay various Q Burke project expenses; and
g. $1,606.23 of the funds were used to pay various banking fees associated with the
Checking Account.
43. In addition, the Citibank Account maintained a balance of $4,923.41 at the end of
the Reviewed Period.
3 The invoiced amount in ,r 19 differs from this amount because some invoices remained unpaid at the end of the
Reviewed Period.
4 The use of this $2,020,768.94 is more fully described in ,r 51(e) below.
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44. The attached Exhibit E is a true and accurate summary of the account statements
for the Checking Account that I personally prepared supporting the information in paragraphs 40
through 43.
45. The accounts just described, although perhaps more numerous than necessary, as
the IPO has noted in several decisions, nonetheless constituted a closed universe: funds
transferred between them were ultimately used for purposes described in the Q Burke Mountain
Resort PPM and not commingled with other investor funds.
Background: Department of Financial Regulation Investigation
46. During our Department's investigation, we closely examined whether any of the
payments described above deviated from the PPM, thus constituting a material misstatement and
a violation of state securities laws.
47. We determined the use of $47,392,419.06 in investor funds to pay PeakCM for
construction of the hotel and conference center was disclosed under the PPM. See Ex.Fat 87-88.
We further determined the total cost of construction for the hotel and conference center was
consistent with the representations made in the PPM.
48. We also determined the use of $5,845,363.20 in investor funds to pay a third-party
construction manager was disclosed under the PPM. Id. Further, both Stenger and North East
Contracting Services represented to the Department that North East Contracting Services was
serving as a third-party construction manager for the Q Burke EB-5 Project and the Department
also reviewed related construction invoices addressed to North East Contract Services for approval
and payment.
49. The PPM disclosed to investors that 15% of construction costs were to be dedicated
as a construction supervision fee and that this supervision responsibility could be delegated to a
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third party. Id. The Department determined this responsibility had been delegated in part to North
East Contract Services and that 15% of the total costs to construct the hotel and conference center
was $7,108,862.85. And because this amount was greater than the $5,845,363.20 paid to North
East Contract Services, that expenditure was consistent with disclosures made in the PPM.
50. The Q Burke Mountain Resort PPM disclosed the $2,470,000 purchase price of the
property where the hotel and conference center were be built, and accordingly, the payment of
$2,470,000 in investor funds to purchase the land were consistent with the PPM. Id. at 53, 77, 176.
51. The Department determined the $2,020,768.94 in funds transferred to entities
controlled by the project developers were broken out as follows:
a. $326,000 to repay three intercompany loans that were used to pay preconstructions
invoices;
b. $209,326 to repay an intercompany loan that was used to pay project permitting
costs; and
c. $185,000 to repay an intercompany loan that was used to pay project permitting
costs.
d. $15,500 to reverse a bank error that deposited this sum into the Checking
Account rather than the account of another Jay Peak EB-5 project.
e. Additionally, the Department identified a $1,213,626 payment to Jay
Construction Services that was ultimately used to pay a construction invoice for
two earlier Jay Peak EB-5 projects. Internal Jay Peak documents identified this
payment as part of the 15% construction supervision fee disclosed in the PPM.
The total of this amount together with the funds paid to North East Contract
Services equaled $7,058,989.20, which was lower than the $7,108,862.85
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maximum possible construction supervision expense under the PPM's rubric of
15% of construction costs.
f. Finally, after netting out the repayment of a $39,999.92 intercompany loan,
there remained an additional $31,317.02 in investor funds that were paid to
entities controlled by the project developers. Again, however, adding this
amount to $7,058,989.20 paid under the 15% construction supervision fee
totaled $7,090,306.22 - still under the allowable total of $7,108,862.85 (15%
of construction costs) disclosed in the PPM.
52. $500,000 of the funds were used to refund an investor who did not remain in the Q
Burke project.
53. We determined that $108,240.39 of the funds were used to pay various Q Burke
project expenses and vendors and that this was consistent with the administrative fee disclosure in
the PPM.
54. We determined the $1,606.23 of funds used to pay various banking fees associated
with the Checking Account was consistent with the administrative fee disclosure in the PPM.
55. During the Department's investigation, we closely analyzed the question of
whether some or parts of the transactions described above in paragraphs 4 7 through 54 were
inconsistent with representations made in the PPM.
CONCLUSIONS
56. I concluded, based on my personal review of the accounts just described, and my
personal review of accounts used by other EB-5 projects, that the Q Burke investor funds were
not comingled (sic) with investor funds of any other EB-5 project. While some of the allowed
construction-supervision funds were ultimately spent on other EB-5 projects, as outlined in ,r 51
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above, the total amount of payments for construction supervision was within the allowable total
of 15% of construction costs as disclosed to investors in the PPM.
57. Further, I concluded that the Q Burke investor funds were used in a manner
substantially consistent with the representations made in the PPM.
58. Based on these conclusions, our Department did not include the Q Burke project
as a defendant in our securities fraud enforcement case against Jay Peak. The Department's
enforcement case included all the other EB-5 projects associated with Jay Peak.
Signed under penalty of perjury this 28th day of September 2021
Michael S. Pieciak
Commissioner of Financial Regulation
Witnessed: .
Elizabeth "Beth" Sides, Notary Public
1/31/2023
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