Former ski resorts owner faces sentencing in Vermont fraud
The former owner of two Vermont ski resorts is facing sentencing for his role in a failed plan to build a biotechnology plant in Vermont using tens of millions of dollars in foreign investors’ money raised through a special visa program that was part of the largest fraud case in the state’s history
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Your support makes all the difference.The former owner of two Vermont ski resorts faces sentencing Friday in federal court for his role in a failed plan to build a biotechnology plant in Vermont using tens of millions of dollars in foreign investors' money raised through a special visa program that was part of the largest fraud case in the state's history.
The sentencing for Ariel Quiros, a Miami businessman and former owner of Jay Peak and Burke Mountain ski resorts, wraps up the criminal cases for three men involved in the financial scandal that shook the state and its rural, economically depressed region called the Northeast Kingdom. A fourth man, a businessman in South Korea, remains at large.
“The crimes could not have occurred without the toxic mix of these three men’s strong personalities,” assistant U.S. attorneys Paul van de Graaf and Nicole Cate wrote in their sentencing document. “Quiros was, at bottom, a wheeler-dealer who was in it for the money. He came to believe that he was truly rich, rather than simply misusing other people’s money.”
Prosecutors are asking the court to sentence Quiros to less than the eight-year maximum under the plea deal, based on Quiros’ “broad cooperation” with the government and his “acceptance of responsibility.” The defense has asked for 18 months of home confinement because of what Quiros’ lawyer said was his long service in the armed forces, his decision to plead guilty and cooperate with the government, forfeiture of his property and his wife’s severe cardiac issues.
Quiros, former Jay Peak president William Stenger and Quiros' adviser William Kelly were indicted in 2019 over the failed plan to build the AnC Bio plant in Newport, Vermont, using millions raised through the EB-5 visa program that encourages foreigners to invest in U.S. projects that create jobs in exchange for a chance to earn permanent U.S. residency.
Prosecutors said the project was designed to raise $110 million from 220 immigrant investors to build and operate the biotechnology facility, according to court records and proceedings. Approximately 169 investors put in at least $500,000 each for a total of about $85 million between 2012 and 2016, as well as paid a total of about $8 million in administrative fees but the fundraising was never completed and the project was never built, prosecutors said.
Three years before Quiros and Stenger were charged criminally, the federal Securities and Exchange Commission and the state of Vermont alleged in 2016 that they took part in a “massive eight-year fraudulent scheme.” The civil allegations involved misusing more than $200 million of about $400 million raised from foreign investors for various ski area developments through the EB-5 visa program “in Ponzi-like fashion.”
Quiros and Stenger settled civil charges with the SEC, with Quiros surrendering more than $80 million in assets, including the two resorts.
Prosecutors wrote in their sentencing recommendation in the criminal case that Quiros relied on Kelly and Stenger to address the details, with Stenger as fundraiser and acting as the face of the biotechnology plant project, and Kelly to carry out his wishes and fix problems. Quiros surrounded himself with lawyers and accountants and “perceived that these professionals gave him cover,” prosecutors wrote. They also said Quiros believed he was entitled to large profits from the EB-5 profits that he could use when and how he wanted and he didn’t care about “contract” details.
“He wanted the gravy train to keep rolling, if possible,” and didn’t care what his two co-defendants said to investors, the Securities and Exchange Commission or the Vermont Regional Center, prosecutors wrote.
They called the misuse of funds more like a lapping scheme: “using other people's money to pay debt that could not legitimately be covered.”
Quiros lawyer wrote that Quiros has overwhelmingly displayed his contrition and desire to make amends, has taken full responsibility for his conduct and “demonstrated remorse substantially.”
Quiros decided he wanted to resolve the criminal case and insisted counsel offer the government his cooperation, which was accepted, wrote his attorney Neil Taylor in his sentencing memo. Quiros pleaded guilty in August 2020 to charges of conspiracy to commit wire fraud, money laundering and the concealment of material information related to the AnC project, which the judge has said was fiction from the start. Nine other charges were dropped.
“To that end, it would be no exaggeration to say that Mr. Quiros decision to cooperate brought the house down,” Taylor wrote. Stenger, of Newport, and Kelly, of Fort Lauderdale, Florida, later reached plea deals and were each sentenced earlier this month to 18 months in prison, with Stenger ordered to pay $250,000 and Kelly to pay $8.3 million in restitution.
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Associated Press writer Wilson Ring contributed to this report.