The man behind the biggest EB-5 fraud of all time, Jay Peak, will finally see the inside of a prison for his role in the AnC Vermont biomedical project scam. The EB-5 project raised about $93 million from 169 EB-5 investors. The judge called the project — which was never built — a “ghost.” Qurios’ associates William Kelly and Bill Stenger both received 18 month sentences for their roles in the fraud.
Quiros lied about spending, job creation, and used capital for personal expenses
Quiros admitted that he and his associates misled EB-5 investors about material facts such as how the capital would be spent and the job creation, and hid the fact that one of the principals in the project Weon (Alex) Choi was being investigated in Korea for financial crimes.
Instead, Qurios used the EB-5 money for personal expenses such as a $6 million payment to the IRS.
“The defendants’ scheme impacted the lives of many hundreds of individuals, including not only investors from all over the world who dreamed of one day becoming United States citizens,” said a U.S. attorney in the case,” but also Vermonters in Northeast Kingdom communities who hoped for the economic development and new jobs that the defendants promised to deliver.”
Qurios never did time for Jay Peak fraud
Quiros, 65, and a now resident of Puerto Rico is most infamously known as the mastermind behind the Jay Peak ski resort fraud. He was the man behind eight EB-5 funded projects in the Northwest Kingdom, seven being ski resorts and the eighth being the phantom bio-medical facility.
In a previous settlement with the Securities and Exchange Commission (SEC), Quiros agreed to disgorge over $81 million in ill-gotten gains and pay a penalty of $1 million. He had to turn over all of the Vermont EB-5 funded properties to a court-appointed receiver who would try to sell them to recoup some investor losses. The developer was barred from ever participating in the EB-5 program again.
But up until now, Quiros managed to evade prison for his EB-5 “ponzi scheme” that will go down as the largest scam in the program’s history.
AnC Vermont fraud will finally put the developer behind bars
But Qurios’ luck in remaining a free man has finally run out. For his role in the AnC Vermont biomedical scam, he is sentenced to 60 months in prison — no easy feat for a man in his mid-60s and used to living the good life. He is also ordered to serve a three-year term of supervised release, and to disgorge $8,338,600.77.
The sentence follows Qurios’ admission of guilt on three felony charges: a long-term wire fraud of investor capital, money laundering, and concealing material facts in a matter involving a federal agency.
2 co-defendants sentenced to 18 months in prison each, one remains at large
While Quiros was the biggest name in this case but perpetrated the multi-year scheme with the assistance of three other associates: William Kelly, Jong Weon (Alex) Choi, and William Stenger.
William Stenger, 73, the former Jay Peak president, was sentenced to 18 months in prison for his role in the AnC Bio fraud. He must also serve a three-year supervised release term and return $250,000.
“Stenger is an excellent salesman,” said an assistant U.S. attorney who also noted Stenger was adept at taking advantage of "the weakness of others."
A seemingly penitent Stenger said in court, “I got lost along the way.” And to the public, the state of Vermont, and EB-5 investors, he acknowledged, "I let you down.”
Adviser and close friend of Qurios, William Kelly, 73, was another co-defendant. Prosecution labeled him the “consummate fixer” who aimed to “outwit” regulators. Kelly was also sentenced to 18 months in prison and three years of supervised release.
Choi has been at large for years now.
Quiros’s sentencing ends the criminal proceedings for the three defendants who have appeared in this matter.
"Ariel Quiros, William Kelly, and William Stenger knowingly took advantage of innocent EB-5 investors," said an FBI special agent. "Their deceptive scheme destroyed their plans and ruined the promise of economic development in the city of Newport and the Northeast Kingdom.”
See the United States Department of Justice release “Ariel Quiros Sentenced to 60 Months in Prison for EB-5 Fraud in Vermont’s Northeast Kingdom”