Settlement Will Pave Way for Audit by Doug Hoffer
by Timothy McQuiston Vermont Business Magazine Attorney General TJ Donovan gathered at the Newport waterfront with Governor Phil Scott, Auditor Doug Hoffer, Newport Mayor Paul Monette, and others involved in economic development in the Northeast Kingdom to announce a settlement in the State’s EB-5 enforcement action. The State of Vermont today filed a motion with the Washington Superior Court seeking approval of the settlement reached with Ariel Quiros. A separate settlement was reached with William Stenger. The settlements resolve the State’s enforcement actions in connection with EB-5 projects. Funds from the settlements, totaling $2.1 million, will be designated for economic development in the Northeast Kingdom.
CLICK IMAGE TO WATCH PRESS CONFERENCE
In conjunction with the settlements, Attorney General Donovan has asked Auditor Doug Hoffer to perform an audit of the state’s involvement with the EB-5 projects at Jay Peak. Documents pertaining to the EB-5 program will be delivered to Auditor Hoffer upon the Court’s approval of the Quiros settlement.
“These settlements serve the public interest,” Attorney General Donovan said. “They will allow us to address the loss of trust in state government that has resulted from this fraud by performing a complete audit of the State’s role in the EB-5 projects. I want to thank Vermont’s Auditor, Doug Hoffer, for agreeing to do this audit. And thank you to Commissioner Michael Pieciak and Governor Scott for their assistance in resolving this matter.”
Ariel Quiros will pay the State $2 million dollars as part of the settlement, which will be satisfied through his transfer to the state of title to five properties located in the Northeast Kingdom. Stenger will pay $100,000 over the course of four years. If the Court approves, all of the proceeds of the settlements will be used for economic development in the Northeast Kingdom.
“With over $2 million dollars the state will receive in this settlement we will be able to help the Northeast Kingdom and Newport in particular with much needed funding for economic development,” said Governor Scott.
“With $2.1 million payment to the State earmarked for economic development in the Northeast Kingdom, my hope is this money will address some of the harm done to the Kingdom,” said Attorney General Donovan.
“We see this as another step in the healing process for our community,” said Newport Mayor Paul Monette. “Now that some of the uncertainty has been lifted, we want to continue to build on the momentum created by Newport’s recent centennial celebration and work together as a community to move the city forward.”
“Newport has been actively working with our state and regional partners to find a way to cure the vacant lot on Main Street,” said Newport City Manager Laura Dolgin. “We know this will take time and we hope this settlement may bring the City a few steps closer to the economic benefit the original project promised.”
Asked if the state had an appraisal done of the Quiros properties, Donovan said the answer was no; asked what the assessed value was, he did not know; asked if there were any liens on the property, he said that they didn’t know; asked the cost of the litigation, he did not know. The AG's office said that they thought $2 million was what the properties were worth.
The underlying stipulations by Stenger can be found HERE.
With the Newport marina as a backdrop n September 2012, from left, Congressman Peter Welch, Bill Stenger, Senator Patrick Leahy, Senator Bernie Sanders,Governor Peter Shumlin and Ariel Quiros announced the expansion of the NEK EB-5 program. Courtesy photo.
It was also in Newport that the grand NEK EB-5 development projects, once anticipated to total upwards of $600 million, was announced. At that time (September 2012), mostly a different set elected officials was there, including Governor Shumlin, the entire congressional delegation, Stenger and Quiros.
This latest press conference is another step in laying to rest the massive fraud and the significant economic development of about $300 million the EB-5 program brought to the region. Jay Peak resort has been transformed with a water park and ice rink, two hotels and many condos. Burke Mountain resort has finally got the large hotel it needed. Meanwhile, many foreign investors have been left wondering if they will ever get their money back or the promised green card, especially those who invested in the never-built AnC Bio medical technology facility in Newport.
And then there is the matter of the giant hole in the middle of Newport, where the Jay Peak developers demolished several buildings to make way for redevelopment, which has yet to begin and whose future is uncertain.
James Dwinell contributed to this report.
RELATED STORIES
Feds order EB-5 Center terminated, state to appeal
Quiros agrees to pay back $81 million, surrender properties
State files suit alleging investor fraud at Jay Peak, Inc EB-5 Projects
Source: Vermont AG 7.12.2018