Quiros surprises everyone — including co-defendants — with plan to plead guilty in EB-5 fraud case

  • Written by GCBI Team Posted on July 17, 2020 | Updated on July 17, 2020 | 3 min read

The biggest EB-5 fraudster of all-time, Ariel Quiros, dropped the bombshell that he will plead guilty to charges in the AnC Bio fraud case. The project took in more than $80 million of EB-5 money but nothing was ever built. Quiros apparently misappropriated funds to cover $6 million in IRS payments as well as other personal expenses. His lawyer says Quiros wants to “make amends” and explain “how the wheels came off.”

The man behind the biggest EB-5 fraud ever — misappropriating $200 million of investor funds in the Jay Peak scandal — has shocked everyone with a sudden change of heart. Or should we say strategy. He now says he wants to cooperate with prosecutors and explain “how the wheels came” off with regards to the AnC Bio case (we expect him to be speaking metaphorically here and not about the Jeep Rubicon he bought with investors funds).

Even though this is separate from the infamous Jay Peak scandal, the profile is still very high and the witness list boasts some notable names including Bernie Sanders, Senator Patrick Leahy, Representative Peter Welch, and former Vermont Governors Jim Douglas and Peter Shumlin.

The numbers: 160 EB-5 investors, $80 million in capital, 0 Green Cards

While Quiros has reached settlements with previous fraud charges related to the Jay Peak ski resort in Vermont, the man’s ambitions extended to multiple developments that used EB-5 money, and these charges relate to a biotech facility project that raised more than $80 million from over 160 immigrant investors — but was never built.

U.S attorney, representing the state of Vermont, Christina Nolan says this about Quiros’ intentions with the biotech project: “The AnC Vermont project was not in fact designed to create a number of jobs or the amount of revenue for the Northeast Kingdom that the defendants claimed. Rather, the project was designed to siphon millions of dollars to the control of Quiros and Choi, who were secretly business partners and in charge of the project.” 

The co-defendants

Nolan is referring to a South Korean businessman who was said to be Quiros’ hidden partner — and who still remains at large. Choi faces 10 criminal counts.

A third defendant, Bill Stenger, a former executive with the Jay Peak project, denies 10 criminal counts. His lawyer, Brooks McArthur, said they were unaware of before the proceeding of Quiros’ plan to cooperate with the prosecutors. McArthur doesn’t believe Quiros’ guilty plea will hurt Stenger’s defense. “We’re prepared to either cross-examine him or call him ourselves,” he said. “If he testifies truthfully it will help my client, Bill Stenger.” From the onset of the case, Stenger has maintained his innocence.

The last co-defendant is Quiros’ advisor Bill Kelly. His lawyer declined comment.

Now that Quiros will be playing ball with the prosecutors, his lawyer Neil Taylor, doesn’t expect to be very busy. At last Friday’s hearing he told the judge he expects to be “a passive observer.”

Quiros ready to “do the right thing” — and do prison time

The charges against Quiros could total over 100 years in prison, though the likelihood of him receiving the maximum penalties is slim. Still, his lawyer seems to indicate Quiros will do prison time and he will accept whatever sentence comes his way. “It’s a pretty extensive case, and Mr. Quiros deeply regrets his involvement in it and he’s trying to do the right thing.” 

Cooperation for a more lenient outcome?

The “right thing” can be construed many ways. Legal experts have seen the situation of one defendant, in a multiple-defendant case, where one person becomes the first to cooperate with prosecution in order to receive favorable treatment. A professor at the Vermont Law School, Robert Sand, says this: “It’s not inconceivable that you would get a more blameworthy party reaching an agreement to cooperate, receiving a more lenient outcome, and providing evidence against a less blameworthy party who ultimately ends up with a worse outcome.” 

Is this apparent change of heart by the biggest fraudster in EB-5 sincere? Or is it a change of strategy to get a reduced sentence? 160 EB-5 investors would likely reach the second conclusion.

Read the VTDigger story “Quiros, cooperating with prosecutors, expects to plead guilty in EB-5 fraud case